U.S. Among Lowest Tax Burdens of G8 Countries

Research by UHY, the International Accounting and Consultancy Network

Marketwired

NEW YORK, NY--(Marketwire - 06/13/11) - The United States has one of the lowest tax burdens for both high and low earners among the G8 countries, reveals new research by UHY, the international accounting and consultancy network.Only Japan and Russia tax upper income earners less than the U.S., according to the UHY study. For lower income earners, only Japan levies lower taxes than the U.S. The study focused on comparable domestic and social security taxes for high earners defined as workers earning $200,000 per annum while low earners were defined as workers earning $25,000 per annum. Equivalent state and local taxes were not included in the study.UHY studied tax data in 19 countries across its international network, including members of the G8 as well as key emerging economies. Each country calculated the 'take home pay' for low and high income workers, which considered personal taxes and social security contributions. The calculations are based on a single, unmarried taxpayer with no children.Among the G8 only Japan takes less tax and social security from low earners than the U.S. The tables (below) rank countries' tax burdens from highest to lowest.The G8 countries
Net pay after tax and social security per country in US dollars (from lowest to highest)

 
Salary after tax Salary after tax
(based on gross pay of (based on gross pay of
$25,000) $200,000)
------------------------ ------------------------
Germany $18,149 72.6% Italy $108,189 54.1%
------------------------ ------------------------
Net pay France $18,750 75.0% Germany $111,953 56.0%
------------------------ ------------------------
after tax Italy $18,800 75.2% France $117,519 58.8%
------------------------ ------------------------
UK $20,799 83.2% UK $121,819 60.9%
------------------------ ------------------------
Canada $21,204 84.8% Canada $129,340 64.7%
------------------------ ------------------------
Russia $21,750 87.0% USA $139,709 69.9%
------------------------ ------------------------
USA $22,660 90.6% Japan $144,083 72.0%
------------------------ ------------------------
Japan $22,704 90.8% Russia $174,000 87.0%
------------------------ ------------------------
Todd Bensley, who leads the tax practice of the nationally ranked Top 20 firm of UHY Advisors, Inc., a UHY International member firm, comments: "The findings may surprise those who think we're uncompetitive globally due to high tax rates on our high wage earners. It may be equally surprising to those who think we tax our lowest wage earners disproportionately."Bensley, who is based in Sterling Heights, MI, notes that although the U.S. is quite competitive among the G8 countries, many emerging markets like India, Mexico and Brazil are more competitive on tax rates. "Countries often try to strike that delicate balance between raising adequate revenue and creating attractive economic conditions for businesses to thrive," he adds. "Tax rates may be a deciding factor when a business chooses one location for expansion over another."For high earners the difference in the amount of tax collected between the highest taxing country -- Italy -- and the lowest taxing (excluding Dubai, which has no income taxes) -- Russia -- is $65,811, which means than a person earning $200,000 per annum in Italy would pay over three times as much tax and social security as the equivalent person in Russia.All 19 UHY countries surveyed
Net pay after tax and social security per country in US dollars (from lowest to highest)
 
Salary after tax Salary after tax
(based on gross pay of $25,000) (based on gross pay of $200,000)
-------------------------------- --------------------------------
Germany $18,149 72.6% Italy $108,189 54.1%
-------------------------------- --------------------------------
Net pay India $18,663 74.7% Netherlands $109,417 54.7%
-------------------------------- --------------------------------
after tax France $18,750 75.0% Ireland $111,905 56.0%
-------------------------------- --------------------------------
Italy $18,800 75.2% Germany $111,953 56.0%
-------------------------------- --------------------------------
Estonia $19,518 78.1% Israel $112,363 56.2%
-------------------------------- --------------------------------
Mexico $20,534 82.1% France $117,519 58.8%
-------------------------------- --------------------------------
UK $20,799 83.2% UK $121,819 60.9%
-------------------------------- --------------------------------
Egypt $20,847 83.4% Spain $127,332 63.7%
-------------------------------- --------------------------------
Brazil $21,023 84.1% Canada $129,340 64.7%
-------------------------------- --------------------------------
Netherlands $21,087 84.3% Malaysia $137,128 68.6%
-------------------------------- --------------------------------
Malaysia $21,140 84.6% USA $139,709 69.9%
-------------------------------- --------------------------------
Israel $21,177 84.7% India $141,163 70.6%
-------------------------------- --------------------------------
Canada $21,204 84.8% Japan $144,083 72.0%
-------------------------------- --------------------------------
Spain $21,328 85.3% Mexico $146,377 73.2%
-------------------------------- --------------------------------
Russia $21,750 87.0% Brazil $148,088 74.0%
-------------------------------- --------------------------------
USA $22,660 90.6% Estonia $152,515 76.3%
-------------------------------- --------------------------------
Japan $22,704 90.8% Egypt $160,847 80.4%
-------------------------------- --------------------------------
Ireland $23,937 95.7% Russia $174,000 87.0%
-------------------------------- --------------------------------
Dubai $25,000 100.0% Dubai $200,000 100%
-------------------------------- --------------------------------
The UHY research reveals that for low earners (excluding Dubai) the difference in the amount of tax collected between the highest taxing country -- Germany -- and the lowest taxing -- Ireland -- is $5,788, which means a person earning US$25,000 per annum in Germany would pay over six times as much in tax and social security as the equivalent person in Ireland.About UHY Advisors, Inc. and UHY LLP
UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities provide services from offices across the United States. UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, an international association of legally independent professional service firms.Additional Information about UHY International
UHY International is proud to celebrate its 25th Anniversary in 2011. Established in 1986 and based in London, UK, UHY is a network of independent accounting and consulting firms with offices in nearly 240 major business centres in 78 countries. Over 6,300 staff generated an aggregate income of US$583 million in 2010, ranking UHY the 23rd largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm.For further information on UHY International, go to www.uhy.comUHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.ifac.org/Forum_of_FirmsFor more information on UHY, please contact Dominique Maeremans, marketing & business development manager, UHY International, Quadrant House, 4 Thomas More Square, London E1W 1YW, UK. Tel: +44 (0)20 7767 2621, or email: d.maeremans@uhy.com
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