Lesson Plan: US Tax Rates Compared to Other Countries

U.S. Tax Rate

M.I.T. Poli-Sci Professor Andrea Louise Campbell talked about how the United States is relatively under-taxed in comparison to other industrialized countries.


In this lesson students will view a series of video clips that examine overall tax burden in the United States and how it compares to other developed countries. Students will learn about which countries collect more and less in taxes than the United States as a percentage of GDP. Students will also consider that while many European countries have tax rates exceeded 40 percent of GDP, those countries generally provide more extensive government services than the United States does. Students will culminate the lesson with critical thinking activities to determine whether they believe taxes should be higher or lower in the United States and which, if any, tax payer funded programs should be expanded or reduced in size and scope.



    As a class or individually, view the following videos on how the United States tax rate compares to other industrialized countries.

    Students may use the note-taking chart on the handout below to answer questions related to the video clips in this lesson.

    Handout: US Taxes Compared to Other Countries (Google Doc)

  • VIDEO CLIP: U.S. Tax Rate Comparison (2:26)

    • How does the United States tax rate compare with other industrialized nations? Approximately what rate of G.D.P. is America's tax revenue?

    • How does our tax revenue effect spending on things like healthcare and infrastructure?
  • VIDEO CLIP: U.S. Income Taxes and Redistribution Comparison (2:24)

    • According to Ms. Campbell, how does the U.S. income tax rate perpetuate wealth and income inequality?

    • According to Ms. Campbell, how do other industrialized nations redistribute wealth through social assistance and universal programs?

    As a class or individually, view each of the following video clips about the U.S. tax code and how it compares with other nations. Answer the questions associated with each video clip.

  • VIDEO CLIP: Nations with the Lowest and Highest Taxes (2:31)

    • Which countries have no income tax for its citizens? What exception do they make for non-citizens?

    • Which countries have the highest tax rates? According to Mr. Reid, how do people in those countries feel about paying taxes?
  • VIDEO CLIP: Tax Codes Around the World (5:06)

    • In your own words define the term "broaden the base and lower the rate".

    • According to Mr. Reid how does New Zealand with its lower tax rate manage to generate more revenue per capita than the U.S.?

    • What is overall tax burden and how is it calculated?

    • What does the Caterpillar Corporation manufacture? Describe how signing over ownership of the Caterpillar Corporation's part-making system allowed the corporation to make more money.
  • VIDEO CLIP: President Trump on Corporate Tax Rates (2:14)

    • According to President Trump, how did the American business tax rate previously compare to other economic competitors?

    • What is the tax rate for large businesses in America?

    • What is the capped rate for small and medium sized businesses in America?
  • VIDEO CLIP: Comparing the US Tax System to other Countries (0:43)

    • Why does Ms. Corwin suggest it is difficult to compare the financial impact on individuals in America versus other countries without considering the full spectrum of the tax system?
  • VIDEO CLIP: Value Added Tax (1:19)

    • What is a value added tax? How does it effect the price of American made goods when they are exported overseas?

    Either as a class or as an individual written response, answer the following prompt:

    • In your opinion, should the United States raise or lower the income tax for middle class and wealthy Americans?

    • Should large businesses pay a higher or lower tax rate? What about small to medium sized business?

    • Do you believe America should add a value added tax to imported goods? Why?

    • Should America restructure how it spends tax dollars on social assistance programs, infrastructure, and health care? Which areas would you like to see more or less tax payer funded assistance?

    WRITE YOUR MEMBER OF CONGRESS: Have students write a letter to their member of Congress explaining their opinion on taxes as they relate to the 2017 Tax Reform Act and any changes they would support in the tax system.

    SIMULATED CONGRESSIONAL HEARING: Have students participate in a simulated hearing in which some students are members of a committee considering changes to the tax reform bill, with remaining students acting as experts on both sides of the issue.

Additional Resources


  • Corporate Income Tax
  • Gross Domestic Product
  • Income Tax
  • Middle Class
  • Revenue Per Capita
  • Tax Burden
  • Value Added Tax


Comparative GovernmentEconomics & Financial Literacy


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