That said, complaining that taxes are too high is almost “de rigueur” in many circles. There are myriad examples of ways people demonstrate how burdened they are with taxes:
- “I could have gone on a fabulous two week vacation if I didn’t spend so much on those taxes”
- “I worked until April 10 just to pay off my taxes”
- “Once they take out taxes, there’s not that much left!”
Admittedly, I too have had similar thoughts at different times.
However, when you take a comparative look at taxation around the globe, it becomes clear that some are taxed more than others. For those of us here in the United States, as well our Canadian neighbors, the results may be enlightening.
Here is a look at the Total Tax Revenue by country, as a percentage of Gross Domestic Product:
Source: OECD Tax Database
As can be seen, the tax revenue as a percentage of GDP is actually relatively low for the U.S. and Canada. Compare these figures with that of France and Italy, for example. It would appear that we have it better here.
Now, let’s layer in savings rates for the same set of countries:
|Country||Tax %||Savings %|
Sources: OECD Tax Database and OECD Economic Outlook Database
The tax data was from 2007 and savings rates from 2009, close enough for a near apples-to-apples comparison. Overall, it appears that the U.S. and Canada are not only taxed on the lower end of this set of countries, but also save very little as well.
What’s the lesson from this excercise?
My take is that though we don’t want our taxes to go higher, they could be worse – and shouldn’t be preventing us from saving more than we are at this time.