World Business NewsA round up of the latest news for those doing business internationally
US has relatively favorable Income Tax policies
Zone(s): USA, Global ¦ Sector(s): Taxation, Employment
[25 June 2014, Tax-News.com] By Mike Godfrey, Tax-News.com, Washington: In a comparison of labor tax burdens in Organization for Economic Co-operation and Development countries, the Tax Foundation found that, while workers in the United States ended up paying, on average, 31.3 percent of their income in taxes in 2013, this was only the 26th highest among members, and below the 34-country average of 35.8 percent. The OECD found that the average worker in the US in 2013 paid an effective individual income tax rate (federal, state and local) of 15.4 percent, and paid an additional 15.9 percent payroll tax rate (7 percent from the employee and 8.9 percent from the employer).
The average individual income tax bill was $8,196 and the average payroll tax bill was $8,462, amounting to a total average tax bill of $16,658. Without these taxes, US workers would, on average, have an average take home salary of $53,223. The TF noted that the highest total tax burden on wage income was in Belgium in 2013 at 55.8 percent, followed by Germany (49.4 percent) and Austria (49.0 percent). The country with the lowest total tax rate on labor was Chile at only 7 percent. New Zealand had the second lowest effective rate at 16.9, followed by Mexico at 19.2 percent.