Also, in many EU states, companies contribute to social security. In some this is indexed to profits, but on others this is indexed directly to wages, so if you count that bit, taxes directly attributable to your income can easily exceed 60% of what a company pays out.
I don't know if Belgium is using that loophole when counting the 60%, though.
I have no idea about this. Can you explain what you mean and give some examples of such countries ?
>Also, in many EU states, companies contribute to social security. In some this is indexed to profits, but on others this is indexed into wages, so if you count that bit, taxes directly attributable to your income can easily exceed 60% of what a company pays out.
True. Some EU countries also tax the gross salary the employer has to give you before it gets to you, which is in bad faith not included in payslips. So when you negotiate your 60k gross wage, it's actually costing your employer something like 72k Euros. I hate this shady practice.
Probably countries like Ireland, Montenegro, Belize, etc which act as tax havens for foreign corporations. Or Singapore, while also a tax haven, acts as a center for regional trade.
They could also mean resource rich countries that sell mineral rights to foreign corporations, who made investments in infrastructure in order to facilitate their operations, and they pay back dividends to the state, which offset the tax burden of the local population.
Their inward FDI stock to GDP ratio is around 250%, which is about 4× the EU average; and Ireland does this with a decently sized economy.
And then there's Luxembourg (1400%) and Malta (2000%) which arguably do much “worse” but are comparatively tiny.
I didn't do the math for every EU country. Those were just some of the few that came to mind. For instance, Cyprus has similar values to Ireland, but the Irish economy is 15× bigger.
When there's a lot of foreign money going through your economy and you can tax it to moderate amounts, you get to offer lower rates to your own citizens.
Which is great, but obviously doesn't scale if every country tries to do the same.