The lesson might be to add more international allocations to 401(k) plan offerings (or to retire abroad).
The Tax Foundation, a Washington, D.C.-based think tank, released its annual International Tax Competitiveness Index for 2015. As one might expect, the United Sates fared poorly, losing out to countries like Estonia, the Slovak Republic and Greece(!).
“The United States provides a good example of an uncompetitive tax code,” according to the write-up that accompanied the index. The last major change to the U.S. tax code occurred 29 years ago as part of the Tax Reform Act of 1986 …Since then, member countries of the Organization for Economic Co-operation and Development (OECD) have followed suit, reducing the OECD average corporate tax rate from 47.5 percent in the early 1980s to around 25 percent today.”
The Foundation argues that the U.S. government has moved in the opposite direction, raising its top marginal corporate rate to 35 percent. The result: the United States now has the highest corporate income tax rate in the industrialized world.
“While the corporate income tax rate is a very important determinant of economic growth and competitiveness, it is not the only thing that matters. Several factors determine the competitiveness of a tax code; the structure and rate of corporate taxes, cost recovery of business investment, property taxes, income taxes, and tax rules for foreign earnings are some of the factors that determine whether a country’s tax code is competitive.”
The ITCI scores the 34 member countries of the OECD based on these five categories in order to rank the most competitive tax codes in the industrialized world.
| Country | Overall Score | Overall Rank | Corporate Tax Rank | Consumption Taxes Rank | Property Taxes Rank | Individual Taxes Rank | International Tax Rules Rank |
| Estonia | 100.0 | 1 | 1 | 9 | 1 | 2 | 17 |
| New Zealand | 91.8 | 2 | 21 | 6 | 3 | 1 | 16 |
| Switzerland | 84.9 | 3 | 5 | 1 | 32 | 4 | 9 |
| Sweden | 83.2 | 4 | 6 | 11 | 6 | 21 | 5 |
| Netherlands | 82.0 | 5 | 16 | 12 | 23 | 6 | 1 |
| Luxembourg | 79.1 | 6 | 29 | 5 | 17 | 13 | 4 |
| Australia | 78.3 | 7 | 25 | 8 | 4 | 16 | 18 |
| Slovak Republic | 76.0 | 8 | 17 | 32 | 2 | 7 | 8 |
| Turkey | 75.5 | 9 | 8 | 25 | 7 | 3 | 15 |
| Ireland | 71.6 | 10 | 2 | 24 | 16 | 22 | 23 |
| United Kingdom | 71.5 | 11 | 14 | 16 | 30 | 18 | 2 |
| Norway | 71.0 | 12 | 18 | 22 | 14 | 12 | 13 |
| Korea | 70.9 | 13 | 15 | 3 | 25 | 5 | 31 |
| Czech Republic | 69.9 | 14 | 7 | 31 | 9 | 11 | 11 |
| Finland | 69.8 | 15 | 4 | 14 | 18 | 27 | 20 |
| Austria | 69.5 | 16 | 19 | 23 | 8 | 30 | 6 |
| Germany | 69.2 | 17 | 23 | 13 | 13 | 31 | 7 |
| Slovenia | 69.1 | 18 | 3 | 27 | 15 | 15 | 21 |
| Canada | 68.7 | 19 | 22 | 7 | 21 | 19 | 25 |
| Iceland | 66.5 | 20 | 12 | 21 | 22 | 28 | 10 |
| Denmark | 65.8 | 21 | 13 | 20 | 10 | 29 | 22 |
| Hungary | 65.1 | 22 | 11 | 34 | 24 | 20 | 3 |
| Belgium | 62.5 | 23 | 28 | 28 | 20 | 10 | 12 |
| Mexico | 61.6 | 24 | 30 | 18 | 5 | 8 | 34 |
| Japan | 61.5 | 25 | 33 | 2 | 27 | 23 | 28 |
| Israel | 60.8 | 26 | 24 | 10 | 11 | 25 | 30 |
| Greece | 59.4 | 27 | 20 | 26 | 26 | 9 | 29 |
| Chile | 56.8 | 28 | 10 | 29 | 12 | 14 | 33 |
| Spain | 56.0 | 29 | 32 | 15 | 31 | 26 | 14 |
| Poland | 55.8 | 30 | 9 | 33 | 28 | 17 | 27 |
| Portugal | 53.1 | 31 | 26 | 30 | 19 | 32 | 26 |
| United States | 52.9 | 32 | 34 | 4 | 29 | 24 | 32 |
| Italy | 50.9 | 33 | 27 | 19 | 33 | 33 | 19 |
| France | 43.7 | 34 | 31 | 17 | 34 | 34 | 24 |
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
