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If you thought your income taxes were high, you may want to think again.
The newly elected Socialist Party in France is poised to institute a major tax hike on the nation's wealthiest. To help pay down the country's debt, French President Francois Hollande wants to raise the tax rate on income over 1 million euros (or $1.23 million) from 48 percent to 75 percent. This tax hike would affect about 30,000 French citizens - or .046 percent of the population. The French Parliament will take up the issue in September.
Hollande's tax hike on the rich was part of his presidential campaign platform. There are a number of experts - in France and the U.S. - who are skeptical that raising taxes on the wealthy will reduce the country's fiscal burden.
"France is headed into a recession, if it is not in one already," says former Republican presidential candidate Steve Forbes in the accompanying interview. "Piling on new taxes when you have a contracting economy, that is lethal. That is poison."
There is no question that a top tax rate of 75 percent is very high. But many countries in Europe already have a tax rate of 50 percent or more.
Here at home, however, the top tax rate pales in comparison at 35 percent. And right now there is a fierce political battle over whether to increase the top tax rate from 35 percent to 39.6 percent — a level not seen since the Clinton administration. It's important to note that the U.S. experienced economic prosperity during the Clinton administration -- even with high corporate and individual tax rates.
Tax Matters: Obama vs Romney
President Barack Obama would like to extend the Bush-era income tax cuts, which are set to expire at the end of the year, for 98 percent of Americans. But he would let them expire on the wealthiest Americans who make more than $250,000 annually. Obama also wants Americans making more than $1 million a year to pay a tax rate of at least 30 percent.
Republican presidential candidate Mitt Romney, on the other hand, wants to reduce everyone's taxes by 20 percent, which the nonpartisan Tax Policy Center found would benefit the wealthy and hurt America's lowest earners.
Forbes, an advocate of lower taxes, says Romney's plan is a step in the right direction. He's also a long-time supporter of a flat-tax.
U.S. vs The World: Who's Got the Highest Income Tax?
So how does the U.S. stack up against the rest of the world when it comes to the top income tax brackets?
Here's a list of the countries with the highest income taxes in 2012, according to data compiled by KPMG and based on August 7 exchange rates.
10. Ireland
Highest income tax rate: 48%
Top marginal tax rate kicks in at: $40,696 (32,801 euros)
9. Finland
Highest income tax rate: 49%
Top marginal tax rate kicks in at: $87,222 (70,300 euro)
5. (Tied) United Kingdom
Highest income tax rate: 50%
Top marginal tax rate kicks in at: $234,484 (150,000 pounds)
5. (Tied) Japan
Highest income tax rate: 50%
Top marginal tax rate kicks in at: $228,880 (18,000,000 yen)
5. (Tied) Belgium
Highest income tax rate: 50%
Top marginal tax rate kicks in at: $45,037 (36,300 euros)
5. (Tied) Austria
Highest income tax rate: 50%
Top marginal tax rate kicks in at: $74,442 (60,000 euros)
4. Netherlands
Highest income tax rate: 52%
Top marginal tax rate kicks in at: $70,090 (56,492 euros)
3. Denmark
Highest income tax rate: 55.38%
Top marginal tax rate kicks in at: $70,633 (423,803 krone)
2. Sweden
Highest income tax rate: 56.6%
Top marginal tax rate kicks in at: $85,451 (574,300 kroner)
1. Aruba
Highest income tax rate: 58.95%
Top marginal tax rate kicks in at: US $171,149
