By: Tyler Curry


While Congress was away at recess, prominent companies like Google and Etsy revealed their reconstructed backdoors to the U.S. corporate tax system. There are other entities, like them, making the move overseas to avoid the 35% tax hike.

U.S. corporations are among the most taxed, but there are others, in similar brackets, across the world. Taxes have served as a pillar to sustainable economies since Ancient civilization. Though in a globalized society, companies and individuals are less confined to a single country, giving key market players (producers and consumers) more power.

Do U.S. business leaders really have it that bad, or are they on to something? Is high corporate tax a movement to a socialist society – and what can be predicted? Using Visart software, these questions can be answered with a few data visualizations.

Corporate Tax

Tax Reform 1

The map illustrates varying tax rates throughout the world. Staunchly indicated in red, Venezuela is in the same cohort as the U.S. with tolls between the 40% and 50% range. That would be red flag number one. Venezuela’s socialist economy is a disaster. On the other land, however, nations highlighted in shades of green indicate low tax countries – often where U.S. corporations have sought financial refuge.

Tax Reform 2 A deeper look into the data reveals the U.S. corporate tax at a rate of 35% nationally and 12% at the local level. That is 47% in total – but remember, foreign revenues are taxed, too.

You may consider: even in an oil rich nation, tax rates reach 50% – 55%. Opening a business in Iowa? That will bring you to a total of 47% tax rate on income, net worth and the like. This has been a financial pain point for many leading organizations. In many cases, U.S. firms have moved headquarters, foreign subsidies – and jobs –elsewhere.

There are several countries that do not collect corporate tax at all. Zilch. Bahrain and the United Arab Emirates, for example, are among several nations who have foregone the cut off the top. As a result, there are slues of companies with tax residencies in Dubai, Ireland and even Bermuda.Tax Reform 3

Aside fro those with absolutely no corporate taxes, Uzbekistan and Montenegro pay a significantly lower rate than most countries. The grid shows that business owners in these countries can expect to pay less than 10% tax on corporate revenue – Uzbekistan at the bottom of the list at 8% and Montenegro at 9%. Other nations that follow are Bosnia and Herzegovina, Bulgaria, and Macedonia all at 10%.Tax Reform 4

Individual Tax

Tax Reform 5

Just like corporation, individuals are susceptible to varying tax rates. Recalling the example of a U.S. corporate taxation, we see a clear difference in numerical value. The U.S. endures the toughest corporate tax regulation system, but is fairly modest to individuals; indicated in the 30 – 40% tax sanction. Whereas, many countries in Europe have regulate steep tax rates to their citizens.

Top marginal individual tax breaks with the corresponding graph tohighlight the most highly taxed citizens. In France, citizens are taxed 75% off the top. Following this number are Chadians (60%), Swedes (57%), Danes (55.6%) and Spaniards (52%).Tax Reform 6

Similar to the U.S., French President, Francois Hollande, introduced a 75% tax on entities bringing earnings over $1.3 million (in USD), despite the backlash. They call it the “millionaire tax,” imposed as a way for the rich to help pay down the national deficit. By the way, France is another Socialist country. Perhaps this is what U.S. lawmakers wanted to incorporate?

Either way, both countries seem to have overstepped the mark. Citizens affected by each country’s tax policy have subsequently protested.

So how do we bring business back to the U.S. soil and economy? Lawmakers will pursue federal tax reform to decrease the high rates, with support from Democrats and Republicans. Though questions, of how much, still linger.


 Sources:

http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx
http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-corporate-tax-rates-2014.pdf
http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/individual-income-tax-rates-table.aspx
http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
http://www.tradingeconomics.com/country-list/personal-income-tax-rate