Friday, November 15, 2002

TAX PRESSURE

Here are some facts from a new report (click on: "Rapport 2002:5 Internationella skattej�mf�relser") by the Swedish Taxpayers Association:

* Total tax pressure in percent of GDP in 2001:
- Sweden: 50.8%
- USA: 28.9% (2000)
[Source: OECD]

* Purchasing Power Index - GDP / capita:
- Sweden: 104 (17th place)
- USA: 148 (2nd place)
[Source: OECD]

* Value Added Tax (VAT):
- Sweden: 25%
- USA: 5 - 9% (sales tax)
[Source: OECD]

* Payroll taxes:
- Sweden: 32.8%
- USA: 9.4%
[Source: Taxpayers' Association of Finland]

UPDATE 11/16/02: I want to give a short response to comments that I have received so far. "Saquobyesse": Luxembourg took the first place regarding the Purchasing Power Index. Most of the report is in Swedish, but the headlines are in English so you should be able to figure out the information in the different tables. Robin Goodfellow: I think that the most important thing in the debate between different economic systems, is to say that capitalism is the moral system. You get more material wealth on a free market, due to the fact that you are free to act. The issue of prosperity is a consequence of the proper ethics.

Glenn Reynolds: I am sorry that I can't give you a "Mississippi comparison." But here is another tidbit: At the end of the report, is a table with a revised tax pressure list, compiled due to some criticism on how to calculate the total tax pressure. Sweden has in general a higher level of taxes because they tax financial transactions more often and the common use of welfare handouts. But even with this accounted for, Sweden tops the list!

* Revised Tax Pressure - Adjusted Tax Pressure:
- Sweden: 45.2%
- USA: 29.2%
* Revised Tax Pressure - Tax on work:
- Sweden: 35.1%
- USA: 20.4%

A short note on the Swedish Taxpayers Association ("Skattebetalarnas f�rening" in Swedish). I think it is good thing that an ad hoc organization like STA exists, but it is a bit sad that they are not principled enough and they have a tough time to be heard in the political debate. For more information on taxes, go to World Taxpayers Associations.