One Year In: A Look at Saving Rates During the Pandemic
While working hours were reduced across the globe and many lost their jobs entirely, personal saving rates actually increased throughout the pandemic in many countries.
A personal saving rate is calculated as the ratio of personal saving to disposable personal income. Here’s a look at the U.S.’ personal saving rate over 2020.
|Date||U.S. Savings Rate|
The U.S.’ personal saving rate skyrocketed in April to more than 30%. After a dip near the end of 2020, the rate has jumped back up again to around 20% in January 2021.
With the most recent data from September 2020, many European countries’ savings rates were up, as well—the highest rate occurred in the Netherlands at 24%. Japan and the UK followed a similar trend as well, at 22% and 28% respectively.
The Pandemic Piggy Bank
Personal saving rates tend to increase during recessions and, more generally, either increase because of reduced consumption or a boost in income.
Without the same access to restaurants, shopping, and travel, it is somewhat unsurprising that a trend of increased saving rates occurred.
In the U.S., many have been putting a larger share of their disposable income into their savings as a precautionary measure. Additionally, while income has likely not increased in most cases, stimulus payments from the government have become much more widespread.
Overall, the typical saving rates have not changed; what has driven up the country’s rates has been prudence and government checks. Whether or not this will influence future consumption or will continue a trend of increasingly large nest eggs, however, has yet to be determined.
The U.S. will likely see an increased inflow of government support, as Joe Biden’s $1.9 trillion stimulus package has recently passed in Congress.
» Want to learn more? Check out our COVID-19 information hub to help put the past year into perspective
Tax-to-GDP Ratio: Comparing Tax Systems Around the World
Using the tax-to-GDP ratio, we compare the tax systems of 35 OECD countries. See which nations have the highest and lowest rates.
Tax-to-GDP Ratio: Comparing Tax Systems Around the World
Taxes are an important source of revenue for most countries. In fact, taxes provide around 50% or more of government funds in almost every country in the world.
How does each country’s tax system compare to one another? This question is tricky to answer. Since countries’ populations and economies differ greatly, measuring total tax revenue is not the best way to compare international tax systems.
Instead, using a tax-to-GDP ratio is one of the more useful ways to compare tax systems around the world.
What is the Tax-to-GDP Ratio?
The tax-to-GDP ratio compares a country’s tax revenue to the size of its economy, which in this case is measured by its GDP.
The higher the ratio, the higher the proportion of money that goes to government coffers. If managed effectively, this can support the long-term health and prosperity of an economy. According to research conducted by the International Monetary Fund, countries should have a tax-to-GDP ratio of at least 12% in order to experience accelerated economic growth.
The countries that are part of the Organisation for Economic Co-operation and Development (OECD) all meet that threshold, with an average tax-to-GDP ratio of 33.8%.
Ranked: The Tax-to-GDP Ratios of OECD countries
The dataset used for this graphic looks at 35 of the 37 OECD countries, since recent data for Australia and Japan was not available.
|Rank||Country||Tax Revenue as % of GDP|
|17||🇨🇿 Czech Republic||34.9%|
|19||🇸🇰 Slovak Republic||34.7%|
|23||🇬🇧 United Kingdom||33.0%|
|24||🇳🇿 New Zealand||32.3%|
|29||🇰🇷 South Korea||27.4%|
|30||🇺🇸 United States||24.5%|
At 46.3%, Denmark has the highest ratio on the list. The country puts its relatively high tax revenue to use, particularly when it comes to subsidizing post-secondary education—in Denmark, university is free for all EU citizens.
On the less-taxed end of the spectrum, the U.S. ranks 30 out of 35, with a ratio of 24.5%—that’s notably lower than the OECD average of 33.8%. It’s also worth mentioning that the U.S. has one of the highest GDP per capita measures out of all OECD countries.
Where does America’s tax revenue come from? It gains most of its revenue from the personal income tax. In fact, 41% of the country’s total tax revenue comes from taxes on personal income, as well as individual profits and gains—for context, the OECD average is 24%.
With President Biden’s recent announcement to increase corporate taxes and personal investment gains, America’s ratio could look a lot different in the near future.
>>Like this? You might find this article interesting, Unequal State Tax Burdens Across America
1.6 Billion Disposable Masks Entered Our Oceans in 2020
1.6 billion face masks entered our oceans in 2020, representing 5,500 tons of plastic pollution.
Demand for Disposable Masks Skyrockets in 2020
Following the World Health Organization’s formal declaration of the COVID-19 pandemic, governments around the world quickly mandated the use of face masks in public spaces.
This led to a massive demand shock, prompting factories to begin producing disposable masks at full capacity. The majority of these masks were produced in China, and in April 2020, the country reported a staggering daily production figure of 450 million masks.
Plastic Pollution: A Lesser Known Side Effect
In Ocean Asia’s 2020 report, Masks on the Beach, researchers developed a formula to provide reasonable estimates for the number of disposable masks entering the environment.
Given an annual production figure of 52 billion disposable masks and a loss rate of 3% (the percentage of masks that escape water management systems), the team concluded that nearly 1.6 billion face masks wound up in our oceans in 2020. This amounts to approximately 5,500 tons of plastic pollution.
These masks are commonly made of polypropylene, which easily breaks up into microplastics. While the effects of microplastics on human health are not yet determined, these fragments are incredibly common in our water supply—for example, 94% of U.S. tap water is deemed to be contaminated.
Disposable Doesn’t Mean They’re Gone
Despite their single-use nature, disposable masks are expected to take more than four centuries to decompose while in the ocean. Here’s how this compares to other items we use on a day-to-day basis.
|Item||Years Needed to Biodegrade|
|Plastic grocery bag||20|
The pandemic has extended well into 2021, and the number of disposable masks polluting our oceans is likely to continue growing.
With this in mind, various companies and organizations are beginning to search for a solution. One noteworthy example is Plaxtil, which is developing a method for recycling surgical masks so that the raw materials can be used for other products.
»Like this? Then you might enjoy this infographic on the flow of plastic waste.
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