The Top Ten Countries with the Highest Tax Rates

The Top Ten Countries with the Highest Tax Rates

Only two things in life are certain – death and taxes. And for some, an extremely high tax rate is equivalent to death. But then again, for most people, any tax rate greater than 0 percent is considered excessive.

In France, there have been proposals to increase the tax rate for those earning more than $1.23 million to 75 percent from the current 48 percent. In the United States, the top tax rate stands at 35 percent, with proposals calling for its increase to 39.6 percent. It was one of the most contentious issues during the last presidential elections.

It is worth noting, however, that in the case of France, only a miniscule .046 percent of the population would be affected by the proposal to increase the tax rate for the upper echelon of society. In the United States, the most vociferous of those who oppose the increase are billionaire businessmen. The last time the United States had such a high tax rate was during the Clinton administration, and those years were marked by economic prosperity.

Maybe they would not complain too much if they compare the rates being levied upon them to those being charged to the upper echelon in other countries. Here are the top ten countries with the highest tax rates in the world.

1. Aruba – 58.95 percent for those with income of at least $171,149

The country is known to have the highest standard of living in the Caribbean. This Dutch territory has the highest income tax rate in the world. It actually used to hover above 60 percent back in 2007. Married individuals who meet the income requirement are charged a slightly lower 55.85 percent. The country also has a 25 percent tax on capital gains. The rate is double than the average rate in the Caribbean, and especially astounding considering the zero income tax regime in the Bahamas, Bermuda and Cayman Islands.

2. Sweden – 56.6 percent for those with income of at least $85,841

Sweden is a welfare state where citizens get free education and subsidized healthcare. Everyone is also guaranteed a basic pension. Even public transportation is subsidized. All these are the results of an aggressive tax scheme by the Swedish government in which those with extremely high incomes are levied a tax rate of 56.6 percent. As this rate will only kick for those with income of $85,841, most Swedes do not worry about it as it is way above the average income of $48,800. Sweden also has a 30 percent tax on investment income, as well as significant rates for property holdings and social security.

3. Denmark – 55.38 percent for those with income of at least $70,633

This rate is actually an adjusted rate already, as the top marginal rate used to be 62.3 percent in 2008.  Denmark also taxes dividend income by 28 percent and capital gains by 42 percent. Even the Danish church is not exempt, as they are liable for taxes ranging from 0.4 to 1.5 percent.  Gifts to relatives over a certain threshold amount are also subject to 15 percent tax.

4. Netherlands – 52 percent for those with income of at least $70,090

The Netherlands has the highest tax rate in Western Europe, where the regional average stands at 45.7 percent. Its government also charges capital gains tax of 25 percent, land transfer tax of 6 percent and inheritance tax of up to 40 percent. Average income in the country is $57,000.

5. Belgium – 50 percent for those with income of at least $45,037

Just like its neighbor the Netherlands, Belgium’s tax rate is higher than the average for the region. It also charges a social security rate of 13 percent for employees and 35 percent for employers, municipal taxes of up to 11 percent, and capital gains tax of up to 33 percent. The country actually has the highest tax and social security burden in the world, with single taxpayers taking home less than 45 percent of their actual income.  Those in the higher income brackets take home less than 40 percent. Average income in the country is $45,037.

6. Austria – 50 percent for those with income of at least $74,442

Austria is one of the best places to live, so long as you are willing to pay for that privilege. Aside from the high income tax rate, it also has a social security rate of 18 percent, bonus payments are charged 6 percent, and capital gains tax is at 25 percent. Money stashed away in Swiss banks is also taxed through a special agreement between the Swiss and Austrian governments.

7. Japan – 50 percent for those with income of at least $228,880

Japan has the highest income tax rate in the whole of Asia, where the average is only at 23 percent. Note however that the high rate only kicks in at $228,880, which is an extremely high income level in a country where the average income is $53,200.

8. United Kingdom – 50 percent for those with income of at least $234,484

This will only last until April 2013, when the rate will be cut to 45 percent. Those earning less than $14,300 are exempted from paying taxes. Social security taxes can be as much as 14 percent, while capital gains can reach 28 percent.

9. Finland – 49.2 percent for those with income of at least $87,222

The top rate used to be 53.5 percent, but this was cut in recent years. Municipal tax can be as much as 21.5 percent, and a church tax of up to 2 percent. Capital gains can reach 28 percent. The government plans to increase taxes in 2015, with the new rates targeting high income and pension owners and those receiving inheritances above $1.3 million.

10. Ireland – 48 percent for those with income of at least $40,696

The top marginal rate has been increasing steadily the past few years, as it stood at only 45 percent in 2008. Social security tax is at 4 percent. Taxes on gifts, inheritances and capital gains can reach as much as 30 percent. It has the lowest corporate tax rate in Europe, however, at only 12.5 percent.

Top 10 Countries to Have Good Education

In the past 50 years, college graduation rates in developed countries have increased nearly 200%, according to Education at a Glance 2011, a recently published report by the Organisation for Economic Co-operation and Development (OECD). The report shows that while education has improved across the board, it has not improved evenly, with some countries enjoying much greater rates of educational attainment than others. Based on the report, 24/7 Wall St. identified the 10 developed countries with the most educated populations.

The countries with the most highly educated citizens are also some of the wealthiest in the world. The United States, Japan and Canada are on our list and also have among the largest GDPs. Norway and Australia, also featured, have the second and sixth-highest GDPs per capita, respectively. All these countries aggressively invest in education.

The countries that invest the most in education have the most-educated people. All of the best-educated countries, except for the UK, fall within the top 15 OECD countries for greatest spending on tertiary — that is, college or college-equivalent — spending as a percentage of GDP. The U.S. spends the second most and Canada spends the fourth most.

Interestingly, public expenditure on educational institutions relative to private spending by these countries is small compared with other countries in the OECD. While the majority of education is still funded with public money, eight of the countries on our list rely the least on public funding as a percentage of total education spending.

The countries included here have had educated populations for a long time. While they have steadily increased the percentages of their populations with postsecondary educations, the increases are modest compared to developing countries. The U.S., Canada and Japan have had tertiary educational attainment above 30% since at least 1997. Poland, a recently developed country that is not on our list, had a tertiary educational rate of 10% in 1997. As of 2009, that rate had grown to 21%.

These are the 10 most educated countries in the world.

10. Finland

> Pct. population with postsecondary education: 37%
> Avg. annual growth rate (1999 – 2009): 1.8% (3rd lowest)
> GDP per capita: $36,585 (14th highest)
> Pop. change (2000 – 2009): 3.15% (10th lowest)

Finland is a small country relative to the other OECD members. The share of its adult population with some sort of postsecondary education, however, is rather large. This select group is reaching the end of its expansion. From 1999 to 2009, the number of college-educated adults increased only 1.8% annually — the third-smallest amount among all OECD countries. Finland is also one of only two countries, the other being Korea, in which the fields of social sciences, business and law are not the most popular among students. In Finland, new entrants are most likely to study engineering, manufacturing and construction.

9. Australia

> Pct. population with postsecondary education: 37%
> Avg. annual growth rate (1999 – 2009): 3.3% (11th lowest)
> GDP per capita: $40,719 (6th highest)
> Pop. change (2000 – 2009): 14.63% (3rd highest)

Australia’s population grew 14.63% between 2000 and 2009. This is the third-largest increase among OECD countries. Its tertiary-educated adult population is increasing at the much less impressive annual rate of 3.3%. Australia also spends the sixth-least amount in public funds on education as a percentage of all expenditures. The country also draws large numbers of international students.

8. United Kingdom

> Pct. population with postsecondary education: 37%
> Avg. annual growth rate (1999 – 2009): 4.0% (9th highest)
> GDP per capita: $35,504 (16th highest)
> Pop. change (2000 – 2009): 3.47% (13th lowest)

Unlike most of the countries with the highest percentage of educated adults, the UK’s educated group increased measurably — more than 4% between 1999 and 2009. Its entire population only grew 3.5% between 2000 and 2009. One aspect that the UK does share with a number of other countries on this list is relatively low public expenditure on education institutions as a percentage of all educational spending. As of 2008, 69.5% of spending came from public sources — the fourth-smallest amount among OECD countries.

7. Norway

> Pct. population with postsecondary education: 37%
> Avg. annual growth rate (1999 – 2009): N/A
> GDP per capita: $56,617 (2nd highest)
> Pop. change (2000 – 2009): 7.52% (14th highest)

Norway has the third-greatest expenditure on educational institutions as a percentage of GDP, at 7.3%. Roughly 23% of that is spent on tertiary education. In Norway, more than 60% of all tertiary graduates were in a bachelor’s program, well more than the U.S., which is close to the OECD average of 45%. The country is one of the wealthiest in the world. GDP per capita is $56,617, second only to Luxembourg in the OECD.

6. South Korea

> Pct. population with postsecondary education: 39%
> Avg. annual growth rate (1999 – 2009): 5.3% (5th highest)
> GDP per capita: $29,101 (13th lowest)
> Pop. change (2000 – 2009): 3.70% (14th lowest)

Korea is another standout country for its recent increase in the percentage of its population that has a tertiary education. Graduates increased 5.3% between 1999 and 2009, the fifth-highest among OECD countries. Like the UK, this rate is greater than the country’s recent population growth. Korea is also one of only two countries — the other being Finland — in which the most popular fields of study are not social sciences, business and law. In Korea, new students choose to study education, humanities and arts at the greatest rates. Only 59.6% of expenditures on educational institutions come from public funds — the second-lowest rate.

5. New Zealand

> Pct. population with postsecondary education: 40%
> Avg. annual growth rate (1999 – 2009): 3.5% (14th lowest)
> GDP per capita: $29,871 (14th lowest)
> Pop. change (2000 – 2009): 11.88% (8th largest)

New Zealand is not a particularly wealthy country. GDP per capita is less than $30,000, and is the 14th lowest in the OECD. However, 40% of the population engages in tertiary education, the fifth-highest rate in the world. The country actually has a rapidly growing population, increasing 11.88% between 2000 and 2009. This was the eighth-largest increase in the OECD. Part of the reason for the high rate of tertiary graduates is the high output from secondary schools. More than 90% of residents graduate from secondary school.

4. United States

> Pct. population with postsecondary education: 41%
> Avg. annual growth rate (1999 – 2009): 1.4% (the lowest)
> GDP per capita: $46,588 (4th highest)
> Pop. change (2000 – 2009): 8.68% (12th highest)

The U.S. experienced a fairly large growth in population from 2000 to 2009. During the period, the population increased 8.68% — the 12th highest among OECD countries. Meanwhile, the rate at which the share of the population with a tertiary education is growing has slowed to an annual rate of 1.4% — the lowest among the 34 OECD countries. Just 71% of funding for educational institutions in the country comes from public funds, placing the U.S. sixth-lowest in this measure. Among OECD countries, the largest share of adults with a tertiary education live in the United States — 25.8%.

3. Japan

> Pct. population with postsecondary education: 44%
> Avg. annual growth rate (1999 – 2009): 3.2% (10th lowest)
> GDP per capita: $33,751 (17th lowest)
> Pop. change (2000 – 2009): 0.46% (6th lowest)

In Japan, 44% of the adult population has some form of tertiary education. The U.S. by comparison has a rate of 41%. Japan’s population increased just 0.46% between 2000 and 2009, the sixth-slowest growth rate in the OECD, and the slowest among our list of 10. Japan is tied with Finland for the third-highest upper-secondary graduation rate in the world, at 95%. It has the third-highest tertiary graduation rate in the world, but only spends the equivalent of 1.5% of GDP on tertiary education — the 17th lowest rate in the OECD.

2. Israel

> Pct. population with postsecondary education: 45%
> Avg. annual growth rate (1999 – 2009): N/A
> GDP per capita: $28,596 (12th lowest)
> Pop. change (2000 – 2009): 19.02% (the highest)

Although there is no data on the percentage of Israeli citizens with postsecondary education dating back to 1999, the numbers going back to 2002 show that growth is slowing dramatically compared to other countries. In fact, in 2006, 46% of adults ages 25 to 64 had a tertiary education. In 2007 this number fell to 44%. Only 78% of funds spent on educational institutions in Israel are public funds. The country is also only one of three — the other two being Ireland and Sweden — where expenditure on educational institutions as a proportion of GDP decreased from 2000 to 2008. Israel also had the largest increase in overall population, approximately 19% from 2000 to 2009.

1. Canada

> Pct. population with postsecondary education: 50%
> Avg. annual growth rate (1999 – 2009): 2.3% (5th lowest)
> GDP per capita: $39,070 (10th highest)
> Pop. change (2000 – 2009): 9.89% (10th highest)

In Canada, 50% of the adult population has completed tertiary education, easily the highest rate in the OECD. Each year, public and private expenditure on education amount to 2.5% of GDP, the fourth-highest rate in the world. Tertiary education spending accounts for 41% of total education spending in the country. In the U.S., the proportion is closer to 37%. In Israel, the rate is 22%. In Canada, nearly 25% of students have an immigrant background.