Comparing U.S. taxes to other countries

A pedestrian walks by a sign outside of a Liberty Tax Services tax preparation office in San Francisco, Calif.

There are few things more divisive than taxes. Many Americans feel they pay too much, and get too little in return. But is that true? One way to look at it -- take an international perspective. We asked Derek Thompson, senior editor at The Atlantic, to look into how American tax rates, and the return on that investment, compare to other countries around the world.

When you compare the median income of a family of four who lives in a wealthy, industrialized nation -- like Japan or Sweden -- what percentage of that family's income goes to the government in taxes?

"If you look across all these developed economies, the OECD average for taxes as a share of the economy is about 33 percent. In the U.S., however, it's about 25 percent. It's considerably lower. And actually among these developed economies, only Mexico, Chile and Turkey have lower taxes than the U.S. as a share of our economy," says Thompson.

So where is the money coming from and where is it going? It's coming from our income and wages. And the money is mostly going to four groups of people -- the sick, poor, retired, and military. Those four groups account for about 80 percent of the federal budget. At the state level, education, Medicaid and transportation make up the bulk of spending from the taxes collected by the government.

Thompson says the U.S. is different from a lot of the countries it's often compared to because the federal government doesn't have a national consumption tax. Plus,  in addition to having a federal government, America also has state and local governments. Consumption taxes -- when you account for state and local -- adds up to about one-fifth of total U.S. revenue. As a result, country-to-country comparisons are a little tricky because the U.S. has consumption taxes at the state and local level and then income and Social Security taxes at the federal level.

But when it comes to deciding where to spend taxpayer money, Thompson says governments of developed countries are remarkably similar.

"Rich, old countries tend to have the same values. They tend to spend a lot of money to help the poor, to help poor families. They tend to spend a lot of money on retirement protection -- what we would call Social Security. They also spend a lot of money on health care. Most developed countries have a public health care system," says Thompson.

About the author

In more than 20 years in public radio, Barbara Bogaev has served as the longtime guest host of NPR’s flagship program Fresh Air with Terry Gross, as well as host of APM’s news and culture magazine, Weekend America and the weekly national documentary series, Soundprint.

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