Is the American Tax Burden Really So High?

July 3, 2014 | By: TaxCure Staff

tax-rates-comparison-by-countryAmericans like to complain that they pay too much in taxes. However, that might not necessarily be the case. Recently, the Organisation for Economic Co-operation and Development (OECD) took a look at the tax burden on single workers in 12 different countries. Turns out things in the United States really aren’t so bad, when compared with some of its peers.

How Does the United States Stack Up Tax Wise?

First of all, the OECD performed its calculations on a rather simple subset of people: single workers. It also assumed an “average” salary for the country and then figured taxes and social security-related chunks. You can see, below, the percentage of salary this single work pays in taxes and social security for the 12 countries analyzed:

  • Belgium: 42.6% 
  • Germany: 39.6% 
  • Denmark: 38.6% 
  • France: 28.4% 
  • United States: 24.6% 
  • United Kingdom: 24.1% 
  • Australia: 23.1% 
  • Canada: 22.8% 
  • Japan: 21.6% 
  • Switzerland: 17.1% 
  • South Korea: 13.4% 
  • Mexico: 9.8%


In some cases, it’s clear that the lower tax burden comes with a cost. Sure, Mexico has the lowest tax burden of the countries listed. However, the infrastructure and services provided aren’t that great in many areas in Mexico.

On the other hand, Denmark is consistently held up as a model of a great place to live, with a number of services for a wide swath of the population, and high ratings on happiness scales. (Even though other Scandinavian countries aren’t on this list, they often have high tax burdens coupled with services for their people and high happiness ratings.)
What I found most interesting was where Canada sat in relation to the United States. Here in the States, we like to think that Canadian taxes are too high, in order to help them pay for the healthcare provided via their interesting system (involving federal and provincial pay systems). However, it appears that there is universal health care in Canada provided at a lower tax burden.

The Realities of the U.S. Tax Burden

Of course, this study took a look at the single worker making an average salary, so it isn’t truly reflective of the tax experience that is the United States. When you consider the tax benefits of a couple with children, the tax burden in the United States drops lower. Additionally, single workers with children also find a lower tax burden. There are a number of situations that can change your tax burden, lowering your tax liability.

Real-life is much less cut and dry than the way it is presented for the purpose of the OECD study. We have marriages and children and special circumstances. There are credits and deductions, and other tax planning strategies aimed at reducing tax liability. The U.S. tax code sets up situations in which people like Warren Buffett can have an effective federal tax rate of 11% and Mitt Romney’s effective tax rate can be 15%.

The reality is that, among developed nations, no matter how you slice it, the United States tax burden isn’t really out of the ordinary. And, in many cases, it’s even lower than the burden in other countries.