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Countries With the Highest Income Tax Rates

Photo: Scott Smith | Getty Images

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10. Ireland

Highest income tax rate: 48%
Average 2010 income: $50,400

Ireland’s tax rate of 48 percent is much higher than the 40 percent average in Northern Europe. In fact, Northern Europe is the region with the world's second-highest personal income tax rates, according to KPMG.

The Irish government, which has been trying to bridge a big fiscal gap after the financial crisis, raised the top rate by one percentage point for a third-consecutive year in 2011.

The country’s top marginal rate kicks in at about $43,900 of taxable income. Citizens also have to pay an additional social security tax of 4 percent. The government increased tax rates that apply to gifts and inheritances as well as capital gains from 25 percent to 30 percent in December. While income taxes are high, the country has among the lowest corporate tax rates in Europe of just 12.5 percent.

As part of the latest austerity measures,the government has introduced a homeowner tax of 100 euros or $132 per household tax this year. But the government has struggled to collect the fee with only one-third of homeowners paying up by the March 31st deadline. Thousands of protesters have demonstratedagainst the new property tax in Ireland’s capital, Dublin, in the last two months. The tax is expected to rise dramatically next year once Ireland starts to vary the charge based on a property’s value.

Pictured left: The streets of Dublin

Photo: Scott Smith | Getty Images