Very interesting study (pdf) prepared by the Swedish think-tank Timbro. Some of the conclusions:

- if we assume the American economy to be at complete standstill in terms of GDP growth there is only one country from EU that would be able to catch up with the USA - Ireland. Five years' growth in the other European countries will still not suffice to catch up with a wholly stagnant American economy.

- many European countries have lower per capita GDP than the majority of states in the USA

- retail consumption in the USA is higher

- high incomes coupled with low taxes mean high private consumption in the USA

- the tax wedge can be termed very high in at least nine European countries. At most, in a group of at least nine countries the seller of a sevice is allowed to retain 25% of the income generated by the purchaser of the service. There are several countries where the tax wedge exceeds 80 per cent. A taxation system like this naturally results in resources in the economy being wrongly used.

- in USA, even with all taxes and charges included, the seller of a service retains nearly 50% of the total original income from the buyer. Thus not only does the USA have a lower general tax burden, its tax wedges are also appreciably lower.

- poor development in Europe is connected not so much with bad economics as with Europeans themselves opting to work less. Viewed in this light, Europe's lower level of material prosperity results from its own choice to have more leisure.

(via Fredrik)

UPDATE: More on the topic on the grounds of the same study over at Me-Fi.