A new study out this past week [pdf] from two European economists attempted to come up with an empirical ranking of tax attractiveness of various national tax systems around the world. Using metrics like statutory tax rates, investment taxes, withholding taxes and status of double taxation, Sara Keller and Deborah Schanz constructed an index and ranking for one hundred countries around the world.
The United States comes in very, very near the bottom.
Largely due to corporate taxes, investment taxes and double taxation, the U.S. ranks 94th out of 100 in these tax attractiveness rankings, behind such attractive destinations as Venezuela, Serbia, and Greece. Countries that are known as "tax havens" like the Bahamas help to drive the Caribbean's ranking as the most attractive geographical region in the world.
As the Tax Foundation notes, the American policy of global taxation puts the U.S. in a unique class of countries:
As with corporations, the United States tax code taxes the income of individuals, no matter where in the world they earn it. The only two other counties in the world that tax individuals this way are North Korea and Eritrea. Let me repeat that: North Korea and Eritrea.
Now, to throw a little bit of cold water on this: there's a lot more than tax system that makes a country "attractive" to both prospective immigrants and businesses. Very few people outside of Edward Snowden would prefer to immigrate to Venezuela over the United States. A strong civil society, justice system and rule of law obviously make the United States a very attractive place to live.
This is also a subjective and experimental study that necessarily includes value judgments, so it's far from authoritative.
But in an increasingly industrializing and interconnected world, these tax incentives will matter even at the margins. Legislators and policymakers should be taking things like this into effect when considering tax reform.