Comparison About Individual Income Tax Rates Between The US and The OECD

Compared to the OECD average, individual income taxes and wealth taxes are included more in public sources of income in the United States.

While 23.9% of total tax revenues in OECD countries are composed of individual income taxes, this share stands out as 42.1% with a difference of 18.2 points in the USA. Corporate tax, on the other hand, made up 6% of total US tax revenue in 2021.

The difference in individual income tax is partly due to the fact that more than half of business income in the United States is declared on natural person tax returns. Compared to other OECD countries, the US approach to taxing business income causes it to increase the share of tax revenues from individual income taxes and decrease the share of corporate tax revenues in the US. While the total tax revenue from wealth taxes is 5.6% on average in OECD countries, this rate is 11.4% in the USA.

In terms of taxes on goods and services, consumption taxes in OECD countries average 32.1%, while these excise taxes only account for 16.6% of US tax revenue. This is because all OECD countries except the USA generally apply high rates of VAT.

State and local sales tax rates in the US are relatively low compared to other OECD countries. In addition, countries have different forms of administration in terms of collection of taxes. The United States and nine other OECD countries, for example, have a decentralized political structure in which state or regional governments play an important role in tax collection.

About half of tax revenue in the US is collected at the state and local levels. The proportional distribution of tax types with in the total tax revenues of each country differs depending on factors such as the economic situation and policy objectives of the country in question.