Highest Tax Rates

Once my teacher in 10th standard posed this question to me

Guess whats the highest tax rate Indians have paid? and the answer to it was (as far as I remember) in the range of 90-95% which made me (like everone else) wonder why would you earn in the first place?

This question got triggered when I met this guy (think from Sweden) during an exchange programme where I was told that taxes are as high as 40% BUT the difference is the government pays for all the education expenses.

These incidents trigger two questions

1. What are the highest tax rates in the world?

2. Why should we have such high tax rates?

The answer to the first question could be found out thru a simple wiki

Some countries like Angola, Benin, Denmark, Sweden have tax rates as high as 60%. There are several other countries like Belgium, Cuba, Gabon etc… which have tax rates at about 50% which means 50% of the salary you earn… is taken away by the government.

This is a tricky situation. If government can pay for all my basic necessities and cut equivalent tax… Then I would prefer shirking (unless I am very ambitious).

2 Responses to “Highest Tax Rates”

  1. 1 Saurabh Bagrodia
    August 15, 2009 at 2:19 pm

    The incidental tax rate in Sweden is 55% and tax is a complicated thing. The employee pays tax and the employer pays tax :), just google on Sweden withholding tax.

    But guess what, education is free 🙂 even higher education… i guess same goes for most facilities / amenities.

    • 2 Siddharth Shah
      August 15, 2009 at 5:45 pm


      Thanks for your comment. Yes, I know about the Sweden withholding tax. What I was trying to understand was… how good such a system is ….

      I can go to the most expensive school even when I am not earning. The other is, how much of tax evasion a Swedish guy must be doing? The incentive to evade tax is much more. Hai naa?

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