Trend of overall tax to GDP ratio in the EU, US and Japan

| May 22, 2012 | 0 Comments
Overall Tax to GDP in EU, US and Japan

Overall Tax to GDP ratio (incl. SSC) in EU, US and Japan


The internationally high tax rates of EU in relation to overall GDP are the result of the upward trends in tax burden during the 1970´s, the 1980´s and the first half of the 1990`s. The rapidly increasing tax burden of those decades are to a large degree the result of an aggressive upping of the overall public sector share of the economy.

European taxes were raised alongside social contributions, and simultaneously increased government spending was implemented. The trend was particularly steady to the upside with regards to labour taxes, and the government spending was spread across a variety of areas, including old-age pensions, health care, access to education and other social benefits.

In most european countries a significant rise in unemployment between 1970 and the first half of the 1990`s were a major force behind the upwards pressure on taxes in general and income taxes in particular.

Category: Tax Trends

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