International Tax Rates

Greg Mankiw has a post today on marginal tax rates for select countries. The disparity in tax rates is very interesting to me. These are estimates from Ed Prescott (at the Fed) for the 1990s

Italy .64
Germany .59
France .59
Canada .52
United Kingdom .44
United States .40
Japan .37

What's amazing to me, is that Italy's marginal tax rate is 27 percentage points higher than Japan, but Italy actually great at a faster rate than Japan during the 1990s. Japan grew at an average rate of 1.609 and Italy grew at an average rate of 1.636 (data from the IMF)

Republicans like to talk about the importance of tax cuts for economic growth, but the relationship is dubious in the long term. Tax rates are important, but they cannot explain the large differences in growth rates across countries.