Most, if not every country, tax their citizens one way or the other. However, some countries collect more tax revenue than others. The tax rate is an essential factor that can directly impact the standard of living and GDP per capita. With higher income taxes, it means you have to pay more than what you earn. There are mainly three tax systems that countries around the globe adopt — Proportional Tax, Progressive Tax and Regressive Tax. This article will talk about 5 counties with the highest income tax rate and how this has affected them. So, let’s dive right in.
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Regarding GDP per capita, Sweden is the 7th richest country globally ($54,563 as of 2020). It has a high standard of living, recording $537 billion as its GDP in 2020. Presently, the country records the highest income rate worldwide, 57.1%. As for the taxation system, Sweden uses a Progressive Tax system. It collects income tax from work and social security contributions. Swedish online casinos also pay tax on their revenues. However, players do not need to worry about this, especially when using reliable and safe banking options. For example, you can deposit and withdraw using Paypal with Platin Casino, so you are free from paying tax on transactions.
Denmark is a country that has a developed economy. It ranks 18th in the world’s list of highest GDP per capita, $60,908 in 2020. Although the country has a small population, its citizens pay one of the highest income tax rates, equivalent to 55.8% per capita income. The country also has a social program accessible to all Danish people, which explains why their welfare is pretty good. Denmark recorded $355 billion GDP in 2020, and it uses a progressive taxation system where your taxes increase as your income increases.
Austria is a German-speaking country that requires its people to pay a top marginal tax rate of 55%. It has a high standard of living and a well-developed social market economy. The GDP per capita is $48,105, while the actual GDP is $429 billion (2020), making it the 12th richest country in the world in terms of GDP per capita. Austria uses a progressive taxation system, and income tax applies only to income earned in the country. However, bonus payments are also taxed at 6% and capital gains at 25%.
The economy in the Netherlands is well developed, the 17th largest economy worldwide. It is considered a trading powerhouse and has a high-income tax rate. The country uses the progressive taxation system, and people under 67 years old pay 52% income tax on over €66,000 income. Besides that, the government collects tax revenue on inheritance (40%), capital gains (25%) and land transfer (2%). The GDP per capita of the country is $52,304, while the GDP is $912 billion (2020)
Finland is another Scandinavian country with a high-income tax rate. It ranks high when it comes to welfare, which is likely a result of the high tax rates. With a population of just over 5.5 million, the country ranks 8th on the global highest tax countries list, with a marginal tax rate of 51.6%. As for the standard of living, it is not too bad. The GDP per capita was $49,041 in 2020, while the GDP was $271 billion. Finland uses a progressive tax system for income tax collected from individuals and a flat/proportional tax rate for municipal tax purposes.
This article has talked about five countries with the highest income tax in the world. These are European and Nordic countries, so it is no surprise that they also have good economies. From the five countries, we discussed Sweden has the highest tax rate, 57.1%, while Finland has the lowest, 51.6%. However, note that it is not only Nordic and European countries that have high tax rates. Other countries like Japan and Israel also record high tax rates.