President Donald Trump announced on Twitter that he would be visiting North Dakota Wednesday to address his plans on tax reform, adding that if they are enacted the United States will no longer be the “highest taxed nation in the world.”
As is often the case, Trump’s hyperbolic language requires fact-checking. A recent report by the Tax Policy Center underscores that U.S. taxes are “low relative to those in developed countries.” In 2014, U.S. taxes across all government levels “represented 26 percent of GDP,” while 34 percent of GDP is the average for the 34 member countries of the Organization for Economic Co-Operation and Development (OECD). Only three OECD countries—South Korea, Chile and Mexico—collected less tax money than the U.S.
According to the World Bank’s most recent data, the U.S.’s tax revenue represented 11.27 percent of its GDP in 2016, compared to 11.41 percent in 2015 and 10.57 percent in 2013. Countries such as Malawi and Samoa saw a tax revenue of 15.6 percent and 24.2 percent of their GDPs in 2016, respectively. Furthermore, another report from the Federal Reserve Bank of Chicago found that the “U.S. is a relatively lightly taxed country, with an average tax burden that is lower than Germany’s by more than 10% of GDP.” It is true that the GOP tax proposal would actually lower the U.S.’s corporate tax burden, putting it in line with those of other OECD nations.
Regardless of his inaccuracy on the subject, Trump has often used his tax plan rationale as part of his presidential campaign’s talking points. According to Politifact, then-GOP presidential candidate Trump told Meet the Press host Chuck Todd in a May 2016 interview that his campaign blueprint included a big tax cut to business because “we’re the highest taxed nation in the world. Our businesses pay more taxes than any business in the world.” Most recently, President Trump repeated the same claim during a rally in Youngstown, Ohio, in June.
It is important to note, however, that the U.S. has the highest corporate income tax rate in the developed world, as it currently stands at 39%, according to a 2016 report by the Tax Foundation. If taken at a larger scope, the U.S has the world’s third largest corporate income tax rate, trailing only those of the United Arab Emirates and Puerto Rico.
So, one question looms large: Why does Trump keep harping on an already debunked claim? The answer may be found in the idea that Trump wants his base to see the proposed tax overhaul as a populist and not a globalist one, as NBC News reported Tuesday.