As Americans scramble to meet today's deadline to file their taxes, they can take comfort in knowing that people in many other countries pay a much larger percentage of their incomes to their governments.
According to an analysis by the Pew Research Center, a single childless American earning the average wage of $50,099 paid 24.8 percent of gross income in federal income and payroll taxes (Social Security and Medicare) in 2014, well under the level typical of other countries in the Organization for Economic Cooperation and Development (OECD).
A two-income married couple with two kids would pay 19.4 percent of their income in taxes if one partner earned the average wage and the other earned about two-thirds of it. Indeed, the U.S. ranked at or near the bottom of the OECD in a variety of taxation scenarios that Pew calculated. The think tank excluded state and local taxes for its figures, which can be substantial.
"Today, Americans' favorite thing to do is complain that they're overtaxed when we are really not," said Howard Gleckman of the Tax Policy Center. "The effective rates in Denmark are about twice what they are in the United States. ... Much of Europe is the same [with rates of] 40 percent or higher."
Although people in Europe and Canada pay higher taxes, they get more for their money through free health care and other social benefits that aren't available in the U.S. The taxes that citizens of these countries pay can be steep.
"Since those governments spend more, they need to tax more," said Kyle E. Pomerleau of the Tax Foundation. "A lot of the revenue for those programs come from payroll taxes paid by middle-income people in those countries. Thus, the higher rates."
Taxes have become a focal point of the presidential campaign. Republicans such as Donald Trump are calling for a significant reduction in marginal tax rates on individuals and businesses. Ted Cruz supports a flat tax and wants to abolish the IRS. Fiscal conservatives have long argued that the statutory corporate tax rate of 35 percent is one of the highest in the OECD and places the U.S. at a competitive disadvantage.
Democrat Bernie Sanders, who often cites Denmark as a model for the U.S. to emulate, has made the widening gap between rich and poor a focal point of his campaign. To that end, he has proposed a $15 trillion tax increase, the largest since World War II, by raising taxes on the wealthy and closing corporate loopholes. Low and middle-income people would pay on average $4,700 more in taxes, according to the Tax Policy Center.
Sanders, who disputes the think tank's conclusions, has argued that he'll save Americans money over the long run by providing them additional services such as free heath care and college tuition.
"He is talking about higher taxes across the board on almost everyone," said Bob Goulder, tax policy expert and contributing editor to Tax Analysts. "I give him credit for being honest about it. People can quibble -- and rightly so -- about the ramifications of raising everyone's taxes. Would it make the corporate sector uncompetitive? Would it drive capital overseas? Would it cost jobs?"
According to Goulder, who had no answers to any of these questions, the U.S. is unable to afford the cost of government as things stand now because the country collects taxes at a rate of about 17 percent of GDP and is spending it at a rate of 23 percent.
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