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How the overall weight of taxes in Canada compares with that in other countries is a question that frequently arises in tax policy discussions. Aggregate tax burdens—that is, taxes of all sorts as a proportion of gross domestic product (GDP)—vary considerably from country to country. (GDP may be defined as the sum of compensation paid to labour and investment income paid to resident and non-resident owners of capital.) In general, countries with highly developed social support services have high ratios of taxes to GDP, because they must levy taxes to pay for these services. Poor and developing countries have low ratios, since average incomes are low and administrative systems are underdeveloped, making it difficult to raise substantial tax revenue. However, some of the variation in tax burdens among countries also reflects national choices. The simple ratio of taxes to GDP does not tell the whole story, and does not necessarily reveal which country has high tax burdens. One country may choose to pay for the health, welfare, and pension costs for its citizens through state programs and to impose taxes to cover the costs. Another country may ask citizens to pay for most of these costs themselves and have lower tax rates as a consequence. There are differences in these approaches: the citizens of the second country have far more flexibility in “purchasing” social benefits, and the distribution of the burden of these costs by income level probably differs substantially. However, the net difference in tax burdens (that is, tax as a percentage of GDP) for the two countries does not recognize the differences in state-provided