Tax cuts exposed as myth

The perception of a widespread tax-cutting trend amongst the world's richest economies is overturned by figures which show that the tax burden has climbed steadily in almost all cases since 1980. The exceptions have been the Netherlands, where it has declined, and the UK and Germany, where the share of national output taken by taxes has been flat.

Preliminary estimates collected by the Organisation for Economic Co-operation and Development show that 10 of its 24 member countries did reduce the ratio of taxes to gross domestic product last year.

But there had been more tax-cutting in 1995, with 14 countries (although not the UK) achieving a reduction.

The figures show that the tax take in the UK is in the bottom half of the range. New OECD members Mexico and Korea had the lowest ratios in 1996, at 16 and 23.2 per cent of GDP respectively, although the US and Japan are not much further ahead. By contrast, the Danish and Swedish governments take 51.9 per cent of GDP in tax, with Belgium and France not far behind. Britain occupied a mid-Atlantic ranking of just over 35 per cent.