US Taxes on a Global Perspective Since WWII


Wave your American flag proudly because despite what you think, you’re paying fewer taxes than most others in developed countries worldwide. Studies show that the U.S. is a low-tax country and is at its lowest point since WWII. This is true for both individual and corporate tax entities.  

Tax">">Tax revenue is at its lowest in over 60 years. In fact, total revenue as a share of gross domestic product (GDP) has now been under 15% for three straight years—the first time that has happened since prior to the start of WWII. And in respect to the amount generated from corporate income tax filings, the U.S. falls about 25% below the OECD average.  

While we’re on the subject of corporations, we’d like to compare some numbers with our foreign counterparts. Income tax preparation for U.S. businesses, on average, will result in shelling out fewer taxes than competitors in both the UK and Australia. On a whole, American corporations pay a smaller share of their profits than corporations in other OECD">,3746,en_21571361_44315115_46737201_1_1_1_1,00.html">OECD countries. As studies show, the effective corporate tax rate - what corporations pay on their profit after taking deductions, deferrals, and credits - in those nations run around 30%. The rate hovers around 13% here in the U.S.  

Income tax burden includes individual and corporate income taxes, payroll taxes, and excise taxes. Known to be the happiest country in the world, Denmark has the highest tax burden, closely followed by Sweden. The Danish tax burden was 48.2% in 2009; Sweden was 46.4%. Other European countries, like Austria, Belgium, Finland, France, Italy and Norway, also have tax burdens over 40%. Mexico, our neighbors south of the border, have a 17.5% tax to GDP ratio. And coming in as the third lowest county, with Chile weighing in at a close second, U.S. taxpayers carry a burden of 24%.  

From whatever angle we look at it, our nation is indeed a low-tax country. No doubt many taxpayers hope to see the U.S. hold true to this title for years to come.