19/10/2007 11:44:51 am
Rising Taxes in the OECD? The latest analysis from the OECD of the total taxes in the 30 individual countries shows that the level in 2006 was the highest since 2000. Total taxes as a share of GDP increased in 14 countries and decreased in 11. The difference is very small. The average for 3006 was 36,2 per cent of GDP.

We do have an international tax competition. Corporate taxes, capital taxes and several labour taxes are coming down. So why are total taxes not decreasing? Well, because states collect more taxes on consumption nowadays, i e VAT. The most economically distorting taxes - in a globalised world - are decreasing.

But there is another point to make. The years 2000 and 2006 have something in common. They were years when the global economy as well as economies in the OECD were booming. Somewhat ironically, that leads to higher tax revenues, despite tax rates remain the same or even decrease.

See a table of taxes as a share of GDP in OECD countries through the years here - >