Paul L. Caron

Tuesday, April 9, 2013

U.S. Is Third Least-Taxed OECD Country

CTJCitizens for Tax Justice, The U.S. Continues to Be One of the Least Taxed of the Developed Countries:

The U.S. was the third least taxed country in the Organization for Economic Cooperation and Development (OECD) in 2010, the most recent year for which OECD has complete data.

Of all the OECD countries, which are essentially the countries the U.S. trades with and competes with, only Chile and Mexico collect less taxes as a percentage of their overall economy (as a percentage of gross domestic product, or GDP).

This sharply contradicts the widely held view among many members of Congress that taxes are already high enough in the U.S. and that any efforts to reduce the federal deficit should therefore take the form of cuts in government spending.

As the graph to the right illustrates, in 2010, the total (federal, state and local) tax revenue collected in the U.S. was equal to 24.8 percent of the U.S.’s GDP.

The total taxes collected by other OECD countries that year was equal to 33.4 percent of combined GDP of those countries....

In 1979, the U.S. had the 16th highest taxes as a percentage of GDP, out of 24 countries at that time.

In 2010, the U.S. had the 32nd highest taxes as a percentage of GDP, out of 34 OECD countries.

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Interesting comment on the underground (black or grey market) economy.

Does this include all taxes including state & local taxes? Some of these countries have more centralized governments with fewer taxes at the local level.

Posted by: HTA | Apr 10, 2013 2:37:04 PM

I doubt this includes the underground economy (or shadow economy) that persists in many countries at levels greater than the US. By ignoring the underground economy, it overstates EU effective tax and understates the costs of higher marginal rates.

Posted by: NL7 | Apr 10, 2013 7:38:26 AM