12 Countries With The Highest & Lowest Tax Rates
Seemingly everyone has an opinion about taxes. As one of the largest economic and political issues of any country, the subject of how high taxes are (and upon which segment of society they predominantly fall) can be counted on to engender heated debates among politicians, academics, and ordinary citizens. However, beneath all the heated rhetoric and opinions are hard facts and numbers. Certain tax rates in certain countries correlate with certain outcomes, regardless of whether these are acknowledged by various strains of financial opinion. Today, Business Pundit takes an honest look at twelve countries – six with the highest tax rates, and six with the lowest – and examines other facets of those economies with an eye toward possible correlations. Naturally, there are several different ways to assess the income tax burden a nation imposes – the lowest rate of income tax in a country, the highest rate, income tax on corporations, and the like. Depending on who is being taxed (say, someone making $10,000 per year vs. someone making $100,000), a nation’s income tax structure can look very different. For the sake of using one uniform measure, our article uses marginal income taxes on average income workers in a given country.
The Highest Tax Rates
As will be seen throughout this article, most of the world’s highest tax rates can be found in western European nations. Belgium tops the list, with a marginal tax rate that goes as high as 54%. Despite such a high tax rate, Belgium ranks relatively highly on various economic measures. NationMaster.com, for instance, reports that Belgium’s $392 billion GDP ranks 18th out of 203 countries, and exports over $322 billion worth of goods and services yearly. However, other statistics show Belgium’s high tax rate coming back to haunt it. The International Monetary fund ranks Belgium 18th on its list of Gross Domestic Product based on purchasing power parity, at $36,416. It is also noted that Belgium was “likely to have negative growth, growing unemployment, and a 3% budget deficit.” Canada’s Trade Commissioner Service similarly reported “a slowdown of the activity in all sectors” during the last two quarters of 2008. In sum, it seems that Belgium’s high tax rates stifle economic vitality to some extent, despite the social safety net it provides.