US taxes on wages, employers were near average before GOP tax law: OECD

American workers pay an average amount of taxes when compared to other advanced economies, as do their employers, according to a new report from the Organisation for Economic Co-operation and Development (OECD).

The study was based on data from 2017, before the new Republican tax law went into effect.

On income tax alone, a married American family with two children making an average salary paid 6.5 percent of their wages to tax, below the 10.2 percent average for the OECD, a club of 35 advanced economies.

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A single American making an average salary paid 18.4 percent of their wages to the government, slightly above the 15.7 percent OECD average and well below the high of 36.1 percent paid in Denmark.

But the study also examined how labor costs fall on employers. In the U.S., employers had to pay out 7.7 percent of wages for employees making an average wage, compared to 9.8 percent in the OECD. 

The study also looked at what’s called a “tax wedge,” the overall difference between employees’ take home pay and the labor cost to the employers. The wedge consists of income taxes and payroll tax contributions from both the employer and the employee.

There, the United States fell just below average, with a tax wedge of 30.9 percent, meaning 30.9 percent of its labor costs did not go directly toward employee pay. The OECD average was 35.9 percent.