Countries with the Lowest Tax Rates

Customers bring questions and complaints about the tax system to the Tax Crisis Institute all the time. These questions can range from, “How can they take so much money from me?” to “How much do other countries tax their constituents?”

When you find yourself on the painful side of the IRS, it’s easy to give up on the system together, create a “tax-hate” Facebook status, and wish you were somewhere else. Surely other countries don’t tax their citizens nearly much as America does. Why does this country have to be so unfair?

These are many of the types of complaints you here from day-to-day, including us here at the Tax Crisis Institute. A researched look into tax rates around the world surprises a lot of Americans as to how good we have it. Take a look at the bottom three and see if you find anything surprising.

  1. The folks in Switzerland enjoy a 20% income tax rate on average. They also boast one of the highest GDP per capita in the world (ranked 7 in 2009). With such a good GDP, it also claims fame to have a 3% unemployment rate in 2009. Many countries would think this an impossible scenario. How can you tax so little, run a highly sophisticated lifestyle, and keep so many adults in their jobs?
  2. Surprisingly enough, the USA comes up close to Switzerland. Americans enjoy a 27% tax percentage of their income on average. This can seem a lot at times when you look how much is withdrawn from your paycheck every month. Americans also enjoy the highest income per hour of any nation. This country is thriving in the market place. The taxes are usually just hurting our desire to live a higher lifestyle than our paychecks will allow us. The taxes aren’t drowning out our livelihoods.
  3. Australia is also enjoying a 31.5% marginal tax rate on average. Unemployment has stayed pretty low compared to the rest of the world. Their strength comes from providing incentives for hard work, risk-taking, and entrepreneurship.

Considering that countries like Belgium, Finland, and Germany are taxing at 54%, 46% and 45% respectively, the U.S. has it good. When looking inward, the tax rate can seem unbearable at times. When reaching out to other countries though, the tax rate of the U.S. isn’t so bad after all. Maybe that will be of some comfort as we near the end of another tax season.
photo credit: kenteegardin via photopin cc

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