Oct 6th 2010 The Economist.
LOOMING debt and demographic crises have many governments searching for new revenue sources. Some governments have less room to raise taxes than others.
An analysis by KPMG, a consultancy, compares effective tax rates—net of offsets—and social-security contribution rates across 81 countries. Unsurprisingly, European countries top the list.
As a result austerity measures across much of Europe must focus on cutting spending. At just under 40%, the total burden of taxation in India is quite high relative to that in China. But a thin social safety net means that China’s residents must save a high share of their disposable income as insurance, offsetting some of the growth effect of low tax rates. For low rates, nothing beats living in a banking centre, a petro-state, or (naturally) a tax haven.