The Organization for Economic Cooperation and Development says U.S. revenues as a share of GDP has recently fallen while the share of economic output taken by governments in developed economies as taxes has risen to its highest level since records began 50 years ago.
In the U.S., taxes as a share of gross domestic product fell in 2016 to below the level recorded in 2007, the year before the financial crisis hit and briefly reduced tax revenues for governments around the world, the Wall Street Journal cited the OECD as reporting.
According to the OECD, "the U.S. government—at national, state and local levels—raised the equivalent of 26.2% of GDP in taxes last year, placing it 31st out of the research body’s 35 members," WSJ.com reported. Only Turkey, Ireland, Chile and Mexico taxed less, the WSJ explained.
The OECD report comes as Senate Republican leaders plan a make-or-break floor vote on their bill as soon as Thursday -- a dramatic moment that will come only after a marathon debate that could go all night. Democrats are expected to try to delay or derail the measure, and the GOP must hold together at least 50 votes from its thin, 52-vote majority in order to prevail.
According to the Congressional Budget Office, the proposed changes will amount to 0.6% of GDP over the coming decade.
The OECD also warned that rising private debt loads in both advanced and developing economies pose a risk to growth as Canada, South Korea and the U.K. lead the world in household borrowing, Bloomberg reported.
“Household and corporate debt in many advanced and emerging market economies is high,” the Organization for Economic Cooperation and Development said Thursday in a pre-released section of a report to be presented next week.
“While higher indebtedness does not necessarily imply that problems are just around the corner, it does increase vulnerability to shocks”
With the global economy showing its most even expansion since the financial crisis, debt levels and credit quality are among the risks that could trigger a downturn. Consumer debt tops 100 percent of gross domestic product in Canada, with South Korea and Britain both above 80 percent.
On corporate borrowing, the OECD warned about a shift in risk from banks to the bond market and a “substantial” decrease in credit quality.
For his part, President Donald Trump will meet with Senate Republicans next week to discuss their party’s efforts to pass tax reform legislation, the chairman of the Senate Republican Policy Committee said on Friday, Reuters said.
If the bill clears the Senate -- a step that’s by no means guaranteed -- lawmakers in both chambers would have to hammer out a compromise between their differing bills, a process that presents potential pitfalls of its own. For now, though, much of the Senate’s attention will focus on its legislation’s price tag, Bloomberg reported.
Three GOP senators -- Bob Corker of Tennessee, Jeff Flake of Arizona and James Lankford of Oklahoma -- have cited concerns about how the measure would affect federal deficits. Independent studies of the legislation have found that -- contrary to its backers’ arguments -- its tax cuts won’t stimulate enough growth to pay for themselves. Both the Senate bill, and one that cleared the House earlier this month, would reduce federal revenue over a decade by roughly $1.4 trillion, according to the Joint Committee on Taxation.
(Newsmax wire services contributed to this report).
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