31 Countries That Have A Better Tax Code Than The United States

Government shutdown darkAPThe White House

The US tax code is falling behind its international peers and now has the third worst tax code in the developed world according a new report from the nonpartisan think tank Tax Foundation.

Tax Foundation’s report, which was released Monday morning, found 31 0f the 34 developed countries in the Organisation for Economic Co-operation and Development have a better tax code than the US. Only France and Portugal ranked lower, the report said.

Here is the full list showing all of the countries that rank above the US.

1. Estonia

2. New Zealand

3. Switzerland

4. Sweden

5. Australia

6. Luxembourg

7. Netherlands

8. Slovak Republic

9. Turkey

10. Slovenia

11. Finland

12. Austria

13. Korea

14. Norway

15. Ireland

16. Czech Republic

17. Denmark

18. Hungary

19. Mexico

20. Germany

21. United Kingdom

22. Belgium

23. Iceland

24. Canada

25. Japan

26. Poland

27. Greece

28. Israel

29. Chile

30. Spain

31. Italy
32. United States

33. Portugal

34. France

Tax Foundation attributed America’s poor ranking to a high corporate taxe rate.

“The United States scores poorly largely because it maintains the highest corporate tax rate in the developed world at 39.1 per cent and is one of the six remaining countries in the OECD with a worldwide system of taxation,” the Tax Foundation said. “Its poorly structured property, individual, and capital gains and dividends taxes also contribute to the low ranking.”

At the other end of the list were Estonia, which ranked first, followed by New Zealand and Switzerland. The Tax Foundation praised Estonia for “having the most competitive tax system in the developed world” and a “relatively low” 21% taxation rate for corporations and individuals.

The Tax Foundation, which has been accused by some groups of having a conservative bent, argued its findings should prompt the US and other countries into reforming their tax codes to be more like those its report identified as leaders on the issue.

“No longer can a country tax business investment and activity at a high rate without adversely affecting its economic performance,” a co-author of the report, Kyle Pomerleau, said in a statement. “In recent years, many countries have recognised this fact and have moved to reform their tax codes to be more competitive. However, others have failed to do so and are falling behind the global movement.”

The report comes as the debate over corporate inversions heats up in US politics. Major companies, most recently Burger King, have shifted their headquarters overseas in order to avoid US tax rates.

View the full report below.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.