World’s Lowest and Highest Income Tax Percentages
Taxes have and continue to be a sore subject amongst Americans. They received a reception in the form
of a nice little tea party in the 1700s and have been held in contempt ever since.
Everywhere you look, you can find people sweating and worrying about how much money they lose to
income taxes every month. You’d be interested to know that where income taxes are considered,
America stands in the moderate percentage level compared with much of the world though.
The U.S. stands neither at the most expensive tax system, nor the least expensive. Those rankings
belong to the following six countries.
At one of the most expensive levels, Belgium
holds a pretty good lead. Citizens of Belgium
are taxed at a marginal rate of 54.9%.
According to an article from Forbes.com*,
this high tax rate is due to a high level of
unemployment and a poor economy. It’s all
they can do to get the money they need to
perform their work.
Can you imagine running into tax problems there? Is there enough wage levy help to get you out of a
Finland shows up next with a 46.6% marginal rate on their taxes. Finland doesn’t claim high taxes
because of a poor economy or high unemployment.
In fact, both are doing well in the grand scheme of things. The economy thrives while the
unemployment level stays low.
Germany sits in a similar situation at a 45% marginal tax rate. Its economy still ranks high amongst
European nations, despite the high tax rate.
It’s difficult to pinpoint one cause for such higher tax rates. For Germany at least it could be to afford
social benefits, but any number of factors fits into their story.
In contrast, the marginal tax rate for much of the middle class earning $35,000-$80,000 a year (more if
you have a family) is 25%. The percentage rises with your income.
It climaxes at a max of 39.6% (if you earn more than $400,000 a year), and bottoms out at 10% when
you earn under $10,000 or so a year. For more specific numbers, you’ll need to check the most recent
marginal tax rates from the IRS.
Considering that things could be much worse, 25% doesn’t seem as bad as it used to anymore. To see
the other extreme though, check out three of the cheapest tax percentages around the world.
The tiny country of Timor-Leste close to Indonesia holds a total tax rate of around 0.2%, if you can
imagine that. That’s pretty nice right?
You give up the strength of government plus the protection of a large nation to live here, but you sure
get to keep a large amount of your income. It’s something to gawk over.
What are the chances you’d need help with a wage levy? They have to be slim to none as you’d likely
never have to worry about one.
Vanuatu is a string of small islands located to the east of
Australia that taxes their people a mere 8.4% annually.
That’s pretty affordable right?
Last up is Maldives, another sting of islands located in the
middle of the Indian Ocean. These people sit at just 9.3%
on their taxes.
So you could have it worse, but you could also have it a
lot better. There’s a benefit of being right in the middle though.
You get the benefits of a helpful government while not suffering under the burdens of extreme taxes. It
may not always seem ideal, since you may need the occasional wage levy help if you fall behind.
It is a great country to be a part of though, even if you do need help with a wage levy every now and
then. And that’s something to remember every tax season.