U.S. tax burden

How high taxes ought to be is a matter of opinion, but how high taxes are is a matter of fact.

Here in the U.S., many people think we’re taxed too highly, so it’s interesting to take a look at how our taxes compare with those of other industrialized nations. This isn’t as straightforward as it might seem, since countries have different governmental structures and tax systems, and obviously they also vary in terms of population and national income, The simplest comparison is probably to look at total taxes collected in all forms by all levels of government as a percentage of a country’s gross domestic product (GDP).

The organization Citizens for Tax Justice (to which, for the record, I’ve contributed a modest amount of money) recently published a report (PDF) comparing the tax percentage in the U.S. against that in 27 other countries, based on data from the Organization for Economic Cooperation and Development. (The numbers come from calendar year 2009, the most recent for which they were available.) A few interesting observations:

  • Total U.S. taxes come to 22.6 percent of GDP, lower than all but two countries on the list, Chile (18.2%) and Mexico (17.5).
  • The highest-taxed country on the list is Denmark, which pays a bit over 48% of GDP in taxes.
  • Of close U.S. allies, the United Kingdom pays about 34% and Canada about 31%.
  • As a percentage of GDP, U.S. corporations pay the second-lowest taxes on the list. Only in Iceland do corporations pay less.

(Edited slightly for clarity since the original post.)
(Also finally updated to include link to CTJ report.)



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