When Do Higher Tax Rates Lead To Lower Tax Collections?

The Laffer curve peak at which higher tax rates lead to lower tax revenues is quantified for 27 OECD countries here. It ranges from top marginal rates of 60% to 76% by country, with the U.S. at the highest end of that range, and Luxembourg at the low end. Top rates exceed the Laffer curve peak as estimated by this study in Austria, Belgium, Denmark, Finland and Sweden. Sweden is the furthest beyond this peak.

Czechia (46%), Mexico (33%), New Zealand (44%) and Poland (47%) are the only countries with a lower top marginal rate than the U.S. (48%) by this methodology. The top rate in the U.S. is lower relative to its Laffer curve peak than every other OECD country except Slovakia which ties it at 30% and Mexico which is at 28%.

The notion that the U.S. has uncompetitively high tax rates relative to its economic peers is simply not born out by the evidence.