A lot of Americans complain about the amount of income tax they pay. However, compared to income taxes around the world, Americans don’t pay that much.
Perhaps some cheese with that whine
Next year, there will be a presidential election, and like any election cycle, candidates are yammering about how high taxes are in America. They would certainly be high if the benchmark is 0, but it begs the question of what income taxes are like everywhere else.
It turns out, according to MSNBC, that Americans pay pretty low taxes. The Organization for Economic Co-operation and Development releases an annual survey of tax information from member countries, including an assessment of tax revenue as percentage of Gross Domestic Product. In other words, how much of the total economic output of a country is taken by the central government as taxes.
In 2009, the latest year for which data was available, only 24.1 percent of GDP in the U.S. was tax revenue. The only OECD countries that had a lower percentage of tax revenue were Mexico and Chile.
Europeans make Americans look Spoiled
European countries in the OECD survey had far more of their GDP collected as taxes. The closest any European country came to America’s sparse collection was Turkey, with 24.6 percent of GDP being tax revenue in 2009. Citizens of the United Kingdom sent 34.3 percent of revenues to Her Majesty’s Government in 2009. Germans paid 37.3 percent of GDP in taxes, and the French paid 42.4 percent.
The highest percentage of tax revenues in any countries’ GDP was in Denmark, as 48.1 percent of Danish GDP went to tax revenue. The Danish have been getting a break though; it was 50 percent in 2005. Sweden was in second place, with 46.7 percent of GDP going to tax revenue.
Business owners can complain
Based on OECD tax data, American business owners might have a case for raising a stink about taxes. According to the Guardian, the corporate tax rate on American businesses, 39.2 percent, is the second-highest among OECD countries, exceeded only by Japan.
Denmark charges its businesses only 25 percent. Business owners in Great Britain get charged 28 percent, Germany exacts a 30 percent charge, and shops on the Left Bank in Paris can expect to pay 34.4 percent to the French government. Some European countries are much more hospitable, as a pub landlord in Dublin can expect a tax bill of 12.5 percent.
However, there is a corollary, according to PolitiFact. The 39.2 percent corporate tax rate is the top tax rate or the federal corporate tax plus state taxes, which is different from the effective tax rate, what businesses actually pay after loopholes and credits. The effective rate varies for each company, but it can be as low as 0 percent.