The report correctly assigns a lower score to countries with high marginal tax rates, as these damage incentives and lead to a variety of distortions. Sweden, which rates surprisingly well on the index overall, coming in 4th, is dragged down by the fact that it still levies the highest top combined marginal income tax rate, hitting almost 57pc (this is much less than used to be the case, though the new government may sadly decide to reverse some of that progress). Hungary has the lowest top rate of income tax at just 16pc, the report states. It calculates that America’s top marginal income tax rate is now more than 46pc, a full five points above the OECD average.