Professor Greg Mankiw of Harvard is generally conservative, but hasn't gained a reputation of being totally foolish, so I have to assume that his blog entry today was accidentally posted a day early.
The biggest problem with any analysis of taxation is that it is useless if the analysis doesn't also include avoided costs. It is further trivialized if there is no meaningful comparison. Mankiw decided to go with both:
For some purposes, a better statistic may be taxes per person, which we can compute using this piece of advanced mathematics:
Here are the results for some of the largest developed nations:
France .461 x 33,744 = 15,556
Germany .406 x 34,219 = 13,893
UK .390 x 35,165 = 13,714
US .282 x 46,443 = 13,097
Canada .334 x 38,290 = 12,789
Italy .426 x 29,290 = 12,478
Spain .373 x 29,527 = 11,014
Japan .274 x 32,817 = 8,992
The bottom line: The United States is indeed a low-tax country as judged by taxes as a percentage of GDP, but as judged by taxes per person, the United States is in the middle of the pack.
What's the point? What purposes would be better for this metric?
Let's add a few countries just to see how helpful this is:
China .170 x 6,500 = 1,105
Russia .369 x 15,600 = 5,756
Saudi Arabia .053 x 23,388 = 1,240
I suppose it is possible that there are times when such analysis is useful, but it is necessary to explain those limitations at the time you present it. Even a blog post should not be another candidate for inclusion in How to Lie with Statistics, Second Edition.
What else makes these comparisons silly? One is that Mankiw and any number of other writers about political economy is that they ignore Milton Friedman's dictum that spending is taxation. If a country supposedly has a 25% tax rate but routinely runs a 5% deficit, that tax rate is misleading. Another, if a country owns its own natural resources and hires the management out because it expropriated them decades ago, the taxes will look a lot lower than if they just tax the companies that are taking out the natural resources. The actual economic consequences may be identical, but the "oh-my-god-scary" tax portion can change radically. Simplistic comparative analysis is almost invariably misleading. Mankiw did everyone a disservice today.