As a result of the 2017 tax cuts, the richest Americans saw their highest federal marginal tax rate fall to 37%, from the 39.6% they had been paying since 2013.
How does this higher annual taxable income rate compare to the rest of the world?
This is not an easy question to answer as each country‘s national tax code has different types of deductions and credits, not to mention the different treatments for capital gains income.
But comparing the maximum rate of annual taxable income provides a better understanding of how countries view their wealthiest households as a source of public revenue. (These are the countries with the largest gaps between rich and poor.)
Some countries levy an additional surcharge on their wealthiest taxpayers, sometimes referred to as a “solidarity” charge or contribution, as it is called in Greece and Portugal. Germany levies additional fees on its richest to finance regional development. Japan has a surtax to help rebuild after the Fukushima nuclear disaster in 2011. Some of the countries with the highest tax rates are among the richest countries in the world.
To identify the 25 countries with the highest personal income tax rates in 2021, 24/7 Wall St. used data from multinational accounting firm KPMG for 142 countries. Countries are ranked according to the highest marginal tax rate, that is, the highest rate applied (above a certain income threshold).
The United States ranks 41st out of 140 countries on the basis of the highest marginal national income tax rate, according to KPMG. This places the highest annual tax rate on America’s richest between Norway and Mexico, but considerably lower than some of the highest rates in other major economies in the world including UK, France , Germany, Japan and China. (U.S. states collect the most income tax per person.)
It is important to recognize that these rates are marginal, meaning that the highest taxable income rate applies only to money earned above a threshold. In 2021, this top tax rate of 37% in the United States only applied to annual taxable income greater than $ 628,301 for a married couple filing jointly and greater than $ 523,600 for single filers.
here are the 25 countries where the rich are the most taxed
To identify the 25 countries with the highest personal income tax rate in 2021, 24/7 Wall St. used data from multinational accounting firm KPMG for 142 countries (excluding dependent territories). Population figures for 2020 are taken from the World Bank’s World Development Indicators. Some country information came from PricewaterhouseCoopers, a multinational accounting firm. Currency conversions are based on mid-November exchange rates. A country’s policy and tax rate can change at any time, and resident and non-resident taxes may differ.