[F]ederal revenues as a share of the gross domestic product will be lower this year than any year since 1950. According to the Congressional Budget Office, the federal government will take only 15.5% of GDP in taxes this year, compared to 17.7% last year, 18.8% in 2007 and 20.9% in 2000.
The truth is that the U.S. is a relatively low-tax country no matter how you slice the data. . . . total taxation (federal, state and local) amounted to 28% of the GDP in the U.S. in 2006. Only four of the 30 OECD countries had a lower tax ratio. Taxes averaged 35.9% for the OECD as a whole and 38% in Europe. Citizens of Denmark and Sweden paid very close to 50% of their total income in taxes.
Paying fewer total taxes relative to GDP among OECD countries are: Japan 27.9%; South Korea 26.8%; Turkey 24.5%; Mexico 20.6%.
The big difference is the scope of the government welfare state. Higher tax OECD countries use their higher taxes to fund universal health care, larger retirement pensions than those in the U.S., more higher education support, more early childhood and maternity support and more generous unemployment assistance. They pay more in exchange for more government assistance.
Americans, in contrast, divert their business revenues and paycheck deductions to expensive private health insurance, retirement savings plans, college savings plans, and high college tuitions. And, Americans suffer more in bad economic times.
Japan and South Korea have only slightly less tax revenue than the U.S., and achieve this, in part, by having extended family, businesses, and neighbors shoulder more responsibility for others than they would in the United States.
Turkey and Mexico have low GDP economies relative to most of the others in which government services are inferior and poverty is more accepted politically.