Although regulators around the globe contemplated changes to tax policy and rates to stabilize their revenue base in the face of continued economic uncertainty, only 11 percent of 96 countries recorded any change in top personal income tax rates -- and not a single G-20 country reported a change to its top personal income tax rate for the 2011 tax year, according to the most recentKPMG International Individual Income Tax and Social Security Rate Report.

The KPMG report notes thatSpainwas the only country within the world's top 20 economies (defined by GDP) that changed its top personal income tax rate in 2011, with a 2 percent rise for top earners. In contrast, KPMG's report in 2010 revealed nearly twice as many rate changes – 21 overall including changes in four G-20 countries -- versus this year's 11.

"Personal income tax rate discussions have been high on the public agenda in 2011, as many economies continue to address debt concerns and walk a tightrope between further recovery and downturn, but these discussions have not yet translated into rate changes -- particularly in the larger economies," saidBen Garfunkel, national partner in charge of the International Executive Services practice at KPMG LLP, the U.S. audit, tax and advisory firm.

"Tax authorities are trying to identify strategies that successfully balance the pressures to identify and secure greater revenues with the imperative to keep their top personal income tax rates competitive -- so that they can continue to attract top talent and encourage businesses to set up operations in their countries," Garfunkel added.

Most Changes in European Region

The vast majority of rate movement in 2011 came from the European region, according to the KPMG report. Spain created new tax brackets for higher income earners, raising rates at the top end by 2 percent so that income overEUR 175,000is now subject to a 45 percent rate. Ireland, which initiated the upward rate movement trend back in 2009, raised rates for the third consecutive year (a 1 percent increase in 2011), as it continues to seek additional tax revenues.

Under pressure to reduce its budgetary deficit,Luxembourgincreased its top personal income tax rate by raising the unemployment surcharge for high income earners and introducing a crisis contribution tax. When combined, these measures have effectively increasedLuxembourg's top personal tax rates by approximately 3 percent.

The smallCaribbeanisland ofArubahad the highest personal income tax rate at 59 percent. Other countries with high top personal income tax rates includedSweden(57 percent rate),Denmark(55 percent rate),Netherlands(52 percent),Austria(50 percent),Belgium(50 percent rate) theUnited Kingdom(50 percent), andJapan(50 percent).

"It appears thus far that many regulators are proceeding cautiously when it comes to top personal income tax rates, sensitive to the political and social impact that changes may have on their country's plans to recover fiscal vitality," said Garfunkel.

Report's Broader Findings

The KPMG report's broader analysis also compared both effective income tax and social security rates onUSD 100,000andUSD 300,000of gross income. Effective rates are derived by taking total taxes over gross income prior to any deductions (which may include social security) to allow for a better comparison, as deductions can vary greatly across countries.

Some of these findings include:

• Belgiumhad the highest combined effective personal income tax and employee social security rate onUSD 100,000(48 percent) and US 300,000 (55 percent) of gross income.
• Francecontinued to have the highest combined employee and employer social security rate at over 50 percent of earnings, withBelgiumthe next highest at 48 percent.
• Over one-third of the countries in the KPMG study had combined employer and employee social security-based effective tax rates of above 20 percent onUSD 100,000of gross income.