You know states like California, Washington, and Rhode Island are looking to take an ever-larger share of the income and wealth of their wealthiest residents to spend, but just how progressive can America’s taxation get? New research from the Fraser Institute suggests that taxes in the United States are already the most progressive among the Organization for Economic Cooperation and Development (OECD). The Tax Foundation’s Emily Kraschel reports:
The index uses five metrics to determine and compare tax structure progressivity across 45 jurisdictions covering 33 OECD countries (excluding Chile, Colombia, Costa Rica, Mexico, and Türkiye due to a lack of data):
- Marginal personal income tax rate range: the percentage point difference between the top and bottom marginal personal income tax (PIT) rates.
- Distance to the top tax bracket: the level of income, relative to the national average, at which the highest marginal income tax rate applies.
- Low-income tax protection: the size of the basic personal exemption relative to the national average income. In the United States, this measures the relative size of the federal and state standard deductions combined.
- Income tax share of tax revenue: the ratio of personal income tax revenue to total federal tax revenue. Income taxes tend to be the most progressive type of tax, so a higher share indicates greater progressivity.
- Consumption tax share of tax revenue: the ratio of consumption tax revenue to total federal tax revenue. Consumption taxes are generally considered regressive, as a consumption tax of the same amount is a smaller portion of a high-earner’s income than a low-earner’s income, so a higher share indicates less progressivity.
To account for variations in progressivity within countries where subnational authorities have significant taxation power, the index samples regions that reflect the range of local tax policies. In the United States, California and Texas represent the highest and lowest top state PIT rates, respectively, with Texas having no state-level PIT. PIT policy variables are calculated to reflect the combined national and subnational PIT structure (in the US, federal and state). For tax revenue variables, only national (federal) data are used due to data limitations.
The ranking by the Fraser Institute is as follows:
- California (United States, high-tax)
- Newfoundland & Labrador (Canada)
- Korea
- Texas (United States, low-tax)
- Austria
- Nova Scotia (Canada)
- New Brunswick (Canada)
- Prince Edward Island (Canada)
- Basel-Stadt (Switzerland, high-tax)
- Quebec (Canada)
- Ontario (Canada)
- British Columbia (Canada)
- Japan
- Valencia (Spain, high-tax)
- Manitoba (Canada)
- Alberta (Canada)
- Saskatchewan (Canada)
- Australia
- Germany
- Denmark
- France
- Netherlands
- Israel
- Poland
- Luxembourg
- United Kingdom
- Portugal
- Ireland
- Belgium
- Madrid (Spain, low-tax)
- Obwalden (Switzerland, low-tax)
- Greece
- Italy
- Iceland
- New Zealand
- Finland
- Norway
- Lithuania
- Czechia
- Slovenia
- Sweden
- Latvia
- Slovak Republic
- Estonia
- Hungary
Even America’s less-progressive states have more progressive taxation than most of the countries in the OECD. California already has the most progressive taxes, and wants to make them even more so.
Action Line: When your state’s politicians want to take from your bank account to pay for their own radical agendas, it may be time to look for a better America. Begin your search with Your Survival Guy’s 2026 Super States. And click here to subscribe to my free monthly Survive & Thrive letter.
