Tax Revenues Fall Across the OECD

December 29, 2010

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

Country 2007 2008 Change
Mexico 17.9 21 3.1
Germany  36 37 1
Austria 42.1 42.7 0.6
Hungary 39.7 40.2 0.5
Belgium 43.8 44.2 0.4
Netherlands 38.7 39.1 0.4
Greece 32.3 32.6 0.2
Switzerland 28.9 29.1 0.2
Turkey 24.1 24.2 0.1
Finland 43 43.1 0.1
Portugal 35.2 35.2 0
Korea 26.5 26.5 0
Luxembourg 35.7 35.5 -0.1
Slovak Republic 29.4 29.3 -0.1
Italy 43.4 43.3 -0.1
Japan 28.3 28.1 -0.2
France  43.5 43.2 -0.3
United Kingdom 36.2 35.7 -0.5
Poland 34.8 34.3 -0.5
Slovenia 37.8 37.2 -0.6
Canada 33 32.3 -0.7
Denmark  49 48.2 -0.8
Sweden 47.4 46.3 -1.1
Czech Republic 37.3 36 -1.2
Norway 43.8 42.6 -1.2
New Zealand 35.1 33.7 -1.4
Chile 24 22.5 -1.5
United States 27.9 26.1 -1.8
Ireland 30.9 28.8 -2.1
Australia 29.5 27.1 -2.5
Israel  36.3 33.8 -2.5
Iceland 40.6 36.8 -3.9
Spain  37.3 33.3 -4
Unweighted average:
OECD Total 35.4 34.8 -0.6

Source: OECD http://www.oecd.org/dataoecd/41/27/46771900.xls

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