Monday, March 21, 2011

Tax Foundation: We Soak the Rich better than any Country

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Interestingly, countries with top personal income tax rates that are higher than in the U.S., such as Germany, France, or Sweden, have ratios that are closer to 1 to 1. Meaning, the share of the tax burden paid by the richest decile in those countries is roughly equal to their share of the nation's income. By contrast, we prefer to have the wealthiest households in this country pay a share of the tax burden that is one-third greater than their share of the nation's income.

Table 4.5. Alternative measures of progressivity of taxes in selected OECD countries, mid-2000s





B. Percentage share of richest decile

1. Share of taxes of richest decile
2. Share of market income of richest decile
3. Ratio of shares for richest decile (1/2)
Australia
36.8
28.6
1.29
Austria
28.5
26.1
1.10
Belgium
25.4
27.1
0.94
Canada
35.8
29.3
1.22
Czech Republic
34.3
29.4
1.17
Denmark
26.2
25.7
1.02
Finland
32.3
26.9
1.20
France
28.0
25.5
1.10
Germany
31.2
29.2
1.07
Iceland
21.6
24.0
0.90
Ireland
39.1
30.9
1.26
Italy
42.2
35.8
1.18
Japan
28.5
28.1
1.01
Korea
27.4
23.4
1.17
Luxembourg
30.3
26.4
1.15
Netherlands
35.2
27.5
1.28
New Zealand
35.9
30.3
1.19
Norway
27.4
28.9
0.95
Poland
28.3
33.9
0.84
Slovak Republic
32.0
28.0
1.14
Sweden
26.7
26.6
1.00
Switzerland
20.9
23.5
0.89
United Kingdom
38.6
32.3
1.20
United States
45.1
33.5
1.35




OECD-24
31.6
28.4
1.11




Source: Computations based on OECD income distribution questionnaire.