A Comparative Study of Tax Misery and Tax Happiness in Transition Economies and the European Union

Each May, Forbes magazine publishes a study on tax misery. The Forbes Tax Misery Index is a proxy for evaluating whether tax policy attracts or repels capital and talent. It is computed by adding the top marginal tax rate for the corporate income tax, individual income tax, wealth tax, employer's and employee's social security tax and value added tax (VAT). The higher the total, the more the misery. Some taxes are omitted, such as the real and personal property tax and excise taxes. The 2007 Index was used for this study. Fifty-six countries are ranked. The present study examines the data for the transition countries from Eastern and Central Europe and the former Soviet Union that were included in the Forbes study, plus China. Comparisons are then made with European Union countries to determine which set of countries has to endure the most tax misery