Wednesday, November 25, 2009

Tax Burdens Around the World


“Think you pay a lot of taxes in the United States? Try moving to Denmark.”

The Organization for Economic Cooperation and Development today released new data on tax burdens in its 30 member countries. Across the organization, over all tax revenue totaled an estimated 35.2 percent of gross domestic product in 2008, down half a percentage point from 2007. The organization expects that tax burdens will fall further in 2009.

Denmark had the highest total tax revenue as a percentage of G.D.P., at 48.3 percent, followed by Sweden at 47.1 percent. Turkey and Mexico had the smallest tax burdens, at 23.5 percent and 21.1 percent.

In the United States, tax revenues represented 26.9 percent of total output last year.


thinking said...

As an aside, the OECD has also recently published a study on the happiest countries, where people feel the most contented with their lives.

Ironically, Denmark ranked number 1 on that survey as well.

Denmark, Finland and the Netherlands rated at the top of the list, ranking first, second and third, respectively. Outside Europe, New Zealand and Canada landed at Nos. 8 and 6, respectively. The U.S. did not crack the top 10. Switzerland placed seventh and Belgium placed tenth.

Denmark is not only a wealthy country, it's also highly productive, with a 2009 GDP per capita of $68,000, according to the International Monetary Fund. The United States' GDP per capita, by contrast, is $47,335.

This is not to say that higher taxes make for happier people, but it does shatter the myth propagated by some conservatives that higher taxes automatically mean a lesser society. As we see with Denmark, higher taxes coupled with a better social safety net allows for happier people along with great wealth and productivity.

So tax cuts are not the solution for everything, and some government social programs are not the ruination of a country.

jeremy h. said...

The GDP figure you list for Denmark is not in PPP terms. Since things are more expensive in Denmark, such an adjustment is necessary. Doing so the IMF figure falls to $37,304, almost in half! And $10,000 below the US.

Here's another theory: maybe it is easier to tax happy people. They are more naive, etc. This sounds no crazier to me than the theory that people are happier with bigger governments. Be careful about correlations.