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The Numbers: How do U.S. taxes compare internationally?

U.S. taxes are low relative to those in other developed countries. In 2004 U.S. taxes at all levels of government claimed nearly 26 percent of GDP, compared with an average of 36 percent of GDP for 30 member countries of the Organization for Economic Co-operation and Development (OECD).

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  • Among OECD countries only Mexico and Korea had lower taxes than the United States as a percentage of GDP. In many European countries taxes exceeded 40 percent of GDP, but those countries generally provide much more extensive government services to their citizens than the United States does.
  • The United States relies less on consumption taxes-18 percent of total 2004 tax receipts-than any other OECD country. Revenue from such taxes averaged 31 percent of total taxes among the 30 OECD countries. Mexico, in contrast, collected 56 percent of its 2004 tax revenue from consumption taxes.
  • Personal income taxes made up 35 percent of U.S. tax revenue in 2004, more than in most other OECD countries, where such taxes averaged 25 percent of the total. However, individual taxpayers paid a larger share of tax revenue in Denmark (51 percent), New Zealand (41 percent), Australia (40 percent), and Iceland (37 percent).
  • Corporate income taxes accounted for a slightly larger share of U.S. tax revenue, 9 percent in 2004, than the OECD average of 8 percent.
  • U.S. employees, on average, contributed more in taxes for retirement and disability insurance-12 percent of total tax receipts-than most of their OECD counterparts, where such taxes accounted for 9 percent of total receipts on average. U.S. employers, however, contributed less: 13 percent of the total compared with OECD employers’ average of 17 percent.