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July 05, 2005

Total Tax Takes.

EU Rota has another one of his informative little charts up. Total tax takes in the EU 25. Now, if we cross match that with growth rates I wonder what we’ll see.....

John B provides a graph of that and EU Rota a table. Slightly different conclusions:

John B:

Not terribly conclusive, although going for a tax rate much above 45% seems like a marginally worse strategy than going for one much below it.


The average rate of government consumption of GDP (ie. taxation) for the EU-25 is 44.37%. Those countries below this average had average GDP growth of 3.79% per year. Above this rate nations turned in an average GDP growth of 1.87% per year. On the spending side, the average rate of government expenditure as a percent of GDP for the EU-25, 46.16%. Those countries below this averaged 4.19% GDP growth per year. Those above this expenditure level averaged 2.13% GDP growth per year.

July 5, 2005 in Taxes | Permalink


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Always happy to oblige (although not convinced it shows anything terribly conclusive...)

Posted by: john b | Jul 5, 2005 10:02:38 AM

Well I'm convinced that a total tax extort of significantly less than currently would make me a lot better off.

Even if we couldn't reward as many chavs with burberry as a result.

Posted by: Rob Read | Jul 5, 2005 4:30:42 PM

What EU Rota doesn't say, though, is that the largest growth rates of all were experienced by those clustering around 45% (roughly his average). Lower growth was achieved by both those significantly lower and those significantly higher. As John says, it's pretty difficult to claim anything from this, but especially not that smaller government means better growth. I'm not sure you (or I) would be terribly happy for government to consume 45% of GDP, anyway.

Posted by: Jarndyce | Jul 5, 2005 4:56:39 PM

That is why I called it a general comparison and to make of it what you will.

11 out of the 13 countries (85%) below the 45% mark had GDP growth over 2%

5 out of 12 (42%) countries above the 45% mark had GDP growth over 2%

Again, make of it what you will. Just another bit in the economic mix. I think it shows more than you let on.

Posted by: George Adair | Jul 6, 2005 3:55:49 AM