United States taxation compared to various European countries

It is well established that the United States has a much lower average tax burden than Europe (broadly).

Tax Revenue as Percentage of GDP OECD comparison

source: OECD Tax Database

However, some people seem to believe that ordinary people in Europe do not actually have to pay much higher taxes and that somehow (illogically) these countries with presumably lower income inequality are able to generate all of this tax revenue to pay for all this “free” stuff by just taxing the top 5% or some such.  This is complete nonsense!  These European countries generate this revenue, in the main, with a much broader tax base, both income and social security taxes (and consumption taxes to lesser extent).

Below are a bunch of graphs and figures produced from the OECD’s estimates from the statutory tax code (note: these are particularly sensitive to assumptions made)

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National Healthcare Expenditure: United States versus Other Countries: The US is not really an outlier.

UPDATE (9/25/2016): I just created a new and (hopefully) much improved version of this argument here.  I suggest you start there instead.

Numerous people have asserted that the United States spends dramatically more on healthcare than other countries, presumably even more than countries of our level of wealth and affluence, and that this can only be explained by the fact that we do not have single-payer or some such.

Here are some examples graphs used to make this point

Above-expected-500x406 (1)

health-care-spending-in-the-united-states-selected-oecd-countries_chart02

These appear to be very convincing at first blush, but i never found these arguments particularly convincing due primarily to:

  1. Imperfect comparability between the selected countries
  2. Issues relating to comparing countries of the “same” GDP
  3. cherry-picking of countries

I knew the proponents of single-payer were, at best, making an incomplete argument and that it invited an exaggerated impression of what we should likely expect from a country like ours, but, up until now, I lacked the data and the time to present these argument comprehensively.  I recently got in an argument with someone over this subject and found a treasure trove of data all in one place (mostly) to thoroughly debunk this overly simplistic argument.

To make my points, vis-a-vis fundamental issues with naive treatment of GDP per capita and sensitivity to comparison countries, here is a quick chart showing National Healthcare Expenditure (NHE) as a percent of GDP by GDP per capita

NHE_as_Pct_GDP_by_GDP_per_capita

 

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