Is the U.S. the Highest Taxed Nation in the World? | Committee for a Responsible Federal Budget (2024)

FAQs

Which country pays the highest tax in the world? ›

Ivory Coast has one of the highest tax rates in the world, with a top individual income tax rate of 60%. This high rate is part of the country's efforts to fund public services and infrastructure.

Looking at national tax revenues as a share of the gross domestic product (GDP) in 126 countries and territories worldwide, Denmark had the highest revenue as a share of its national GDP, with almost half of its GDP coming from taxes.

California has the highest individual income tax burden, while seven states (including Texas, Florida, and Washington) have the lowest. Washington has the highest sales and excise tax burden, while New Hampshire has the lowest. Red states have a lower tax burden than blue states, on average.

Where does the US rank in terms of highest taxes? The US ranks at number 31 out of the 38 OECD countries as of 2023.

Most of the government's federal income tax revenue comes from the nation's top income earners. In 2021, the top 5% of earners — people with incomes $252,840 and above — collectively paid over $1.4 trillion in income taxes, or about 66% of the national total.

And even though the United States has the most progressive tax system in the world, its overall tax and transfer system reduces inequality less than those in peer countries do: The most redistributionist countries on the planet tend not to be those with really progressive taxes.

The nine states that don't have an earned income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

1. Bridgeport, Connecticut. As one of the wealthiest cities in America, Bridgeport carries the highest overall tax rate in the nation. Wealthy taxpayers earning over $150,000 per year are on the hook for up to 22% in state and local taxes.

TOTAL TAX REVENUE

In 2021, taxes at all levels of US government represented 27 percent of gross domestic product (GDP), compared with a weighted average of 34 percent for the other 37 member countries of the Organisation for Economic Co-operation and Development (OECD).

Why are US taxes so high? ›

California's tax system is relatively flat overall, whereas most states have highly regressive taxes that ask less of the rich than of anyone else. California's choice to have a less regressive system largely explains why California collects more tax revenue per capita than other states without especially high tax ...

Is Canada One of the Highest-Taxed Countries in the World? Canada is ranked #25 out of 172 countries in the list of highest-taxed countries in the world. While Canada isn't the highest taxed overall, we are within the upper third of the highest-taxed countries in the world.