How high are taxes?

Bruce Bartlett is a national treasure. A week ago, he posted on tax levels in the US and various other countries, that showed our tax burden was relatively low. Evidently, some readers complained that he did not include state and local taxes in the calculations. Did he ignore their calls? No, he redid the calculations, this time including state and local taxes as well:

The table below shows total taxes, including state and local government taxes, as a share of G.D.P. in 2008, the latest year for which there is complete data. The table makes clear that the United States has very low taxes by international standards.

When Americans see these data they are usually incredulous that Europeans submit to such seemingly oppressive tax levels. Conservatives, in particular, tend to view freedom as a fixed sum: the bigger government is as a share of G.D.P., the less freedom there is for the people (if government consumes, say, 40 percent of G.D.P., then people are only 60 percent free).

The late Milton Friedman popularized this idea, but even he thought that freedom would not be seriously threatened in Western democracies until government spending reached 60 percent of G.D.P. We are far away from that “tipping point,” as he called it; in 2010, total federal, state and local government spending amounted to 36 percent of G.D.P.

Readers of this blog know that, for us, there’s no better answer than data. It’s hard to argue with these.

Update: Center for Budget and Policy Priorities graphed these numbers.

*For the record, Turkey, Chile, and Mexico are the three OECD countries that have more uninsurance than we do. Interesting.

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