Tuesday, March 23, 2010
Are Federal Taxes Too High?
Complaints about taxes are everywhere. But are Federal taxes too high? According to the Tax Policy Center only 4 countries had taxes lower than the USA in 2006: Japan, Korea, Turkey and Mexico. All taxes, collected in the USA, accounted for about 28% of GDP compared with 36% of OECD countries. Many countries in Europe exceed 40% of GDP in taxes. Those are the countries that provide lot's of services to their citizens. The difference seems to be in how taxes are levied. Personal income taxes comprise 36% of US tax revenues. Most other countries use a "consumption tax" as a source of federal revenue. Surprisingly, corporate taxes in the USA account for only 12% of tax revenue in the US, only 1% more than most members of the OECD.