Greg Mankiw raises a good point:
Some pundits ... claim that Americans are vastly undertaxed compared with other major nations. ... The most common metric for answering this question is taxes as a percentage of GDP. However, high tax rates tend to depress GDP. Looking at taxes as a percentage of GDP may mislead us into thinking we can increase tax revenue more than we actually can. For some purposes, a better statistic may be taxes per person.... Here are the results for some of the largest developed nations:
France .461 x 33,744 = 15,556 Germany .406 x 34,219 = 13,893 UK .390 x 35,165 = 13,714 US .282 x 46,443 = 13,097 Canada .334 x 38,290 = 12,789 Italy .426 x 29,290 = 12,478 Spain .373 x 29,527 = 11,014 Japan .274 x 32,817 = 8,992 The bottom line: The United States is indeed a low-tax country as judged by taxes as a percentage of GDP, but as judged by taxes per person, the United States is in the middle of the pack.
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