Big tax Americans do not pay, and exchanges we give up
Big tax Americans do not pay, and exchanges we give up
In terms of taxation, the burden of Americans is not as heavy as other developed countries. However, this tax reduction measure is not uncompromising.
Overall, the total tax collected in 2023 accounted for 25.2 % of the GDP of the United States (GDP). This is lower than the average level of the Economic Cooperation and Development Organization (OECD) countries of 33.9 %, which is far lower than 40 % of the tax to GDP ratio of nine European countries/regions.
Cato Institute, a liberal think tank, said that at the per capita level, the average salary of 22 European countries in Europe is more than $ 11,676 more than the United States than the United States. A family of four pays more than $ 21,546.
Alan Cole, a senior economist at the Tax Foundation, said: “Compared to other large and relatively high -income economies, the United States is a low -tax country.” nation.”
An important reason for the difference is that more than 170 countries/regions around the world levied VAT in the federal level or VAT. This is the tax instrument that President Donald Trump delivered a speech at the World Economic Forum last week. Essence VAT is a consumption tax levied on the value of goods and services. In the United States, this tax does not exist. Our federal government mainly relies on income tax.
Cole said: “Therefore, in most cases, in most cases, you will bear a lower tax burden and account for a percentage of American income.” “Compared to European countries, it is completely Effective, this is surprising. “” “.”
However, lower taxes do not have a large trade -off, mainly to rely on states to manage large -scale basic plans and the overall small security network of American citizens.
The easiest way to consider VAT is the very wide -level business tax at the federal level. The tax is not only suitable for the goods you buy in the store, similar to the state -level business tax here, but also applicable to service.
Multiplochemaker conducts family repair. In most states, you usually do not pay business tax for this, but in Europe, repairs will pay VAT. VAT is also more complicated than fixed sales tax. For example, if a company purchases an intermediate product from another company, the two companies will pay a part of VAT.
Therefore, Cole said that the value -added tax is included in everything in the economy. The value -added tax received by these countries is as high as 20 % to 25 %, which is much higher than the commonly evaluated business tax of the United States.
Cole said, “This is just that they have raised a lot of money.”
Some countries may levy some VAT interest rates in certain commodities and services to help low -income people spend a greater share in grain and transportation. Other countries can be exempted from low -income citizens' payment income tax. This is another source of taxes for developed economies to offset the burden on VAT.
This photo shows the National Taxation Bureau (IRS) headquarters building held in Washington on April 13, 2014. InAssociated Press
Our federal government is not a value -added tax, but to a large extent relying on income tax, which accounts for half of all US income. OECD said that this includes 44 % of personal income, profit and income tax, and 7 % from corporate income and income tax.
American income tax is also progressing. The two minimum tax rates pay only 10 % and 12 % income, far lower than the value -added tax rate. Even those who earn more and pay higher tax rates can usually reduce their overall tax burden through tax credits and deductions.
For example, according to the analysis of Pew Research Center, the average effective tax rate for people with $ 200,000 to $ 500,000 in 2018 was 16.6 %. Some poorest Americans eventually did not pay income tax, but received money from the federal government in the form of refundable tax credit.
One of the possible reasons is due to the huge number of wealthy Americans. Compared with other countries, the highest income in the United States is extremely high.
Corch said: “We have more than one million people earning more than $ 500,000 a year. In other countries, this is almost unheard of.” “This is still a few people, but they have contributed a lot of income tax income and saved it at the same time saved. Many ordinary people cannot pay a lot of taxes. “
The most important thing is that the United States is the location of many high -profit companies, and these companies also help the income tax basis. Cole said that the source of revenue of these favorable can be used to make the US system, “Even if they do not have the main tax made by Europeans.”
Read more: 2024-2025 federal income tax brackets and rates
In this photo illustration, 1040 US personal income tax declaration documents were seen on April 15, 2024 on April 15, 2024. (Photo illustration of Michael Bocchieri/Getty Images) InMichael Bocchieri via Getty Images
Another key difference between the US tax system and other parts of developed countries is the role of national and local taxes. The US federal tax accounts for about two -thirds of the total tax burden facing the United States. The rest are from the country.
The US state and regions depend on income tax, business tax and property tax. Thomas Brosy, a senior research assistant at the Urban-Brookings Tax Policy Center, said the taxes of goods and services account for about 16 % of the total tax burden and property tax.
“In terms of property tax, the United States is usually higher than most countries in terms of property taxes.” The average value of the OECD is 5 %.
Other European countries, such as Britain, Switzerland, and Germany, have more quasi -country differences and more tax rights. But in most cases, the United States is unique in the decentralized tax system.
Cole said: “Our state is extremely strong.” “You can get the United States from the names of our country. We will summarize these multiple jurisdictions of judicial jurisdictions.”
Uncle Sam, the 85th annual Messi Department Store thanksgiving parade, and the right and other participants along the sixth largest road along the sixth Avenue of New York along November 24, 2011 (Thursday). InAssociated Press
The reason for the large amount of income in each state is because they paid the bills for two huge amounts of expenditure: schools and police are usually covered by federal government in other countries. Although this provides more control of these necessary plans for state residents, the structure also allows greater differences in various states, especially education.
When it comes to lower taxes, this also depends on weighing. The United States has a smaller federal government to help offset lower income (from the percentage aspect). This fact's facts compared with its European peers, this fact.
Brosy said: “Some countries with the largest GDP share as tax revenue are countries with more generous and extensive social security networks.”
Brosy said that although the United States specially levies taxes to pay its social security obligations, the percentage of its collection is “slightly lower than the average level” compared with other countries. Some of these other countries, especially the Scandinavian Navia country, also provide funds for universal healthcare, higher education, parenting leave, and children's and elderly care.
These are the expensive expenses paid by Americans in full-the surface is from tax saving.
Janna Herron is a senior columnist of Yahoo Finance. Follow her on X @JannaherronEssence
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