I discussed where the US stands with respect to public debt in an article published last December.
Let's take a look at where the country actually stands with its taxation. All data referenced in this discussion are compiled from the Organisation for Economic Co-operation and Development.
I. Taxes as a Percentage of GDP
Taxes in the US, as measured as a percentage of Gross Domestic Product, were 25th lowest out of the 30 participating countries. As of 2006, the latest year for which complete data are available, Denmark paid the highest at 49.1% of its GDP, the US paid 28%, and the lowest taxes were paid by Mexico, at 20.6% of GDP.
II. Top Marginal Taxes
As you know, the US has a "progressive tax." In this method of taxation, lower levels of income are taxed at lower levels, and higher levels of income are taxed at a progressively higher rate. Most people pay Federal income tax as follows
- 10% on income up to $8,350
- 15% on income from $8,350 to $33,950
- 25% on income from $33,950 to $82,250
- 28% on income from $82,250 to $171,550
- 33% on income from $171,550 to $372,950
- 35% on income over $372,950
The USA ranks right in the middle (15th of 30 countries) for top marginal tax rates for employees, with Denmark again at the top (59.7%) and the Czech Republic with the lowest rate (15%).
III. Corporate Tax Rates
As of 2009, the average corporate tax rate for the thirty countries in the OECD is 26.3%. Two countries, Ireland and Iceland, have rates significantly lower than the average, 12.5% and 15%, respectively. The remainder are between the Slovak Republic and Poland at 19% and Japan at 39.54%. The US is second highest at 39.10%.
We rank 20th as a debtor nation. We rank 25th in total taxes as a percentage of GDP. We rank 15th in personal income taxes. It is only in corporate taxes that the US ranks very high: We are second in the world, after Japan.
It is a laudable goal to decrease deficit spending and lower the National Debt. It is, however, important that we put the issue into perspective, and not overstate our current circumstances.