Europe v. US: Taxes v. GDP

We’ve got a European vacation in the works and by coincidence, the Marginal Revolution has a nice U.S. vs. Europe comparison thread running.

“Further, a recent study has shown that Germans and Americans spend the same amount of time working, but the proportion of taxable market time vs. nontaxable home work time is different. In other words, Germans work just as much, but more of their work is not captured in the taxable market.” – Edward Prescott


I’ve been wondering if increased transparency of tax spending would make higher rates ‘worth it’. This quote hints that the answer is no. Hmmmm.