Tomorrow's D-Day for tax filers across the United Sates. While its easy to bemoan your tax rate, especially if you owe money to Uncle Sam, the United States actually has a relatively low personal tax rate compared with other countries. 

Last October, accounting firm KPMG put together a study of the countries with the world's highest tax rates on personal income. Not surprisingly, Europe was among the most-taxed regions. Western Europe led all world regions with  a 46.1% tax rate on personal incomes. By contrast, North America stood at 27.7%. 

Also, while the top income-tax bracket for America is jumping to 39.6% this year, it stands neck-and-neck with Spain for having the world's highest income level where the highest rate of taxes takes effect. 


Clearly, taxes are a matter of significant controversy. Not only do tax codes and deductions vary wildly by country, but the services a citizen receives for his or her tax dollars also differ. Services are difficult to measure in an objective manner, but KPMG tried looking beyond purely top tax rates by measuring effective taxes for people who earn both $100,000 and $300,000 per year. 

Let's look which countries' citizens had the highest tax burden in 2012, and how they compare with the United States. 

1. Belgium

  • 2012 top rate of income taxes: 50%
  • Effective tax rate on $100,000: 47% (13.1% Social Security, 33.9% income tax)
  • World rank on effective tax rate of $100,000: 1
  • Effective tax rate on $300,000: 53.4% (13.1% Social Security, 40.3% income tax)
  • World rank on effective tax rate of $300,000: 2

2. Italy 

  • 2012 top rate of income taxes: 43%
  • Effective tax rate on $100,000: 45.2% (9.6% Social Security, 35.6% income tax)
  • World rank on effective tax rate of $100,000: 4
  • Effective tax rate on $300,000: 51.8% (10% Social Security, 41.8% income tax)
  • World rank on effective tax rate of $300,000: 3

3. France

  • 2012 top rate of income taxes: 45%
  • Effective tax rate on $100,000: 42% (22% Social Security, 20% income tax)
  • World rank on effective tax rate of $100,000: 8
  • Effective tax rate on $300,000: 54% (20% Social Security, 34% income tax)
  • World rank on effective tax rate of $300,000: 1

4. Denmark

  • 2012 top rate of income taxes: 55.4%
  • Effective tax rate on $100,000: 42.3% (0.2% Social Security, 42.1% income tax)
  • World rank on effective tax rate of $100,000: 6
  • Effective tax rate on $300,000: 51.5% (0.1% Social Security, 51.4% income tax)
  • World rank on effective tax tate of $300,000: 4

5. Greece

  • 2012 top rate of income taxes: 45%
  • Effective tax rate on $100,000: 46.5% (16.5% Social Security, 30% income tax)
  • World rank on effective tax rate of $100,000: 2
  • Effective tax rate on $300,000: 45.1% (5.6% Social Security, 39.5% income tax)
  • World rank on effective tax rate of $300,000: 14

For comparison: The United States

  • 2012 top rate of income taxes: 35% (rising to 39.6% in 2013)
  • Effective tax rate on $100,000: 26% (7.3% Social Security, 18.7% income tax)
  • World rank on effective tax rate of $100,000: 55
  • Effective tax rate on $300,000: 30.5% (3.7% Social Security, 26.8% income tax)
  • World rank on effective tax rate of $300,000: 53
It could be worse
While Denmark makes this list as one of the highest-taxed countries, it also routinely scores rankings as the "world's happiest country" and ranks amazingly well in areas such as regulatory efficiency. Also bear in mind that income-tax rankings don't fully account for areas such as VATs and sales taxes, as well as payroll taxes levied on employers that can act as hidden taxes reducing income. 
 
Yet if you're a last-minute filer bemoaning your tax burden in 2012, just remember: If you live in America, it could be worse.

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The article Think Your Taxes Are High? The 5 Countries With the Highest Taxes originally appeared on Fool.com.

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4 Comments

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check.urpriviliege

Such good little belgian slaves here. We have the highest taxes for the lowest pensions and least social service compared to our neighbors. Most of the money ends up in the hands of social fraud , immigration and mainly redundant government workers. If you think you get a lot in return you're delusional.

March 05 2014 at 2:29 PM Report abuse +1 rate up rate down Reply
tmwcpa

To even mention Italy and Greece where tax evasion is an art form practiced by most is disingenuous. Perhaps more meaningful would be a true study showing tax collections compared to tax rates and GDP. America is a very tax law abiding nation compared to most because it does not have confiscatory rates. The higher the rates the higher the noncompliance.

March 03 2014 at 3:54 PM Report abuse rate up rate down Reply
handsome devil

Lots of good comments that clarify the questions I had when reading this. Sales tax, property tax, health insurance,state income tax, all complicate this comparison. Property taxes, especially, are becoming a real burden to all.

February 28 2014 at 11:13 AM Report abuse rate up rate down Reply
midsummercellars

Might be helpful to include state income taxes in your calculations

February 27 2014 at 9:46 PM Report abuse rate up rate down Reply
AV

Do you know how high property taxes + insurance are in the states?
For a decent house you easily pay between 500$ & 1000$ monthly.
In Belgium our property tax (KI) is yearly and around 1000$ - 2000$ for a decent house..

Also if you don't have good (=expensive) health insurance in the states, don't break a leg cause it's a financial nightmare.
University / College is basically free here.

February 26 2014 at 4:02 AM Report abuse rate up rate down Reply
Tim El Jimi

I'm from belgium, and it's true, we pay a LOT of taxes. But we get a lot of it in return as well. We have one of the best social security systems in the world, for example, and putting our kids through college and getting sick doesn't necessarily mean certain personal bankruptcy.

February 25 2014 at 2:08 PM Report abuse -1 rate up rate down Reply
Maurice Loncke

wauw, in the US you only pay that little taxes? On the other hand there you have to take a private health insurance. And well... in reality it's all far more complex then this articles shows. Belgium must also be one of the most bureaucratic country's in the world, we have the highest number of people working in for government(administration). At the end a lot of money is being wasted due to a to complex system. Notwithstanding Belgium is a first-world country.

February 25 2014 at 6:59 AM Report abuse rate up rate down Reply
Guymar

Hmmm. I don't think this is an accurate article. This only concerns income from work. In Belgium the marginal tax rate by which return on capital is taxed varies between 0 and 25. A real hypercapitalist country run by socialists. Tax rate on capital gains: 0. So please dailyfinance, do your homework.

February 25 2014 at 3:53 AM Report abuse rate up rate down Reply