Countries with the Highest Income Tax Rates (Ranked)

Ivory Coast holds the world's highest statutory top marginal personal income tax rate at 60 percent — a figure that surprises most people who assume the top slot belongs to a Scandinavian social democracy. Denmark, at 57 percent, follows closely and is perhaps the most famous high-tax country in the global discussion. Austria comes in at 55 percent, Sweden at approximately 52 percent. The countries at the top of this list include both wealthy welfare states that channel high taxes into comprehensive public services and developing nations where the high statutory rate conceals a narrowly applied system that captures only a small fraction of the actual population.

Understanding income tax rankings requires more than a list of top rates. The statutory top marginal rate — the highest percentage applied to the highest slice of income — tells you the maximum legal exposure of a country's top earners. But effective rates, tax wedges, social security contribution systems, deduction regimes, and the income thresholds at which the top rate kicks in all determine what workers actually pay. A country with a 55 percent top rate that applies only above 10 times the average wage is very different from one where the top rate begins at twice the average wage. And a country with a 60 percent top rate but a narrowly enforced tax system and widespread informality operates differently again.

The figures below draw on the OECD's Taxing Wages 2025 report (data year 2024), the OECD Tax Database, and PwC's Worldwide Tax Summaries — the most comprehensive cross-country datasets available for personal income taxation.

Methodology

Q: What do income tax rate rankings measure and which sources track them authoritatively? A: This ranking uses statutory top marginal personal income tax rates — the highest bracket rate applied to the highest income slice in each country's schedule. This is distinct from (a) average effective rates, which reflect actual taxes paid as a share of income after all deductions and credits; (b) the total tax wedge, which adds employer and employee social security contributions to income tax; and (c) corporate income tax rates. The primary source is the OECD Tax Database, Table I.7 — Top Statutory Personal Income Tax Rates, which collects legislated rates from OECD member countries. For non-OECD countries (including Ivory Coast and several African and Asian nations), PwC Worldwide Tax Summaries and KPMG's global tax rate survey provide the most consistent cross-country data. Social security contributions are noted separately where they significantly affect the total burden. All figures refer to the 2024 tax year.

Source: OECD Tax Database — https://www.oecd.org/en/topics/sub-issues/tax-revenues-and-structures/tax-database.html

Source: PwC Worldwide Tax Summaries, Personal Income Tax Rates — https://taxsummaries.pwc.com/quick-charts/personal-income-tax-pit-rates

Source: OECD Taxing Wages 2025 — https://www.oecd.org/en/publications/taxing-wages-2025_b3a95829-en.html

Top countries by statutory top marginal income tax rate (2024)

Rank	Country	Top marginal rate	Notes on threshold and structure
1	Ivory Coast	60%	Top rate applies to income above XOF 30M (~USD 47,000); progressive schedule
2	Denmark	57% (55.9% + 8% labour market tax)	Includes mandatory "labour market contribution" (AM-bidrag); threshold ~DKK 600,000
3	Austria	55%	Applies above EUR 1 million; 50% rate from EUR 90,000
4	Sweden	~52%	State + municipal; municipal varies; average ~52%; top threshold modest
5	Belgium	50% (+communal tax 0–9%)	Effective top rate with communal tax can reach ~53–54%
6	Finland	~51%	State rate 44% + municipal ~8%; top threshold EUR 80,000
7	Netherlands	49.5%	Applies above EUR 73,031; prior top bracket was 52%, reduced in 2020
8	Slovenia	50%	Top rate since 2023 reform
9	Israel	50%	National rate; applies above ILS ~700,000
10	South Africa	45%	Top rate on income above ZAR 1,817,000
11	United Kingdom	45%	"Additional rate" above GBP 125,140; +2% on dividends
12	Australia	45%	Top rate above AUD 180,000; plus 2% Medicare levy
13	Germany	45%	"Rich tax" (Reichensteuer) above EUR 277,826; 42% from EUR 62,810
14	France	45%	Plus 3–4% "exceptional contribution on high income" above EUR 250,000
15	Japan	45%	National rate; plus 2.1% reconstruction surcharge; plus local income tax ~10%
16	China	45%	Applies to monthly income above CNY 80,000
17	South Korea	45%	Top bracket from 2021; applies above KRW 1 billion
18	Spain	47%	National rate 45% plus solidarity surcharge 2% above EUR 300,000
19	Ireland	40%	Top rate from EUR 42,000; plus 4% USC and 4% PRSI push effective rate higher
20	United States	37% (federal)	Federal only; California state adds 13.3%; combined top ~50%+ in high-tax states

Source: OECD Tax Database, Table I.7 — https://www.oecd.org/en/topics/sub-issues/tax-revenues-and-structures/tax-database.html

Source: PwC Worldwide Tax Summaries — https://taxsummaries.pwc.com/quick-charts/personal-income-tax-pit-rates

Cross-reference: Tax Foundation, Top Personal Income Tax Rates in Europe 2024 — https://taxfoundation.org/data/all/eu/top-personal-income-tax-rates-europe-2024/

Historical context: the rise, fall, and partial recovery of high marginal rates

The history of top marginal income tax rates is a story of dramatic change over the twentieth century. Rates that seem extreme today were once commonplace. The United States, often considered a low-tax country by OECD standards, levied a top marginal federal income tax rate of 91 percent from 1951 to 1963 — a rate applied during the Eisenhower administration to incomes above roughly USD 400,000 in today's dollars. The United Kingdom's top rate reached 83 percent on earned income and 98 percent on investment income in the 1970s — figures that led many wealthy Britons, including musicians such as The Beatles, to relocate abroad.

The shift came with the supply-side revolution of the 1980s. President Reagan's 1981 Economic Recovery Tax Act cut the US top rate from 70 percent to 50 percent, then to 28 percent by 1988. Prime Minister Thatcher's reforms reduced the UK's top rate from 83 percent to 60 percent, then to 40 percent by 1988. The theoretical justification was the Laffer Curve: the argument that very high marginal rates reduce economic activity and tax revenue enough that lower rates can collect equal or greater revenue. Whether the Laffer Curve's peak is anywhere near 50 percent remains empirically contested — economists from both sides of the ideological spectrum have published contradictory findings.

The 1990s and 2000s saw a global trend of top rate reductions as countries competed for mobile capital and high-income earners. The financial crisis of 2008 and the subsequent decade of austerity reversed part of this trend: several countries — including France (which briefly levied a 75 percent rate on income above EUR 1 million under President Hollande, struck down by the Constitutional Council), Belgium, and the UK — increased top rates. The trend since 2015 has been more mixed, with some countries increasing rates and others maintaining or slightly reducing them.

Source: OECD Tax Policy Analysis, Historical Top Marginal Tax Rates — https://www.oecd.org/en/topics/policy-issues/tax-policy.html

Ivory Coast: the world's highest rate in context

Ivory Coast's 60 percent top marginal rate is rarely discussed in international tax policy debates, primarily because Ivory Coast is not an OECD member and the rate applies to a very small fraction of the actual workforce in a country where the formal economy is modest relative to population. Most workers in Ivory Coast are employed in agriculture, the informal sector, or small enterprises whose income is either below taxable thresholds or practically outside the formal tax system's reach.

The statutory rate is therefore better understood as the top of a formal tax schedule that captures a narrow economic elite — civil servants, foreign company employees, executives at multinationals — rather than a widespread burden on the middle class as in European welfare states. This distinction between statutory coverage and practical enforcement is critical when comparing high-rate developing-country tax systems with high-rate OECD systems.

The economic literature on optimal income tax rates — pioneered by James Mirrlees's 1971 Nobel-winning work and extended by Emmanuel Saez, Peter Diamond, and others — suggests that the revenue-maximizing top marginal rate for a government primarily concerned with redistribution could be above 50 percent in many settings. Whether Ivory Coast's 60 percent rate is revenue-maximizing, equitable, or well-administered is a separate empirical question that requires country-specific analysis.

Source: PwC, Ivory Coast — Individual Taxes on Personal Income — https://taxsummaries.pwc.com/ivory-coast/individual/taxes-on-personal-income

Denmark: high rates, high compliance, high trust

Denmark's effective top marginal rate — combining the headline rate of approximately 55.9 percent with the mandatory labour market contribution (AM-bidrag) of 8 percent — reaches approximately 55 to 57 percent depending on how these elements are combined. The AM-bidrag applies before the income tax schedule, effectively functioning as a flat tax on gross income that is then deductible from the taxable income calculation.

Denmark consistently appears in international rankings as one of the countries with the highest income tax compliance and lowest tax avoidance rates among high-income nations. Tax authorities attribute this partly to cultural norms — tax compliance is embedded in Danish civic identity in a way that differs from countries where tax avoidance is more socially normalized — and partly to the efficient, digital tax filing system that pre-populates returns for most citizens.

What does Denmark receive in return for its high taxes? Citizens receive free university education (students receive a monthly government grant while studying), universal healthcare with no point-of-service charges, highly subsidized childcare, generous unemployment insurance replacing 90 percent of wages for lower-income workers, and free long-term care for elderly citizens. The Danish welfare state is expensive precisely because it is comprehensive: it eliminates most of the private insurance markets and out-of-pocket expenditures that citizens in lower-tax countries must fund individually.

Source: OECD Taxing Wages 2025 — https://www.oecd.org/en/publications/taxing-wages-2025_b3a95829-en.html

Sweden: progressive taxation as social contract

Sweden's top marginal rate of approximately 52 percent is reached at a relatively modest income threshold by international standards — income above approximately SEK 600,000 (roughly USD 56,000) in a country where the median wage is around SEK 440,000. This means a substantial share of Swedish workers, not just the very wealthy, face the top marginal rate.

Sweden pairs its progressive income tax with a relatively low corporate tax rate (20.6 percent, among the lower rates in Western Europe), a deliberate strategy to attract business investment while taxing personal income progressively. This design reflects the historical influence of Swedish economists — particularly the Rehn-Meidner model developed in the 1950s — who argued for high profits at the firm level to drive investment, while redistributing income through wages and taxation.

Sweden's income tax also operates alongside a universal VAT of 25 percent (with reduced rates on food, transport, and cultural goods), making the Swedish total fiscal burden on consumption and income among the highest in the world. Yet Sweden consistently ranks among the most competitive economies globally (World Economic Forum, World Bank), suggesting that high taxation has not prevented the country from maintaining a dynamic and prosperous market economy.

Source: OECD Tax Database — https://www.oecd.org/en/topics/sub-issues/tax-revenues-and-structures/tax-database.html

The United States: federal floor, state ceiling

The United States' federal top marginal income tax rate of 37 percent places it firmly in the lower portion of OECD high-income-country comparisons. But the US system has a complexity that pure federal rates conceal: state income taxes.

California levies a top state income tax rate of 13.3 percent — itself higher than the total top income tax rate in many countries. New York's combined state-and-city rate reaches approximately 14.8 percent for New York City residents. Adding federal (37 percent) and state rates produces combined top effective rates above 50 percent in California and New York — comparable to many European systems — for high-income earners in those states. Meanwhile, nine states — including Texas, Florida, and Nevada — impose no state income tax at all, creating an effective top combined rate of 37 percent for high earners who reside there.

This variation within a single country is unusual by international standards and has driven some documented migration of high-income earners from high-tax states to no-income-tax states, though the magnitude of this effect is debated by economists. The recent capping of state and local tax (SALT) deductions at USD 10,000 by the 2017 Tax Cuts and Jobs Act reduced the federal subsidy of high-state-tax residency, effectively increasing the cost of living in high-tax states for wealthy residents.

Source: Tax Foundation, State Individual Income Tax Rates 2024 — https://taxfoundation.org/research/all/state/state-income-tax-rates-2024/

What high marginal rates actually mean: the effective rate distinction

The critical gap between statutory top marginal rates and what high earners actually pay reflects deductions, allowances, tax expenditures, and structural features of each country's code. In France, for example, the statutory top rate of 45 percent on regular income is supplemented by social charges (CSG and CRDS totaling approximately 9.7 percent on earned income), bringing the effective combined rate above 55 percent for earned income — but French residents can also deduct charitable contributions, certain professional expenses, and benefit from various income-splitting and investment incentives.

The OECD's tax wedge measure — which captures income tax plus both employee and employer social security contributions as a share of total labor cost — often produces very different country rankings than the statutory top marginal rate. Belgium frequently tops the OECD tax wedge ranking for average workers, not because its top marginal rate is the highest, but because its combination of income tax and social security contributions at middle-income levels is unusually heavy.

For a single worker at the average OECD wage, the total tax wedge in Belgium is approximately 52 percent (OECD Taxing Wages 2025) — meaning more than half of what the employer pays in total compensation never reaches the employee's take-home pay. Germany (approximately 47 percent), France (approximately 46 percent), and Austria (approximately 47 percent) also rank near the top of this measure. The United States at approximately 30 percent and New Zealand at approximately 20 percent sit at the lower end.

Source: OECD Taxing Wages 2025, Effective Tax Rates on Labour Income — https://www.oecd.org/en/publications/2025/04/taxing-wages-2025_20d1a01d/full-report/effective-tax-rates-on-labour-income-in-2024_878e20ff.html

The economic debate: do high marginal rates harm growth?

The relationship between top marginal income tax rates and economic growth is one of the most intensely contested questions in public economics. Arguments against high top rates include the following: they reduce the incentive for additional work and risk-taking at the margin; they encourage tax avoidance and legal tax sheltering; they drive high-skilled workers to relocate to lower-tax jurisdictions; and they reduce the attractiveness of entrepreneurship when the expected reward from success is taxed heavily.

Arguments for high top rates include: the income-weighted elasticity of labor supply is low at very high incomes (very high earners do not typically reduce work much in response to higher marginal rates because they derive intrinsic rewards from their work and status, not just income); the revenue can finance public goods that improve broad economic productivity (education, infrastructure, health); and the economic evidence from the post-WWII era suggests that periods of high top marginal rates in the US and Europe coincided with strong economic growth, not weak growth.

The empirical research, reviewed systematically by Saez, Chetty, and Piketty among others, suggests that the revenue-maximizing top marginal rate may be somewhere in the range of 50 to 73 percent for a country primarily concerned with redistribution — though the specific figure depends heavily on the elasticity of taxable income and behavioral responses in each country. This range overlaps substantially with what several European countries actually levy.

Source: OECD, Tax Policy Reforms 2024 — https://www.oecd.org/en/publications/tax-policy-reforms-2024_e7820dc4-en.html

Frequently asked questions

Q: If Denmark's top income tax rate is 57%, do most Danish people pay that rate? A: No. Like all progressive income tax systems, Denmark applies lower rates to lower income slices. Most Danish workers pay effective rates of 35 to 42 percent — the top rate applies only to the portion of income above a threshold of approximately DKK 600,000 (roughly USD 85,000). Additionally, Denmark's broad social safety net means many services that Danes receive for free — university education, healthcare, childcare, elder care — would cost substantial money in lower-tax countries, partially offsetting the tax differential when comparing total disposable income and welfare.

Q: Which countries have no income tax at all? A: Several jurisdictions levy no personal income tax, primarily small, wealthy states that rely on other revenues. These include the United Arab Emirates, Saudi Arabia (for most citizens), Qatar, Kuwait, Bahrain, and Oman — Gulf states that fund government through oil and gas royalties. Monaco has no income tax for residents. The Cayman Islands, Bermuda, and the British Virgin Islands are zero-tax territories. Several Caribbean island nations also have no income tax. These are typically small jurisdictions with unusual revenue bases and should not be conflated with countries that have chosen a low-tax model while providing their own public services from taxation.

Q: Does a higher top income tax rate mean more government revenue? A: Not necessarily, and this is the central practical dispute in tax policy. At very high marginal rates, empirical evidence suggests that taxable income reported by top earners declines — through avoidance, sheltering, reduced work, or emigration — so that raising the rate does not produce proportional revenue gains. The Laffer Curve concept captures this insight, even if its specific turning point is empirically uncertain and politically contested. Revenue from high earners also depends critically on how well the rate is enforced. Denmark and Sweden collect substantial revenue from high rates partly because they have sophisticated tax enforcement, broad reporting requirements, and a cultural norm of compliance that keeps avoidance low.

Q: How does income tax in the US compare to other wealthy countries when you include all taxes? A: The US collects less total tax revenue as a share of GDP — approximately 27 percent (OECD 2024) — than most Western European countries, where the range is typically 38 to 50 percent. The gap is accounted for primarily by lower social security contributions, the absence of a federal VAT (European VAT rates are typically 20 to 25 percent), and lower government spending on health and education. For an American worker, the combination of lower income tax, lower social contributions, and high private expenditure on health insurance, education loans, and childcare can result in total disposable income comparable to European peers — or significantly lower, depending on family circumstances and health events.

The takeaway

Income tax rate rankings reveal both the maximum ambition of a country's redistribution system and the limits of statutory numbers as a guide to actual tax burden. Ivory Coast's 60 percent top rate operates in a radically different context from Denmark's 57 percent — one has comprehensive public service delivery, near-universal compliance, and institutional capacity to enforce; the other has a narrowly applied formal system in an economy with significant informality. Among wealthy democracies, the Nordic countries — Denmark, Sweden, Finland, and Norway — consistently lead in statutory rates and also deliver some of the most comprehensive public services in the world. The debate over whether their model can or should be replicated in lower-tax countries involves not just tax policy but the full architecture of labor relations, public trust, and democratic governance that makes high-tax, high-service models function.

Sources

• OECD Tax Database, Top Statutory Personal Income Tax Rates — https://www.oecd.org/en/topics/sub-issues/tax-revenues-and-structures/tax-database.html
• OECD Taxing Wages 2025 — https://www.oecd.org/en/publications/taxing-wages-2025_b3a95829-en.html
• PwC Worldwide Tax Summaries, Personal Income Tax Rates — https://taxsummaries.pwc.com/quick-charts/personal-income-tax-pit-rates
• Tax Foundation, Top Personal Income Tax Rates in Europe 2024 — https://taxfoundation.org/data/all/eu/top-personal-income-tax-rates-europe-2024/
• Tax Foundation, State Individual Income Tax Rates 2024 — https://taxfoundation.org/research/all/state/state-income-tax-rates-2024/
• OECD Tax Policy Reforms 2024 — https://www.oecd.org/en/publications/tax-policy-reforms-2024_e7820dc4-en.html
• OECD, Effective Tax Rates on Labour Income 2024 — https://www.oecd.org/en/publications/2025/04/taxing-wages-2025_20d1a01d/full-report/effective-tax-rates-on-labour-income-in-2024_878e20ff.html

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