A new report shows that corporate tax rates around the world continue to level off. “We aren’t seeing a race to the bottom, we’re seeing a race toward the middle,” said Sean Bray, EU policy analyst at the Tax Foundation.
Governments often justify higher tax burdens with more extensive public services. However, the cost of these services can be more than half of an average worker’s salary.
Designing tax policy in a way that sustainably finances government activities while minimizing distortions is important for supporting a productive economy.
Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) have the highest top statutory personal income tax rates among European OECD countries.
To recover from the pandemic and put the global economy on a trajectory for growth, policymakers need to aim for more generous and permanent capital allowances. This will spur real investment and can also contribute to more environmentally friendly production across the globe.
The EU countries with the highest standard VAT rates are Hungary (27 percent), Croatia, Denmark, and Sweden (all at 25 percent). Luxembourg levies the lowest standard VAT rate at 16 percent, followed by Malta (18 percent), Cyprus, Germany, and Romania (all at 19 percent).