It’s hard to find many people who really enjoy paying taxes, which is why almost any tax rate is going to feel like too much. Here in the United States, our top tax rates for 2017 (prior to the passage of the Tax Cuts and Jobs Act late last year) were 39.6 percent for individuals and 40 percent for the corporations.
But how do American tax rates stack up when compared to the rest of the world?
There are, in fact, at least 17 industrialized countries with lower top tax rates for both individual and corporate taxes, according to a recent GOBankingRates report.
The study looked at the tax rates in all 35 countries in the Organization for Economic Co-operation and Development (OECD), a collection of nations working together to collectively improve the economic outlook of their people. Then, comparing those rates to America’s top rates, the list was narrowed down to the 17 nations that boasted lower top brackets than the U.S.
Here are the 17 countries along with their respective highest rates:
|Country||Individual income tax rates||Corporate tax rates|
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The results include some predictable, and some less predictable, trends.
Western and northern Europe, for instance, don’t have any countries with both top rates coming in below American levels. That’s not really a surprise as those countries tend to be robust welfare states where both taxation and government spending as a percentage of GDP are at much higher levels than in the U.S.
Eastern Europe, though, appears to have a number of nations where the tax policy is clearly very different from their western neighbors, with multiple countries on this list coming from former members of the Eastern Bloc.
Another interesting trend: Despite top tax rates lower than those in the U.S., every country on this list — except Mexico — is still collecting more taxes as a portion of their total GDP than the U.S. That means countries like the U.S. and Mexico are collecting fewer taxes proportional to their economic output, indicating that these nations are probably collecting taxes from other sources than just their income and corporate taxes.
Methodology: All individual income and corporate tax rates assume the top marginal tax rate for 2017. All tax rates were sourced from KPMG.