Our Tax System beat out France! And lost to everyone else. . .

How many people woke up this morning thinking, “where does the United States’ tax system rank with other OECD countries?” For me, it was the second thought of the day, right after, “where did my dog decide to poop during the night.”

Fortunately, there’s an answer to that (the tax ranking. There’s an answer to the poop one, too, but we’ll pass on that for now). The think tank Tax Foundation just released the OECD countries tax ranking in a riveting new report that pushed me to the edge of my seat even more than the latest novel I picked up from the library (1Q84, if you’re wondering, which has meandered through 300 pages so far).

Before anyone gets too carried away in suspense, the US comes in at number 32. Out of 34. Not exactly our typical gold medal performance. But if you were lock our tax system in cage match with Portugal’s and France’s, our system would come out on top.

I don’t want to get too much into the details of the report, but the summary of the situation is that we have a terrible corporate tax system (ranked 33rd), an abysmal international tax system (ranked 34th), a poor individual tax system (ranked 26th) and a pretty great consumption tax system (we’re number 4!). But since many economists believe that income taxes are more damaging to an economy than a consumption tax, our high consumption tax ranking does little to push us upward.

Now, even though I’m a tax man who lives and breathes taxes (when I’m not breathing in the acrid odor from my dog’s lack of bladder control), I know taxes aren’t everything. And this list proves as much. When you hear about tax inversion, the popular narrative is that companies are fleeing the US to entrenched themselves in an overseas tax haven. Yet the countries these companies choose aren’t that high on the tax ranking.

For example, Walgreens tried to run to the United Kingdom, and Burger King has plans to move to Canada, which are 21st and 24th on the tax ranking, respectively. Estonia comes in at number one, yet I haven’t heard of any companies running over there. Meaning the moral of this story is not that we need to have the best tax system in the world, just one that’s better than Canada.

Over the coming days, I’m sure many will wax eloquent of the flaws in the tax ranking, painting Tax Foundation as some conservative lap dog. While the Tax Foundation might lean to the right, there’s plenty of other painfully clear indicators that our tax system needs reform. Which is, as I’ve pointed out before, a point that both sides of the political spectrum agree on. It’s just the “how” that no one can figure out.

And until they do, we’re number 32.

Expect the prevailing political response to be a bit like Catherine Tate, using whatever the American version of “am I bovvered” would be:

Oh, wait, we’re competing with France for the bottom. So here we go: