Hand it Over: Tax Burdens Around The World
THE ECONOMIST--Paying taxes is, for most people, both unavoidable and irksome. But how much hard-earned pay is taken by governments varies considerably across the world. Among the rich countries of the OECD, Germans shell out the most, with a worker earning an average income giving 43% of their gross pay to the state, with nearly half of that going towards social security. Workers in Poland hand over nearly 25% of their wages to social security; whereas Australians pay nothing at all directly. Mexicans and South Koreans enjoy the lightest taxation by some way (see chart above).
6 Comments:
Can anyone explain to me why Mexico's Economy is not growing faster than the US or Canada since it's taxation is so low? Is is because corruption is an additional tax but it is not just recorded? Therefore their real tax rate is much higher. Just asking.
In Germany, Belgium and Denmark the average citizen pays considerably more than US citizens who are in the highest tax bracket.
And the Dem's want us to be more like them? Yikes! And Lou Dobbs thinks middle class Americans have it tough now....
It appears the chart does not include payroll tax (FISA), the most insidious. Am I wrong? And then there's medicare. Just wondering how inclusive that chart data was.
Excellent blog by the way... read it daily!
Happy,
Does Lou Dobbs actually believe what he spews? Is he just trying to sell books, or did he really do a 180 from his past views? Surely, he knows better. I struggle with this.
anon @ 2:24,
FICA is 7.65% for most wage earners (6.2% for SS, 1.45% for Medicare). I think both of these are accounted for under the dark blue bar. It is labeled as SS but appears to be ~7.65. This should be alarming as this is low relative to many countries on this chart; however, these entitlements are expected to balloon in the US, which means higher overall taxes or less discretionary spending unless these are addressed.
A more realistic comparison is offered by tax free day since it includes for all forms of taxation. Canada's tax free day is June 20 as calculated by the Fraser Institute. I believe that this day falls in May in the U.S.
Many forms of taxes are not included on this chart.
Europe, for example, collects substantial tax revenue through collection of the VAT which is much higher that North American sales taxes.
One needs to look at all taxation as well as different types of taxes. A long term study by the Congressional Budget Office last year also revealed that some tax cuts notably corporate tax and capital gains taxes have a beneficial effect on GDP growth while other tax cuts may achieve the goal of equity but do not produce growth. Both goals are, of course, important in designing a tax structure which is fair, equitable and economically sustainable.
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