Lowest-cost tax structures that favor businesses.

• Position: TAX

In Competitive Alternatives 2008, KPMG compares business costs and competitiveness for more than 100 cities in 10 countries in North America, Europe and Asia Pacific. These include: Australia, Canada, France, Italy, Japan, Germany, Mexico, the Netherlands, the United Kingdom and the United States.

Compared are aspects of the business environment, such as labor availability and skills, economic conditions and markets, innovation, infrastructure and the regulatory environment, as well as personal factors, such as cost of living and quality of life. The results are available at www.CompetitiveAlternatives.com.

Among those studied, Mexico represents the lowest-cost country, with a business cost advantage of 20.5 percent, on average, relative to the U.S. baseline. Canada, the U.S. and Australia are the cost leaders among the nine established industrialized countries examined with less than 1 percent separating them.

Cost Structure: Among key findings on the 10 countries against the U.S. benchmark: France ranks fifth; it has the lowest cost structure among the European countries with costs 3.6 percent higher; The U.K., the Netherlands and Italy costs are between 7.1 percent and 7.9 percent above; Japan, at 14.3 percent, and Germany, at 1.8 percent, have the highest cost structures.

Cost Trends: the U.S. has experienced the greatest gain in cost competitiveness since 2006 as the value of the U.S. dollar has declined. Canada and Australia have lost advantages relative to the U.S. but...