The Daily Beast’s Michael Tomasky is celebrating this April 15 by declaring that America is “the most undertaxed advanced country in the world.” He claims that this chart offers proof of his assertion.
The chart in question shows that tax revenues in the United States total a mere 24.1% of GDP – by comparison, the United Kingdom, for example, collects 34% of GDP in taxes; in France the figure is 42.4%, and in Denmark it’s 48.1%.
But this is very misleading. After all, in all of the countries in question — besides the United States — almost all citizens get their healthcare from the government – that is to say, health care is included in their tax bill. By contrast, in the United States, private spending accounts for an estimated 44% of health expenditures.
So, to get a more accurate comparison between the U.S. and other advanced nations, we should add the percentage of GDP that constitutes private health spending (about 7.5% of total GDP in the United States) to the tax burden. If we do that, we find that Americans parted with roughly 32% of GDP this year through taxes and healthcare spending. That puts us right on par with Israel, New Zealand, Canada, and Iceland.
Not that that tells us whether or not America is undertaxed, of course. That’s a question that a bar chart can’t answer.
