Idea: How governments raise revenue—progressive income taxes, broad consumption taxes, and overall tax levels—shapes how much inequality is reduced and how well public services are funded. The snapshot below compares several OECD countries on tax design and outcomes.
| Country | Tax-to-GDP (2023) | Top personal income tax rate (marginal) | VAT/GST (standard) | Redistribution strength* | Happiness rank (2025) |
|---|---|---|---|---|---|
| France | 43.8% | 55.4% | 20% | High | ~21–25 |
| Denmark | 43.4% | 55.9% | 25% | High | 2 |
| Sweden | 41.4% | ~52% | 25% | High | 4 |
| Germany | 38.1% | 45% | 19% | High–Mid | ~20–25 |
| Canada | 34.8% | ≈54% (max combined) | 5% GST (+prov.) | Mid | ~12–18 |
| New Zealand | 34.0% | 39% | 15% | Mid-Low | Upper-mid |
| Estonia | 33.5% | 22% (flat) | 22% | Lower | Mid |
| United States | 25.2% | 37% (federal) | — | Mid-Low | 24 |
| Chile | 20.6% | 40% | 19% | Low | Mid-low |
| Mexico | 17.7% | 35% | 16% | Low | Top-10 |
Countries that pair higher overall revenues with progressive income taxation and broad consumption taxes that fund universal benefits tend to deliver larger reductions in inequality and higher reported well-being. Lower-revenue or flatter systems generally redistribute less. Tax design isn’t the only driver, but it’s a powerful lever for fairness and quality of life.