- Tax Code Structure and Economic Impact: A well-structured tax code is vital for a country’s economic performance, promoting compliance and development while generating necessary revenue. Conversely, poorly structured systems can distort economic decisions and hinder growth. This principle applies at both national and EU levels, where varied tax policies among member states necessitate a comparative evaluation.
- European Tax Policy Scorecard (ETPS): The ETPS evaluates the competitiveness and neutrality of tax systems across European countries based on 40 variables, including corporate taxes, individual income taxes, consumption taxes, and cross-border rules. Countries are ranked by their ability to maintain low marginal tax rates while minimizing economic distortions, thus fostering sustainable growth.
- 2024 Rankings Insights: Estonia ranks highest with a competitive tax code featuring low corporate and individual income tax rates, while Italy ranks lowest due to multiple distortionary property taxes and high VAT rates. The rankings reflect significant disparities in tax policies across Europe, highlighting the need for reforms that prioritize competitiveness and revenue neutrality.
Source Tax Foundation
