Sterling Heights, Michigan (PRWEB) November 23, 2016
High net worth individuals in the US are among those who have benefited the least from global reductions in income taxes over the past two decades, according to a new study by UHY, the international accounting and consultancy network.
Their research reveals that the effective income tax rate for the US’ taxpayers earning $1 million has fallen at a slower rate (down just 2 percentage points - from 37% in 1996 to 35% today) than the global average (down 5.6 percentage points from 41.4% to 35.8%) in the last twenty years.
Income tax cuts in the US have also been far less substantial than in most other G7 economies, which have seen average tax rate reductions of 5 percentage points since 1996 - from 48% to 43%.
This puts the US amongst the slowest income tax cutting countries in UHY’s study (see attached for table) – although a small number of countries kept their rates the same or raised them. UHY studied tax data in 26 countries across its international network, capturing the effective income tax rate for higher ($1M of earnings) and lower ($30,000) income workers*.
The US’s workers on lower incomes - those earning $30,000 – benefited from more significant tax reductions. They have seen their tax rates fall by 4 percentage points, from 17%, twenty years ago, to 13% today.
Russia has seen the biggest cuts of any major economy for higher earners, who have seen their income tax rate fall by nearly two-thirds (from 35% to 13%).
The UK imposed the biggest increases of any major economy in the study – one of the few countries to increase their rates. British workers earning $1 million saw their tax bills rise by four percentage points over the period, from 39% to 43%.
Comments Dennis Petri, Managing Director at UHY Advisors: “Many governments around the world have focused on easing the tax burden on take home pay in the past twenty years, but the US is not keeping pace with the global average. This risks hampering growth.”
“By failing to make bolder cuts to income tax rates, policymakers may be missing an opportunity to bolster consumer spending power, improve their country’s attractiveness to an increasingly internationally-mobile workforce and boost economic performance.”
He adds: “Such an approach could have contributed more to strengthening the US’ GDP growth in recent decades.”
“Looking forward, President-elect Donald Trump’s tax plan looks to reduce taxes across the board, but before any proposed changes can be made, they must be approved by Congress.”
UHY’s data also reveals the extent of global economies’ GDP growth in the last thirty years, since the UHY network was founded in 1986.
Their figures show that the US’ GDP has grown by 116% in the past thirty years, compared to the global average of 135% GDP growth (see third table attached). The G7 average was 87%.
About UHY LLP
UHY LLP, a licensed CPA firm, provides audit and other attest services to publicly traded, privately owned and nonprofit organizations in a number of industry sectors. UHY Advisors provides tax and advisory services to entrepreneurial and other organizations, principally those enterprises in the dynamic middle market.
UHY LLP, operating in an alternative practice structure with UHY Advisors, forms one of the largest professional services firms in the US. While that scale might provide confidence for some clients, others tell us our greatest value is the way we bring these resources to bear to help address today’s evolving business challenges. It’s a philosophy we call “The Next Level of Service”. To learn more visit http://www.uhy-us.com.
All of the above entities are members of UHY International (“UHYI”), a worldwide network of independent professional services firms that provide audit, tax and advisory services around the globe. UHYI is ranked among the top international accountancy networks and a proud member in good standing of the Forum of Firms. Collectively, our US operating entities (UHY LLP and UHY Advisors) are the largest independent members of UHYI with significant participation, bringing the power of our international network to serve the individualized needs of our clients.
About UHY, the network
Established in 1986 and based in London, UK, UHY is a network of independent audit, accounting, tax and consulting firms with offices in over 296 major business centres across more than 89 countries. Our staff members, over 7,660 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to http://www.uhy.com.
UHY press contact: Dominique Maeremans on +44 20 7767 2621 Email: d.maeremans(at)uhy.com
UHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit http://www.forumoffirms.org.
UHY is an international association of independent accounting and consultancy firms, whose organizing body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. Services to clients are provided by the UHY member firms and not by Urbach Hacker Young International Limited. Neither Urbach Hacker Young International Limited nor any member of UHY has any liability for services provided by other members.