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Tax policy remains one of the most debated issues in politics, especially in the U.S. Liberals tend to advocate for higher taxes, especially for wealthy individuals, to fund better public services and social welfare programs. Conservatives, on the other hand, say taxes should be lowered to increase consumer spending and be less of an imposition on businesses. Both approaches have the same objective: to improve the economic well-being of people.
The corporate tax rate is at the heart of this debate over taxes. In the U.S., many corporations are moving their headquarters overseas to avoid high tax rates. It's estimated that 72 percent of the Fortune 500 companies take advantage of such tax shelters. The U.S. has one of the highest corporate income tax rates in the world at 39.1 percent. Some oil-rich countries in the Middle East have even higher rates, although they are subject to volatile market conditions.
On the individual level, some countries, particularly in Europe, have very high taxes. Belgium, Denmark, and Germany are among the most-highly taxed, with single, childless individuals paying something around 40 percent. Broadly speaking, people who live in places like this are inclined to pay so much because they visibly see their money being put to good use: schools, healthcare, public transit, etc.
Would you ever want to live in a place with high taxes like Denmark? Let us know what you think in the comments below.
Fortune 500 firms hold $2.1 trillion overseas to avoid taxes: study (fortune.com)
"Repatriating that money would yield over $180 billion in taxes, the authors say."
A Comparison of the Tax Burden on Labor in the OECD (taxfoundation.org)
"Average wage earners in the United States face two major taxes: the individual income tax and the payroll tax (levied on both the employee and the employer)."
Corporate Income Tax Rates around the World, 2014 (taxfoundation.org)
"The United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent, exceeded only by Chad and the United Arab Emirates."
High-income Americans pay most income taxes, but enough to be 'fair'? (pewresearch.org)
"Americans don't much like the federal tax system, a recent Pew Research Center report finds. "