High marginal effective tax has a negative effect on work incentives by disconnecting the private and social returns to economic activity.
This briefing compares effective marginal tax rates on top incomes in 31 developed countries. With marginal tax rates between 75% (Sweden) and 36% (Slovakia), the briefing concludes that marginal effective tax is particularly high in countries with high payroll taxes.
Furthermore, Nordic countries with high consumption taxes also tend to have high marginal effective taxes. On the other hand, these rates are rather low in Eastern European countries like Poland, the Czech Republic, or Slovakia.
Read Full Report