Across the country, recession-hit states are coming up with tax reforms to support their struggling local economies. While 18 states have cut taxes in 2013, others such as New York want to hike taxes for the rich.
Though liberals and conservatives may not agree on the best tax policy for the country, it seems that for now, the U.S. is smack dab in the middle when it comes to global tax rates. Though it's hard to come up with just one measure for comparing tax rates — there are different policies for income levels and household situations — the BBC compiled the following lists to give a baseline understanding into what they look like in comparable economies in the G20 and the OECD.
Percentage of income that a high earner (average $400,000) takes home:
Italy - 50.59% (takes home $202,360 out of $400,000 salary) India - 54.90% United Kingdom - 57.28% France - 58.10% Canada - 58.13% Japan - 58.68% Australia - 59.30% United States - 60.45% (based on New York state tax) Germany - 60.61% South Africa - 61.78% China - 62.05% Argentina - 64.02% Turkey - 64.64% South Korea - 65.75% Indonesia - 69.78% Mexico - 70.60% Brazil - 73.32% Russia - 87% Saudi Arabia - 96.86% (so you take home $387,400 out of the $400,000 salary)
This is assuming that the high earner is married with two children. For most of these countries, the average take home pay is between $230,000 to $280,000 — though the difference between Italy and Saudi Arabia is pretty staggering.
There is also a significant difference when it comes to average earners as well.
Income tax rate for a person with average income (single and with no children):
Belgium - 42.80% Germany - 39.90% Denmark - 38.90% Hungary - 35% Austria - 34% Greece - 25.4% OECD Average - 25.10% UK - 24.90% USA - 22.70% New Zealand - 16.40% Israel - 15.50% Korea - 13% Mexico - 9.50% Chile - 7%
Income tax rate for a person with average income (married and with two children):
Denmark - 34.8% Austria - 31.9% Belgium - 31.8% Finland - 29.4% Netherlands - 28.7% Greece 26.7% UK - 24.9% Germany - 21.3% OECD average - 19.6% USA - 10.4% Korea - 10.2% Slovak Republic - 10% Mexico - 9.5% Chile - 7% Czech Republic - 5.6%
Almost every country here provides child tax credits or drops tax rates for couples with children, with the only exception being Greece.
So while American conservatives may criticize liberals for attacking the super-rich and liberals may tear into conservatives for overburdening the middle class, it seems that for now, our tax policies are pretty average in the context of comparable economies.