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US taxes among lowest in the world

Image: Drew Darmon and his wife Erika Darmon receive tax preparation assistance from a preparer
Several dozen protesters using a "mad hatter" theme counter-demonstrate against a tax day Tea Party rally of about a hundred protesters nearby Friday in Bellevue, Wash. Justin Sullivan / AP

Think you pay too much in taxes? It could be worse. You could be living in Denmark.

As you send your hard-earned cash off to the good folks at the Internal Revenue Service, a new report by the Organization for Economic Cooperation and Development may help take some of the sting out of writing that check.

The Paris-based group that tracks the economies of 34 nations found that the burden on U.S. taxpayers is just about the lowest in the developed world.

At first glance, America's top rate of 35 percent looks comparable to the rates paid by other developed countries. But that represents the top marginal rate; a typical married couple with two kids pays just 13.7 percent of total income in taxes (down from about 20 percent in 2000), according to the OECD.

That compares with 35 percent for a comparable household in Denmark. The average rate among the 34 developed countries that are OECD membersfor similar households was 26 percent. (All figures are for 2009.)

But our Danish family isn't done yet: that 35 percent rate applies only to income taxes. Like many European countries, Denmark also imposes a Value Added Tax — a kind of sales tax on a wide variety of goods and services. At 25 percent, Denmark's VAT is the highest in Europe.

Toss in additional taxes — like a wine tax of 70 cents a liter — and you're looking at the highest tax burden of the developed world.

So-called "sin taxes" are popular throughout the developed world, but Scandinavian countries seem especially prone to wine taxes: Swedes and Norwegians pay roughly $5 per liter on wine. Japanese smokers pay more than 60 cents in taxes per cigarette, according to OECD data.

All in, the tax burden in Demark consumes some 48 percent of that country's GDP. In the U.S., the burden is roughly half that, with 24 percent of GDP going toward taxes. That puts the U.S. on the low end of the tax burden among developed countries.

European governments have some of the highest tax burdens in the world: Swedes pay 46 percent of GDP in taxes; in France, 42 percent goes to the tax man and Germans pay 37 percent. Canadians (31 percent), Japanese (28 percent) and Australians (27 percent) also have a higher tax burden than Americans.

If you're looking for a lower tax burden, you might want to head south of the border. The only two OECD countries that devote a lower share of GDP to taxes than the United States are Chile (18.2 percent) and Mexico (17.5 percent).

On the other hand, if you really want to beat taxes, you'll need to figure out a way to become a citizen of one of the oil-rich Gulf states, according to figures from the Heritage Foundation.

The richest of them all, Saudi Arabia, levies taxes that consume just 6.6 percent of its GDP. Thanks to a steady supply of petrodollars to pay government expenses, taxes also make up single-digit shares of GDP in Iran (6.1 percent),  Nigeria (5.9 percent), Qatar (4.9 percent),  Bahrain (4.8 percent), Libya (3.4 percent), Oman (3 percent) and the United Arab Emirates (1.8 percent).

In  Kuwait, the tax burden is just 1.5 percent of GDP — which hardly seems worth spending the money needed to collect it.