Those Gruelling U.S. Tax Rates: A Global Perspective

The Tax Foundation released its inaugural “International Tax Competitiveness Index” (ITCI) on September 15th, 2014. The United States was ranked an abysmal 32nd out of the 34 OECD member countries for the year 2014. (See accompanying Table 1.) The European welfare states such as Norway, Sweden and Denmark, with their large social welfare systems, still managed to have less burdensome tax systems on local businesses than the U.S. The U.S. is even ranked below Italy, the country that has had such a pervasive problem with tax evasion that the head of its Agency of Revenue (roughly equivalent to the Internal Revenue Service in the United States) recently joked that Italians don’t pay taxes because they were Catholic and hence were used to “gaining absolution.” In fact, according to the ranking, only France and Portugal have the dubious honor of operating less competitive tax systems than the United States. The ITCI measures “the extent to which a country’s tax system adheres to two important principles of tax policy: competitiveness and neutrality.” The competitiveness of a tax system can be measured by the overall tax rates faced by domestic businesses operating within the country. In the words of the Tax Foundation, when tax rates are too high, it “drives investment elsewhere, leading to slower economic growth.” Tax competitiveness is measured from 40 different variables across five different categories: consumption taxes, individual taxes, corporate income ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs