The Turbo-est Taxes
January 13, 2011
In her annual report to Congress delivered last week, the Internal Revenue Service's ombudswoman urged lawmakers to simplify the federal tax code. Even if Congress listens to her advice, overhauling our tax system for the first time since 1986 could take years. In the meantime, where should you move to avoid a tax-season headache?
The Maldives -- particularly if you own a business, says Slate.
To determine the relative arduousness of various taxation systems, researchers from the World Bank and PricewaterhouseCoopers dreamt up a hypothetical, but very specific, company -- a ceramic flowerpot manufacturer that owns one building, two plots of land and one truck; has 60 employees; and pays 50 percent of its net profits to its owners, among other assumptions -- and brought it through the taxation process of 183 nations and territories.
- It would take the imaginary flowerpot manufacturer's accountant less than an hour to comply with the Maldives' tax code.
- Compare that with Brazil, the lowest-ranking country, where the company would have to spend 2,600 person-hours -- about 108 days of nonstop work, or 325 eight-hour shifts -- to meet the requirements.
- That makes filing taxes in Belarus, the second lowest, seem like a cakewalk at 1,080 hours.
- The United States, where it would take the flowerpot company 187 hours to comply, ranks 66th from the top by this measure.
Unfortunately, it's tougher to find easily comparable data for taxes on individuals. But the Maldives, which has no income, sales, property or capital gains taxes, would still rank near the top -- as would notorious tax havens like the Cayman Islands and Andorra, says Slate.
Source: Jeremy Singer-Vine, "The Turbo-est Taxes," Slate, January 6, 2011.
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