More on tax comparisons

Jordan claimed that my comparison of tax rates to Australia was not fair as it was the Federal Government only. Several people pointed out that there are no state income taxes.

But it is an interesting question – what is the size of the total government tax take – at all levels, including local, for each country.

A very nice person has helpfully shared with me some data from the subscription only OECD Economic Outlook 80 database. The data shows general government total tax and non-tax receipts as a percentage of GDP since 1990. It is a consolidation of accounts for central, state and local governments plus social security.

Of the 27 countries in the data series, Australia has the 7th lowest tax/income as a % of GDP, being 36.5% in 2006. NZ is in 17th place at 43.4% – a massive 7.1% more.

But what is more fascinating is how NZ’s place has changed over time.

You see in 1999 NZ was in 9th place. On average every year we have dropped a place, increasing our tax take compared to other countries.

And who are the countries ahead of us? Ireland is in 5th place. Their lower taxes speak for themselves in terms of results. Switzerland is in 6th place.

Oh and Australia. Well by 2008 it is predicted they’ll be in 5th place, and that is before the latest tax cuts.