Is the U.S. the Highest Taxed Nation in the World? | Committee for a Responsible Federal Budget (2024)

FAQs

Is the U.S. the Highest Taxed Nation in the World? | Committee for a Responsible Federal Budget? ›

The United States is a low-tax country

1. Ivory Coast. The country with beach resorts, rainforests, and a French-colonial legacy levies a massive 60% personal income tax – the highest in the world.

The United States ranked 31st¹ out of 38 OECD countries in terms of the tax-to-GDP ratio in 2022. In 2022, the United States had a tax-to-GDP ratio of 27.7% compared with the OECD average of 34.0%. In 2021, the United States was ranked 32nd out of the 38 OECD countries in terms of the tax-to-GDP ratio.

California has the highest individual income tax burden, while seven states (including Texas, Florida, and Washington) have the lowest. Washington has the highest sales and excise tax burden, while New Hampshire has the lowest. Red states have a lower tax burden than blue states, on average.

The top 10%, with incomes of at least $169,800, pay about three-quarters of the nation's tax bill, the analysis found. Although most Americans believe the middle class bears the heaviest tax burden, it's actually the top 1% who pay the highest federal tax rate, at 25.9%, the Tax Foundation analysis found.

While the tax burden varies quite widely between both US states and Canadian provinces, in general, the US has significantly lower taxes overall than Canada does, albeit at the expense of less generous social welfare benefits - most glaringly being the (IMHO) embarrassing lack of a universal healthcare system.

In India, individuals and businesses pay direct taxes based on income. Top taxpayers include companies like RIL, SBI, and HDFC Bank. Mahendra Singh Dhoni was the highest individual taxpayer in 2023, while Akshay Kumar held the title in 2022 and 2021.

Taxes. Taxes are higher in Europe and include a value-added tax (VAT) that can range as high as 27%. 6 This sales tax is refundable for American tourists if they obtain and complete VAT refund paperwork and do not use the goods before returning to the United States.

France generally has higher tax rates than the U.S. for each type of tax, including income tax, capital gains tax, gift tax, inheritance tax, and wealth tax.

Again according to the OECD, the country with the highest national income tax rate is the Netherlands at 52 percent, more than 12 percentage points higher than the U.S. top federal individual income rate of 39.6 percent.

What is the most tax-friendly state to live in? ›

Unsurprisingly, the states with no state income taxes at all ended up scoring pretty highly. Those eight states are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Eight U.S. states currently have no state income tax whatsoever: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. New Hampshire, the ninth state on our list, only taxes interest and dividend income.

Looking at longer-term trends, Switzerland has always stood out as an exception, with tax revenues from individual net wealth taxes which have been consistently higher than in other countries (Figures 1.4 and 1.5).

Tax revenue, percent of GDP, 2021:

The average for 2021 based on 105 countries was 17.48 percent. The highest value was in Denmark: 34.81 percent and the lowest value was in the United Arab Emirates: 0.54 percent. The indicator is available from 1972 to 2022. Below is a chart for all countries where data are available.

Among the countries with the lowest tax rates in the world are Malta, Cyprus, Andorra, Montenegro and Singapore. Aside from zero income tax, in Antigua and Barbuda, individuals are also free from paying taxes on wealth, capital gains, and inheritance.

The countries with the highest corporate tax rates in the world are Comoros (50 percent), Puerto Rico (37.5 percent), and Suriname (36 percent), while the countries with the lowest corporate rates are Barbados (5.5 percent), Turkmenistan (8 percent), and Hungary (9 percent).