Effective tax rates

By The Economist online

IN AN effort to reduce public debt, Spain introduced a "complementary" income tax in January this year that ranges from 0.75% to 7% depending on individual earnings. This effectively increased the country's top tax rate from 45% to 52% for earnings of just over €300,000 ($390,000). But this change still does not push Spain to the top of the tax pile. The world's highest top rates of income tax, according to KPMG, an accounting firm, are found in Aruba (58.95%) and Sweden (56.6%). When employee social-security contributions are taken into consideration, though, neither country makes the top ten for effective tax rates on gross income of $100,000. Belgians pay the most: on earnings over $47,720 they must pay 33.9% in income tax and 13.1% in social security. Yet while economic pressures may persuade some governments to target their richer citizens, Britain plans to drop its top rate of income tax from 50% to 45% in April 2013 and Greece has not raised its top rate since 2010.