New Study Says U.S. Tax System Is Among Worst In The World
How does the U.S. tax system compare to other tax systems around the globe? Well, not very favorably, according to a new study from the Tax Foundation. The 2015 International Tax Competitiveness Index (ITCI) puts the United States in 32nd place among 34 countries in the OECD (Organization for Economic Cooperation and Development) when it comes to a competitive tax environment.
The ITCI measures the degree to which the tax systems in the OECD countries promote competitiveness through low tax burdens on business investment and neutrality through a well-structured tax code. The measurement is based on more than 40 variables in five categories: corporate taxes, consumption taxes, property taxes, individual taxes, and international tax rules.
The Tax Foundation says the U.S. is lagging behind because of three main factors:
- It is one of six countries in the OECD that don't have territorial tax systems.
- It maintains the highest corporate income tax rate in the industrialized world at 39 percent.
- It has a poorly structured individual income tax system, with relatively high rates, that taxes both dividends and capital gains.
Italy and France both finished behind the U.S., while Estonia, New Zealand, and Switzerland have the world's most competitive tax systems.
But regardless of what you, or the Tax Foundation, think of the U.S. system, taxes remain a prime consideration in your financial decisions.
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