The Cost of High Taxes
By Arnold Kling
In 1960, hours of work were actually higher in Germany, France, and Belgium than they were in Canada, the United States, and Australia. That is, 50 years ago the relative work levels of these countries were reversed. This evidence seems inconsistent with the view that Europeans work less because they either value leisure more or do not care so much about consumption.
Read the whole thing. What we call a European welfare state would perhaps be better termed a welfare-reducing state. People get driven out of market activities and into home production. If the U.S. had higher tax rates, we might not end up with any higher revenues. Instead, we would spend more time mowing our own lawns, cooking our own meals, doing our own household repairs, and so on.