Whenever people talk about the federal budget, taxes and spending rates always come up.
There is an interesting table on Wikipedia listing the tax rate versus the spending rate as a percentage of GDP for 177 countries around the world.
The table is in alphabetical order by country name, which isn't much help, so I copied it into Excel and sorted in order of tax rate and then spending rate, to see how the different countries fell out.
Just how bad is it in America? Turns out, not that bad at all.
The United States places 61st in tax rate, with 26.
9% of GDP (1st being highest rate, 177 being lowest).
All of Western Europe, Japan, and most other wealthy countries have a higher tax rate, in the 35% to 45% range.
In fact, the US could raise its tax rate by 5% of GDP tomorrow and still only place 40th.
So its hard for me to think that taxes are all that bad in America.
Many African, South American, and Southeast Asian countries have lower rates, in the 15% to 25% range, but many of these are still considered "third world.
" On the spending side, the United States places 56th, with 38.
9% of GDP.
Again, well below most of the developed world, generally ranging from 40% to 50%, and above the Third World, ranging from 12% to 25%.
This follows the same pattern as before.
There are some notable exceptions here though.
Australia for example taxes more than the US (30.
8%) but spends less (34.
3%).
This could explain why Australia has been largely unaffected by the global recession and debt crisis.
Canada is also posting similar numbers.
Now, just for fun, lets correlate the tax rate and spending rate with the Human Development Index (HDI), a reasonably good measure of the quality of life in a country.
There are apparently two types of HDI now, with the Inequality-Adjusted version claiming to be more accurate, as it removes the skew caused by the super wealthy in a country.
So, using the Inequality-Adjusted HDI numbers, the United States places 12th, right in the middle of Western Europe and the wealthiest nations around the world.
This is actually quite surprising when you think about the tax rate and spend rate.
America taxes less than 60 other countries, spends less than 55 of them, and yet, still ranks 12th in HDI.
Compare that to the United Kingdom, which places 18th in taxes, and 23rd in spending, but only manages 21st in HDI.
Australia is 2nd, serving as a role model for less spending but high quality of life.
Human Development Index - source Wikipedia So my take away is this, despite federal budget problems, America is doing pretty well.
Our tax rate is low, our spending is low, and our quality of life is very high.
Put that on the news.
Source: http://en.
wikipedia.
org/wiki/Government_spending#Government_spending_as_a_percentage_of_GDP
There is an interesting table on Wikipedia listing the tax rate versus the spending rate as a percentage of GDP for 177 countries around the world.
The table is in alphabetical order by country name, which isn't much help, so I copied it into Excel and sorted in order of tax rate and then spending rate, to see how the different countries fell out.
Just how bad is it in America? Turns out, not that bad at all.
The United States places 61st in tax rate, with 26.
9% of GDP (1st being highest rate, 177 being lowest).
All of Western Europe, Japan, and most other wealthy countries have a higher tax rate, in the 35% to 45% range.
In fact, the US could raise its tax rate by 5% of GDP tomorrow and still only place 40th.
So its hard for me to think that taxes are all that bad in America.
Many African, South American, and Southeast Asian countries have lower rates, in the 15% to 25% range, but many of these are still considered "third world.
" On the spending side, the United States places 56th, with 38.
9% of GDP.
Again, well below most of the developed world, generally ranging from 40% to 50%, and above the Third World, ranging from 12% to 25%.
This follows the same pattern as before.
There are some notable exceptions here though.
Australia for example taxes more than the US (30.
8%) but spends less (34.
3%).
This could explain why Australia has been largely unaffected by the global recession and debt crisis.
Canada is also posting similar numbers.
Now, just for fun, lets correlate the tax rate and spending rate with the Human Development Index (HDI), a reasonably good measure of the quality of life in a country.
There are apparently two types of HDI now, with the Inequality-Adjusted version claiming to be more accurate, as it removes the skew caused by the super wealthy in a country.
So, using the Inequality-Adjusted HDI numbers, the United States places 12th, right in the middle of Western Europe and the wealthiest nations around the world.
This is actually quite surprising when you think about the tax rate and spend rate.
America taxes less than 60 other countries, spends less than 55 of them, and yet, still ranks 12th in HDI.
Compare that to the United Kingdom, which places 18th in taxes, and 23rd in spending, but only manages 21st in HDI.
Australia is 2nd, serving as a role model for less spending but high quality of life.
Human Development Index - source Wikipedia So my take away is this, despite federal budget problems, America is doing pretty well.
Our tax rate is low, our spending is low, and our quality of life is very high.
Put that on the news.
Source: http://en.
wikipedia.
org/wiki/Government_spending#Government_spending_as_a_percentage_of_GDP