Welcome to British Expats Abroad
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      Ktee is on a distinguished road

      Countries with Lowest Tax Rates

      Switzerland

      Perhaps unsurprisingly, the country with the lowest marginal tax rate on average income workers — Switzerland, at 20% — also boasts the world’s 7th highest GDP per capita at $43,196. The UK’s Times Online called attention to Switzerland’s “benign tax system” in a 2009 article about the nation’s “low tax high life” that invites people to escape 50% tax rates by moving there. Contrary to general assumptions, the Times explains, Switzerland has found a way to maintain a high standard of living alongside an extremely low personal income tax rate. BusinessWeek likewise reported in 2009 that Switzerland was “openly and legally urging multinationals to relocate” — and succeeding, while other nations buckled beneath staggering debt. Switzerland’s low tax rates have not stopped it from having some of the leading universities in the world, a highly educated work force and less than 3% unemployment as of 2009.



      USA

      The United States is still relatively tax-friendly, with a marginal tax rate of around 27% on average income workers. As the world’s largest economy by far, the economic vitality and high standards of living in the U.S. speak for themselves. The United States boasts the 6th highest GPD per capita in the world at $47,440 and serves, in the words of Wikipedia, as “the epicenter of world trade.” Total GDP stood at over $14 trillion for 2008, which is more than three times that of the world’s second largest economy (Japan). American citizens also have the highest income per hour worked of any nation surveyed. By any objective measure, the United States and its relatively low tax rates offer the best of both worlds — reasonable social safety nets, and extraordinary economic capacity stemming from essentially free market policies. The standard of living in the US is evidenced by consistently being the most immigrated-to nation on earth — 38,355,000 immigrants currently call the US home, more than double that of Russia, which is second on the list.



      Australia

      Australia, with a 31.5% marginal tax rate on average income workers, manage to clock in at 17th on the IMF’s GDP per capita ranking with $36,918. The island nation is bouncing back surprisingly strong from the worldwide economic meltdown, with the BBC reporting on January 14, 2010 that had fallen to 5.5% at a time when similarly situated nations are struggling with double-digit unemployment. According to Deputy Prime Minister Juliar Gillard, the BBC’s findings “provide further evidence of how Australia has outperformed virtually every other advanced economy during the global recession.” With a tax rate similar to that of the United States, Australia has long provided incentives for the hard work, entrepreneurship and risk-taking that are fundamental to sustained economic growth and high standards of living.



      Canada

      Canada is taxed in a manner similar to that of the United States, imposing a 31.2% marginal tax rate on average income workers. Despite a $39,098 GDP per capita (good for 13th on the IMF’s list), Canada has struggled amidst the current economic crisis. The Canadian government’s statistical agency, Statistics Canada, reported on January 8, 2010 that the national unemployment rate sat at 8.5% – slightly below the double-digit rate of the U.S., but still troubling. Canada-based CBC News also reported in early 2009 that the International Monetary Fund had “slashed Canada’s GDP growth for 2009 and 2010.” Like Japan and several other nations so far discussed, Canada maintains universal healthcare coverage for all its citizens in addition to other social programs. Canada has also, according to Reuters, ruled out raising taxes to ease the national deficit, but rather, would “constrain public spending” instead.



      Japan

      Japan is an interesting case on several fronts. Despite being the second largest economy on Earth, Japan’s GDP per capita is just 24th on the International Monetary Fund’s list, at $34,116. Canada’s Parlimentary Research Service offers some answers. One explanation for Japan’s recently diminished economic vitality could be that “Japan was the country with the lowest government revenue-to-GDP ratio (31%) and the second-highest government net debt-to-GDP ratio (78%).” Nonetheless, it’s 33% marginal tax rate on average income workers represents one of the lowest in the world. Japan’s unemployment rate also stood at a manageable 5.5% as of late October 2009, according to the BBC. To its credit, Japan boasts a strong standard of living, including a hybrid system of public and government-subsidized health insurance for all its citizens.



      United Kingdom

      With a 32% marginal tax rate imposed on average income workers, the UK still qualifies as a relatively low-taxed nation, but only amidst the rest of highly-taxed Western Europe. With a GDP per capita of $36,358 (19th on the IMF’s ranking), Great Britain stands as the sixth largest economy in the world by this measure. The United Kingdom provides universal healthcare to its citizens, as do most industrialized nations in Europe, and Poverty.org reports that roughly 21% live below 40% of the country’s median income. The country is also a major financial hub in the world economy, with London housing various important stock exchanges and investment banks. Unemployment is manageable at 7.8%, as of the fourth quarter of 2009, compared with double-digit employment in many similarly situated nations. All told, London continues to offer one of the higher standards of living in the world, owing in part to its relatively low taxes and focus on economic growth.

    2. Moneycorp - Commercial foreign exchange since 1979
    3. #2

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      albertcunningham is on a distinguished road
      very interesting to see a clear description of each country! thank you for sharing, very helpful!
      Last edited by Ktee; 31-10-2013 at 01:38 AM.