Lets determine the best Horror game on steam! I'm going to go with Spooky's Jumpscare Mansion. It's free, it's spooky, and it's just downright silly, but is super-effective!
In terms of the best horror games on Steam, the ones that come to my mind are Alien: Isolation, SOMA, and Amnesia: The Dark Descent. Though choosing between the three of them is difficult mainly due to the fact they have a variety of features and content that make worthy horror games.
Not the BEST horror game, but Monstrum is really fun. You have to escape a boat from one of three possible monsters each with their own different abilities.
I personally bet my money on the Outlast and Resident Evil series, they're two heavily atmospheric games involving evil corporations, fucked up experiments and interesting plots.
Games that scared me the most were probably: Silence of the Sleep, Outlast, Doki Doki Literature Club, and Slender.