Global Taxes as a Percentage of GDP
Interesting graphic article today discussing tax rates in many developed countries, from the Organization for Economic Cooperation and Development.
The general takeaway of the report is that taxes have increased globally -- they now amount to 36% of Gross Domestic Product of the world's developed nations.
While we hear lots of noise as to the tax burdens in the U.S., let's see how we compare to the rest of the world:
Look at how over-taxed we are in the United States:
So either the entire planet is vastly over taxed -- or we here in USA, speaking relatively, aren't shouldering such a bad tax burden after all . . .
>
Source:
OECD countries’ tax burdens back up to 2000 historic highs
17/10/2007
http://www.oecd.org/document/16/0,3343,en_2649_201185_39495248_1_1_1_1,00.html
Table A. Total tax revenue as percentage of GDP
http://www.oecd.org/dataoecd/44/41/39494985.pdf
Table B. Taxes on General Consumption as percentage of GDP http://www.oecd.org/dataoecd/44/43/39495009.pdf
Table C. Tax structures in the OECD-area
http://www.oecd.org/dataoecd/44/20/39495035.pdf
Taxes in Developed Nations Reach 36% of Gross Domestic Product
DAVID CAY JOHNSTON
NYT, October 18, 2007
http://www.nytimes.com/2007/10/18/business/worldbusiness/18tax.html
Thursday, October 18, 2007 | 02:30 PM | Permalink
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According to the Organization for Economic Cooperation and Development, in the United States the tax burden is 25.6% of G.D.P. This ranks 17th among developed countries. The global average for the group is 36%. Competing outlooks on the price... [Read More]
Tracked on Oct 19, 2007 2:07:03 PM
Comments
I don't give a rip about tax rates as a percentage of GDP...
What I care about is effective tax rates by income level.
Let's see that chart.
Posted by: Pool Shark | Oct 18, 2007 2:37:58 PM
good table
I thought we'd be in it too
rgds pcm
Posted by: peter from oz | Oct 18, 2007 2:42:08 PM
Does this number include Social Security tax revenues? What about state and property and every other G.D. little fee/tax we're hit with. When you add all that up, it's easily >50% of income.
Posted by: skateman | Oct 18, 2007 2:49:44 PM
And remember, a huge % of our budget goes for the war machine, blackwater, etc. real expenditures on our people, not much.
Posted by: mbartv | Oct 18, 2007 2:50:10 PM
interesting that all those countries above us with higher tax burdens also have the highest standards of living in the world and are places American tourists who value quality of life want to visit or even relocate to
Posted by: scorpio | Oct 18, 2007 2:51:25 PM
or we here in USA, speaking relatively, aren't shouldering such a bad tax burden after all . . .
Ehhm, no.
Our tax burden is primarily in inflation, I suppose you might say a "hidden tax". Those other countries, as far as I know, haven't debased their currency nearly as badly as we have. And so every person in the US, legal or illegal, rich or poor, is paying for our government's overspending and bad fiscal policies. We just don't have to file a 1040 is all.
Posted by: Mr. Flibble | Oct 18, 2007 3:07:48 PM
I'd like to see a chart that had "economic freedom" on one axis plotted against tax rates on the other. I don't want the social welfare structure that exists in many of the higher tax countries. Isn't that what keeps us competitive?
Posted by: knorth | Oct 18, 2007 3:08:38 PM
I'd like to see a chart that had "economic freedom" on one axis plotted against tax rates on the other. I don't want the social welfare structure that exists in many of the higher tax countries. Isn't that what keeps us competitive?
Posted by: knorth | Oct 18, 2007 3:09:03 PM
Interesting. But I'd like to see what those taxes go to - I'd bet that the American public gets less $$ back in services than, say, Canadians do, since such a large proportion goes to debt and funding the military.
Posted by: Anitra | Oct 18, 2007 3:14:25 PM
What incite from knorth! Those top 8 tax countries are horrible wastelands of non-competitiveness and most of their populations live in squalor and poverty too.
Tax = suckiness. Political economy made easy.
Posted by: foo | Oct 18, 2007 3:17:15 PM
What about inflation, the cruelest tax? Looks like DXY is down 7% YTD. Gotta add that in.
Posted by: vega | Oct 18, 2007 3:28:52 PM
...Sorry, I'm a little jaded: I live in NYC and pay out close to 50% in taxes. But it's the choice I've made...
Posted by: vega | Oct 18, 2007 3:32:40 PM
Very misleading. Tax revenue is different than government expenditures. Debt growth is not included.
Posted by: Mike M | Oct 18, 2007 3:37:52 PM
Yeah, this probably only shows federal level taxes. Factor in state and city and god knows how many other taxes, and I'm sure we're much closer to the rest.
Additionally, the new way to tax the populace without their consent is now via toll-roads. In Miami, they place a toll on an existing road and everybody's 'taxes' (those who use it for work every day) just went up by $400/year. If they called it a tax, there would be a riot. But since it's 'only' a toll, nobody cares.
Posted by: Eddie | Oct 18, 2007 3:40:50 PM
Interesting chart. A question: what would happen if you added each country's annual deficit to its tax burden (including user fees, local taxes, etc.)?
Posted by: realty-based lawyer | Oct 18, 2007 3:41:00 PM
The biggest difference in the US and Europe is treatment of healthcare. In Europe close to 100% of healthcare is paid through taxes while in the US it is about half.
Posted by: spencer | Oct 18, 2007 3:47:01 PM
the fact that health care is tied to employment is holding us back, knorth, not making us more competitive. How much more productive could workers be if they weren't scared of trying a new line of work because of health care.
And we already have universal health care in the US: The emergency room. And it's the most expensive place to pay for it.
But the greedy folks the Republicans get there power from would rather just point fingers and make folks feel like its all these "poor people" that are holding 'em back.
Posted by: echo boom | Oct 18, 2007 3:47:40 PM
«effective tax rates by income level. Let's see that chart.» Pointless, because it is usually around 30% (currently more like 28%) irrespective of income level, except that people on rather low and rather high incomes pay be less than the average, and those in the middle a bit more. That 30% includes all federal, state and local taxes. The top 20% of households (taxable income above $60-65,000) get around 54% of total income and pay about 25% of their income in federal taxes and 5% in state taxes, and the bottom 80% have about 46% of total income and pay about 14% of their income in federal taxes and 16% in state taxes. State taxes are almost only sales taxes, and federal taxes are mostly but not just income taxes. All these numbers fluctuate by 1-2% depending on tax policy and the economic climate. Note also that reported income of high earners is much more likely to be lower than their true income than that of low earners, as high earners can afford much better tax avoidance (this is the reason why ''no documentation'' mortgages used to exist well before they were sold to impecunious people).
Posted by: Blissex | Oct 18, 2007 3:48:18 PM
"What incite from knorth! Those top 8 tax countries are horrible wastelands of non-competitiveness and most of their populations live in squalor and poverty too."
This could not be more wrong. Scandinavians generally enjoy the highest standards of living, and, more importantly, the longest life expactancies. In fact, we lag pathetically behind many of those nations. It would be interesting to study the correlation between taxes (or Gini coefficient) and life expectancy.
Posted by: Adam | Oct 18, 2007 3:52:08 PM
«those top 8 tax countries are horrible wastelands of non-competitiveness and most of their populations live in squalor and poverty too.» Sweden, Denmark, France, Norway, Finland, Italy, Austria and the Netherlands? Have you ever visited Europe? Crazy... «if you added each country's annual deficit to its tax burden» That's difficult to do because there the "deficit" is not defined quite the same everywhere -- off-budget items can be pretty big. «Yeah, this probably only shows federal level taxes.» It is taxes at all levels. Most USA residents pay an almost flat 30% of income in taxes at all level.
Posted by: Blissex | Oct 18, 2007 4:00:43 PM
Ha! Google only beat by a dime...40x earnings, it beats by a dime.
Posted by: Global Savings Mutt | Oct 18, 2007 4:06:12 PM
Barry,
Great post. But I'd like to expand on some previous posts. Does this include sales taxes, social security taxes, property taxes, etc, or just income tax? I can tell you Sweden just got rid of their property tax and their wealth tax. Though they do have a very high tax on consumption including, gas, alcohol, and VAT. I think it would be more meaningul to add the all up and compare. I believe the economists posted something on the subject within the last year.
Posted by: drbrightside | Oct 18, 2007 4:06:47 PM
Holy Cow I can't believe the borderline socialists (if not true socialists) that inhabit these comments sections. Don't you all know this blog would not be here was it not for free-market capitalism (go ahead, BR, insert your jibe about it not being a free market in reality).
Anyway, how many of you have actually spoken to anyone in the supposed great countries about what it is like to have the gov't in control of your healthcare?
Posted by: Woodshedder | Oct 18, 2007 4:09:45 PM
Nov 15th D-day
http://www.cfo.com/article.cfm/9985407/c_9975786?f=home_todayinfinance&x=1
Posted by: Stuart | Oct 18, 2007 4:11:34 PM
Barry - The entire world is overtaxed.
Posted by: Robert | Oct 18, 2007 4:18:42 PM
