How do United State Taxes compare internationally

Total Tax Revenue
 The United States raises less tax revenue as a percentage of gross domestic product (GDP) than most other countries in the Organization for Economic Co-operation and Development (OECD). In 2003, taxes in the United States, including all levels of government, amounted to 25.6 percent of GDP, compared with 33.9 percent for other countries in the Group of 7 (G7) and 34.7 percent for non-G7 OECD countries. The United States raises more personal income tax and property tax as a share of GDP than other OECD countries, but less corporate income tax, Social Security contributions, and taxes on goods and services.

        US taxes are low relative to those in other developed countries. In 2014, US taxes at all levels of government represented 26 percent of GDP, compared with an average of 34 percent of GDP for the 34 member countries of the Organisation for Economic Co-operation and Development (OECD). Among OECD countries, only Korea, Chile, Mexico collected less than the United States as a percentage of GDP. In many European countries, taxes exceeded 40 percent of GDP. But those countries generally provide more extensive government services than the United States does.

Composition of Tax Revenue
1.Income and Profits Taxes: 
Taxes on personal income and business profits made up 48 percent of US tax revenue in 2014, a higher percentage than in most other OECD countries, where such taxes averaged 34 percent of the total (figure 2). Australia, Denmark, and New Zealand topped the United States in this category, generating just over half of their total revenue from such taxes. In the United States, personal income taxes alone generated 30 percent of total tax revenue compared with 25 percent on average within the OECD.

2.Social Security Contributions: 
The United States collects relatively less revenue dedicated to retirement, disability, and other social security programs—24 percent of total tax revenue—than the 26 percent OECD average. Some countries were well above that average: the Slovak and Czech Republics, Slovenia, the Netherlands, and Japan all collected more than 40 percent of their revenue from that source.

3.Property Taxes: 
Property taxes provided almost twice as large a share of US tax revenue—11 percent in 2014—than the OECD average of 6 percent. Almost all revenue from taxes on property in the United States is collected by state and local governments.

4.Goods and Services Taxes: 
The United States relies less on taxes on goods and services (including both general consumption taxes and taxes on specific goods and services) than any other OECD country, collecting 17 percent of tax revenue this way compared with 33 percent for the OECD. The value-added tax (VAT)—a type of general consumption tax collected in stages—is the main source of consumption tax revenue, employed worldwide in 160 countries including all 34 OECD member countries except the United States. Most consumption tax revenue in the United States is collected by state and local governments.
 reference from:
www.taxpolicycenter.org/briefing-book/how-do-us-taxes-compare-internationally

Comments

Post a Comment

Popular posts from this blog

Innovation development in Financial Service Sector

Image
  The 2008 global financial crisis not only marked the end of the the benign credit environment, it also change the way corporate client and their bankers views transnational banking.Sound transnational banking practices like payment, receivable and reconciliation and trade risk instrument moves back to the center of corporate client business agenda increasing competition for better products offering         Visibility of information become critical as clients sought real time access to their global cash position in order to manage their working capital requirement and liquidity..Equally, international trade products become more important in managing risk and banks are seeking more annuity-based revenues with lower capital cost and less capital consumption while regulator are drafting raft to prevent another collapse.         In Africa, both corporate client and banks have had to invest in technology and operation supporting the centralization of treasury function while delivery
Read more

Progressive Tax System and Income Equality

Image
  The major innovation in taxation in the economy is the the creation and development of progressive tax systems which play a key role in the reduction of income inequality and support  the economy growth      A proportional tax system, assesses tax rate to taxpayers regardless of income or wealth. It is meant to create equality between marginal tax rate and average tax rate paid. Under a this tax system, individual taxpayers pay a set percentage of their income regardless of total income earned. For example, an income tax of 10% that does not increase or decrease as income rises or falls results in a proportional tax. In this example, an individual who earns $20,000 annually pays $2,000 under a proportional tax system, while someone who earns $200,000 each year pays $20,000 in taxes.       The progressive tax system, assess tax liability as an individual or entity's income increases. Tax burdens are meant to be more of an imposition to wealthy, high-income earners than they
Read more

Rethinking Industrialization in Africa

Image
 In today global economy, African remain a weak line toward industrialization.If the world are to achieve sustainable development goal as per United Nation 2030 Agenda, this must help African countries to accelerate its development by promoting rapid and responsive to industrialization.   Africa economy must moves beyond the producing raw material to build dynamic and competitive manufacturing sector with higher value added chain. They must draw on the opportunity present by the participant in the global and regional value chain. New and innovation industrial development strategy as well as carefully target measure to attract foreign direct investment.      To succeed ,Africa government will need adequate capacity, competent and skillful workforce to mobilize and interact with all stakeholder in order to serve as attractive investment climate. The necessary reform will open the way for public- private partnership which will provide investment for infrastructure development.  
Read more