If you just filed your taxes this month, chances are you’re not feeling a huge amount of goodwill toward the U.S. tax system.
Still, you may want to hold off on those plans to move overseas to avoid the tax man.
The Organisation for Economic Co-operation and Development this week released a tax comparison for typical wage earners in it 34 member countries, mainly the world's wealthier, democratic countries in Europe, Asia and the Americas.
Surprise: Most of them are paying a lot more than you.
The OECD report looked at the total labor costs for full-time, private sector workers – that is, gross wages plus whatever taxes the employer is required to pay on that employee’s behalf. Then they calculated how much of that total went to federal, state or regional taxes.
In the U.S., an estimated 29 percent of the average worker’s total labor costs went toward taxes last year.
That’s far lower than Belgium, Germany, Hungary and France, where taxes accounted for about half of an average worker’s labor costs.
There are a few countries where workers are getting more of a tax break. The countries with the lowest tax bills included Mexico, New Zealand and Chile, where just 7 percent of the average worker’s total costs went to taxes.
The OECD found that taxes increased in 26 of the 34 OECD countries last year. The U.S. was one of the few countries to see a decrease because of cuts in Social Security contributions. That offset the end of the Making Work Pay tax credit.
For comparison purposes, the calculations assumed the average worker was single and without children. The OECD did separate calculations for other individuals and families with children in its full report.
Matthias Rumpf, a spokesman for the OECD, said the U.S. ranks lower than average in part because it does not have compulsory health care. That means Americans’ health care costs aren’t included in their total taxes.
The OECD also didn’t include mortgage interest rate deductions in its calculation, in part because it’s difficult to make assumptions about how much a person would pay and thus deduct.