I recently attended a lecture given by Arnold Kling, who is a former Federal Reserve economist on the Board of Governors staff, former senior economist at Freddie Mac, and all-around financial and monetary expert. The...
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- Tax Revenues Fall Across the OECD
Tax Revenues Fall Across the OECD
A recently released report on the tax revenue collections of major industrialized nations by the Organization for Economic Cooperation and Development (OECD) shows that the U.S. is among the majority of nations to see tax revenues decline because of the recession and tax cuts aimed at bolstering the economy.
Indeed, the most recent complete data for 2008 shows that of the 33 nations surveyed, revenues declined in cash terms for 21 nations compared to 2007 levels. In the U.S., overall tax revenue collections (state, local, and federal) declined by 1.8 percent of GDP, the fifth-largest drop among OECD nations. Spain suffered the biggest decline at 4 percent of GDP, followed by Iceland (-3.9 percent) and Australia (-2.5 percent).
Ten nations actually saw tax revenues increase in 2008. Mexico had the largest increase at 3.1 percent of GDP, followed by Germany at 1 percent of GDP.
Even after the downturn in tax revenues, Denmark has the highest tax burden among OECD nations at 48.2 percent of GDP. Sweden had the second highest at 46.3 percent of GDP, followed by Belgium at 44.2 percent of GDP. By contrast, Mexico had the lowest tax burden at 21 percent of GDP, followed by Chile at 22.5 percent. The United States had the fourth-lowest tax burden at 26.1 percent of GDP. The average tax burden among all 33 OECD nations is 34.8 percent of GDP.
The table below compares the gains (+) or losses (-) in tax revenue collections for the 33 OECD nations in 2008.
Total Tax Revenues as Percent of GDP
Source: OECD http://www.oecd.org/dataoecd/41/27/46771900.xls
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