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January 15, 2013 1:50 PM U.S. Tax Rates Are Really Low

By Daniel Luzer

Derek Thompson over at The Atlantic has reproduced several interesting measures of taxes in the United States, relative to other countries. Despite conservative politicians’ insistence that the country’s budget problems stem from high spending, not low revenue, that’s just straight-up not true.

Our tax rates are pretty damn low, compared to other countries.

personalcompared

It’s worth going directly to the image above to enlarge, so one can see which countries we’re talking about. Higher tax countries include Germany, Denmark, France, the United Kingdom, Japan. Lower tax countries include economic and cultural powerhouses like Estonia, Slovakia, Botswana, and Angola.

Back in July South Carolina Senator Lindsey Graham warned that “what is calamitous is the path we’re on as a nation. We’re becoming Greece.”

Well no. Greece has an effective tax rate of almost 50 percent on $100,000 worth of income, and that’s not enough to support its level of government spending. Ours is at 30.5 percent. Yes, reduced spending is an option for us, but it’s probably not the option that makes the most sense. Greece arguably has a real spending problem; we have fake one.

As Thompson points out, however, the above graph likely understates how low our taxes are. The U.S., unlike other economically advanced nations, has no national sales tax, so the country relies very heavily on these personal taxes, which are very low. Our local and state sales taxes “accounted for about a fifth of total U.S. revenue in 2008,” Thompson writes, “compared to an OECD average of 32 percent.”

For total taxes as a share of the economy, it’s worth taking a look at this comparison:

TotalCompared

Wow. [First image via. Second image via.]

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • oxmania on January 16, 2013 7:13 AM:

    This is a really fascinating chart. Thanks so much for posting it!