The International Tax Competitiveness Index
(ITCI) seeks to measure the extent to which a
country’s tax system adheres to two important
aspects of tax policy: competitiveness and
neutrality.

A competitive tax code is one that keeps
marginal tax rates low. In today’s globalized
world, capital is highly mobile. Businesses can
choose to invest in any number of countries
throughout the world to find the highest rate
of return. This means that businesses will
look for countries with lower tax rates on
investment to maximize their after-tax rate of
return. If a country’s tax rate is too high, it will
drive investment elsewhere, leading to slower
economic growth. In addition, high marginal tax
rates can lead to tax avoidance