OECD Tax Burden Hits a Record 34.1% of GDP While the US Stays at 25.6%, and Pillar Two Carves Out US Companies

Taxes across the OECD reached their highest level on record in 2024. The average tax-to-GDP ratio rose 0.3 percentage points to 34.1%, according to the OECD’s Revenue Statistics 2025, published in December. It went up in 22 of 36 countries with data, fell in 13 and didn’t move in one.

Denmark had the highest ratio at 45.2%. Mexico had the lowest at 18.3%. The United States came in at 25.6%, unchanged from 2023 and down from 28.0% in 2022. That’s about 8.5 points below the OECD average.

The gap has widened over time. In 1965 the US ratio was 23.6% and the OECD average 24.9%, close together. By 2000 the US was at 28.3% against 32.9%. Now it’s 25.6% against 34.1%. Most rich democracies have grown their tax take over sixty years. The US mostly hasn’t.

What drove the rise

Labour taxes. Social security contributions and personal income tax are now the two biggest sources of revenue across the OECD, about a quarter each. As wages grew in 2024, so did what governments collected from them.

The headline ratio says less than it seems about who pays. A country with a public health system collects taxes to pay for it. The US pays for much of its health care through private insurance premiums, which don’t count as tax. Comparisons of tax burdens are partly comparisons of what each government chooses to provide.

Pillar Two: a global tax with an American exception

The other big tax story of the past year is about companies. Pillar Two, the OECD’s global minimum tax, sets a 15% floor on the profits of large multinationals. Countries that sign up can top up tax on profits taxed below that rate elsewhere.

Washington never adopted it, and in 2025 it pushed back. In June 2025 the G7 agreed a “side-by-side” system: groups headquartered in the US would be exempt from the two rules that let other countries tax their foreign profits, while countries could still apply their own domestic minimum tax. In return, Congress dropped a proposed retaliatory tax provision, Section 899, from the budget bill. Canada scrapped its digital services tax the same day.

On 5 January 2026 the OECD’s Inclusive Framework, 147 jurisdictions, adopted the package. It includes a side-by-side safe harbour for fiscal years from 2026, a permanent simplified safe harbour, an extended transitional safe harbour and a new safe harbour for substance-based tax incentives. A domestic minimum tax is confirmed as the main mechanism, with a review by 2029. The US is the only jurisdiction listed as eligible for side-by-side treatment. On 13 January the European Commission confirmed all EU member states had agreed to the new safe harbours.

Now it’s national law

Through 2026 countries have been writing the deal into their own laws. Britain published draft legislation in July. Luxembourg tabled a bill the same month. The Netherlands brought a bill in September, and Singapore’s parliament passed its amendments on 6 October. Some countries, including France, Turkey and Belgium, pushed back filing deadlines for the first returns.

What it means

The two stories meet in one place. Most OECD countries are collecting more tax, mostly from workers, while the attempt to tax mobile corporate profits more evenly has ended with a large exception for the biggest economy’s companies.

From Washington’s side, the deal protects the US tax base and its own minimum tax rules from foreign top-up taxes. From Europe’s, it keeps the global minimum tax alive at the cost of exempting American groups from part of it. Both readings are accurate. The 2029 review is where the bargain gets tested.