While peripheral euro zone countries are being forced by their bond markets to raise taxes and cut spending in 2010, these same nations were some of the steepest tax-cutters among members of the Organisation for Economic Co-operation and Development (OECD) from 2007 to 2009.

OECD countries include the United States, Canada, Japan, a few Latin American countries, and many European countries.


During that period, OECD stated, Spain cut the most taxes, reducing tax revenues from 37.3 percent of GDP in 2007 to 30.7 percent of GDP in 2009. Currently, Spain is on the short-list of targets for future sovereign debt crisis because of its large budget deficit and high unemployment rate.


Iceland (which is not part of the European Union), the country that defied the international banking community and had arguably the worst financial crisis in the world, reduced tax revenues as percentage of GDP from 40.6 percent to 34.1 percent.


Greece and Ireland, the two recipients of bailouts in Europe, reduce their comparable figures by 3 to 4 percentage points from 2007 to 2009, OECD added.


Although tax rates in peripheral Europe remain much higher than those in Mexico (17.5 percent of GDP) and Chile (18.2 percent of GDP), their spending on social welfare is also much more generous, hence their large budget deficits and sovereign debt worries. 


The U.S., where tax revenues amounted to 24 percent of GDP in 2009, falls somewhere in between Latin America and peripheral Europe.