The Average US Tax Rate Compared Overseas

Average tax rate is an average value of all individual, corporate, value added and other miscellaneous taxes levied throughout a certain country. Different countries have different tax rates. Understanding those differences help investors and businessmen in general decide if and how they should do business outside United States. While the averages can give investors a snap shot of a nation's tax system, they don't give the investors the whole picture.  A good investor should examine both the average tax rates and specific tax rates before they do business in another country.

Comparing Tax Rates

In United States, average individual tax rate is 25%, while corporate and value tax rates are at 15% and 20%, respectively. It is one of the many countries with comparatively moderate tax rates - not to high and not too low. There is no clear relationship between tax rates and the state of the nation's economy. Tax rates about 30% are just as likely to be implemented in small developed countries (such as Belgium) as they are in larger developing countries (such as Argentina).

The best way to understand a nation's tax system as to carefully examine each and every facet of it. No two nations have a tax system that's one hundred percent identical.  Many European Union countries use heavy support universal health care and government-run education. All the countries spend a significant portion of their taxes on defense. There is also the matter of tax breaks. Many countries use them to encourage foreign investment and/or investments in certain areas. While high taxes can be discouraging to investors, they should also be mindful of the benefits that they may not be able to find elsewhere.

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