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Trump keeps making a misleading claim that the US is the 'highest taxed nation in the world'

Bob Bryan

On Tuesday, President Donald Trump once again claimed that the US is the "highest taxed" nation in the world.

"I will say that we're the highest-taxed nation in the world. People want to see massive tax cuts. I'm giving the largest tax cuts in the history of this country. In addition to that, there will be reform," he said during an Oval Office meeting with former Secretary of State Henry Kissinger.


Trump's claim, which he repeatedly made along the campaign trail, is misleading.

Trump is right that the US's 35% statutory corporate tax rate, or what the government has on the books as the business tax rate, is the highest among the 35 major developed economies that are part of the Organization for Economic Cooperation and Development. Trump's plan to cut it to 15% would tie the US for the fourth lowest.

OECD corporate taxes

(Andy Kiersz/Business Insider)

But other data shows that the situation is a bit more complex.

According to a report from the nonpartisan Congressional Budget Office, when taking out various deductions and tax breaks for corporations, the US ranked fourth among G-20 countries in effective corporate tax rates — what countries actually pay.

Screen Shot 2017 09 06 at 8.36.31 AM


Meanwhile, the US's all-in personal income tax rate for a single person at the average wage with no children is 16th among OECD countries, at 26%. If a couple has two children, that drops to 25th.

Even looking at the top marginal tax rate for the highest-income earners, the US ranks in the middle of the pack among OECD countries, with the 18th-highest marginal statutory rate.

But the most comprehensive measure by which to judge Trump's claim, combining corporate and individual taxes paid, is tax burden as a percentage of gross domestic product. It compares how much money in a country is put toward taxes with the economic output of the country.

By this measure, the US has the fourth-lowest tax burden of any OECD country, with only South Korea, Chile, and Mexico ranking lower.

oecd tax burdens

(Tax Policy Center)

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