Tax policy analysis

Tax Burdens, 2010 definitive results (and changes to 2011)

 

 

This Section reviews the definitive results for 2010 and changes between 2010 and 2011. It focuses on changes in tax burdens and marginal tax rates for two of the eight family types covered in Taxing Wages- single employees without children at the average wage level (column 2 of the tables) and one-earner married families with two children at the average wage level (column 5 of the tables).

 

Changes in average tax wedge as % of total labour costs

(definition of the tax wedge)

(Table I.1 - xls/50kB and Table I.12 - xls/50kB)

 

In the majority of countries, changes in the gap between total labour costs and the corresponding net take-home pay for a single average worker in 2011 as compared to 2010 were within plus or minus one percentage point.

  • The wedge increased by more than one percentage point in Hungary (2.8 percentage points), Luxembourg (1.7 percentage points) and Portugal (1.4 percentage points).
  • The tax wedge fell by more than one percentage point in New Zealand (-1.1 percentage point). 

 

For one-earner married couples with two children, the  tax wedge also increased in most OECD member countries [26].

  • The wedge increased by more than one percentage point in five countries: Iceland (1.8 percentage points), Ireland (2.4 percentage points), Luxembourg (1.8 percentage points), Portugal (2.3 percentage points) and the Slovak Republic (2.1 percentage points).
  • For this family type, the wedge decreased by more than one percentage point only in Hungary (-3.9 percentage points). 

 

Changes in average personal income tax

(definition of average personal income tax)

(Table I.4 and Table I.15 - xls/50kB)

 

In most OECD member countries, the income tax for single persons at average earnings has changed only slightly between 2010 and 2011.

  • The income tax rate increased by more than one percentage point in Hungary (3.1 percentage points), Ireland (4.2 percentage points), Portugal (1.7 percentage points), the Slovak Republic (1.2 percentage points) and the United States (1.1 percentage points).
  • There was only one country where the income tax rate decreased by more than one percentage point – New Zealand, by 1.1 percentage points. 

 

The average income tax rate for the one earner married couple with two children also increased in most OECD member countries [22] during this period.

  • Increases by greater than one percentage point were observed in five countries, Iceland (1.3 percentage points), Ireland (5.2 percentage points), Portugal (1.6 percentage points), Slovak Republic (2.5 percentage points) and the United States (1.9 percentage points).
  • There were decreases of more than one percentage point in Hungary (-6.1 percentage points) and New Zealand (-1.1 percentage points). 

 

Changes in average employee social security contributions

(definition of average social security contributions)

(Table I.5 - xls/50kB and Table I.16 - xls/50kB)

 

There were only two countries – Ireland (-3.2 percentage points) and the United States (-2.0 percentage points) where there was a change in the average burden of employee social security contributions of more than one percentage point between 2010 and 2011 for either the average single person or the average one earner married couple with two children.

 

Changes in marginal tax wedge as % of total labour costs

(definition of the tax wedge)

(Table I.6 - xls/50kB and Table I.17 - xls/50kB)

 

Changes between 2010 and 2011 in the marginal wedge were generally within the range of plus or minus five percentage points.

  • For a single worker at the average earnings, a change of more than five percentage points was noted only for Ireland (+19.9 percentage points).
  • For a one-earner married couple with two children, there were no changes of more than five percentage points. 

 

Tables & Figures

Below are a list of the tables and figures referred to in the text above. For a full list of tables and figures presented within the 2011 Taxing Wages publication please visit the OECD iLibrary.

Table I.1. Income tax plus employee and employer contributions less cash benefits, 2011 (as % of labour costs, by family-type and wage level)

 

Table I.12. Income tax plus employee and employer contributions less cash benefits, 2010 (as % of labour costs, by family-type and wage level)

 

Table I.4. Income tax, by family-type and wage level, 2011 (as % of gross wage earnings)

 

Table I.15. Income tax, by family-type and wage level, 2010 (as % of gross wage earnings, by family-type and wage level)

 

Table I.5. Employee contributions, 2011 (as % of gross wage earnings, by family-type and wage level)

 

Table I.16. Employee contributions, 2010 (as % of gross wage earnings, by family-type and wage level)

 

Table I.6. Marginal rate of income tax plus employee and employer contributions less cash benefits, 2011 (as % of labour costs, by family-type and wage level)

 

Table I.17. Marginal rate of income tax plus employee and employer contributions less cash benefits, 2010 (as % of gross wage earnings, by family-type and wage level)

 


More Information

Comparative analyses comparing country data can be found on our free online database OECD.StatExtracts, under: Public Sector, Taxation and Market Regulation > Taxation > Taxing wages.

Access to the complete dataset shown in the Taxing Wages report, including detailed country information, is through subscription. For details on how to subscribe please visit our "Getting Online Access" page at the OECD Library website.

 

How to obtain this publication

Readers can access the full version of Taxing Wages 2011 (Special Feature: Trends in personal income tax and employee social security contribution schedules ) by choosing from the following options:

 

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