Apologies for cross-posting
28/02/2007 - The OECD's annual compendium of tax data shows little change in
levels of taxation on wage earners in different OECD countries, with Turkey,
Poland and France levying the most on a single-earner married couple with two
children on average earnings and Ireland, New Zealand and Iceland taking the
least.
Taxing Wages compares the shares of employee earnings taken by governments in
OECD countries through taxation by calculating what it calls the 'tax wedge',
the difference between labour costs to the employer and the net take-home pay
of the employee, including any cash benefits from government welfare
programmes. The overall cost of employment is a key factor in companies'
hiring decisions, and thus, indirectly, a factor affecting unemployment
trends.
These tax wedges result from the combined effects of a range of policy
instruments at the disposal of governments: personal income tax, employee and
employer social security contributions, payroll taxes and cash benefits.
Variations in their levels reflect the differing priorities of governments
and voters in different countries with respect to the desired level,
composition and financing method of government expenses, including social
benefits.
In 2006, the average tax wedge for single persons without children fell in
only 8 OECD countries while it rose in 18 OECD countries. Changes have been
minimal in most cases, however. From 2005 to 2006, the tax wedge rose by more
than one percentage point only in the Netherlands, due to a reform of the
health insurance system, and Japan. It fell by more than one percentage point
only in the Czech Republic.
Just over two thirds of the OECD's 30 member countries have statutory minimum
wages, and in just over half of these countries minimum wages have risen
slightly faster than average wage levels in recent years. (A significant
exception is the U.S., where real earnings of workers earning the minimum
wage have dropped significantly.) Social contributions and payroll taxes add,
on average, around 18% to the cost of employing minimum-wage workers.
For details go to:
http://www.oecd.org/document/9/0,2340,en_2649_201185_38168393_1_1_1_1,00.html
More on www.oecd.org/ctp/taxingwages
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