Tax policy analysis

Tax Burdens trends 2000 - 2011

 

 

Tables II.1 to II.8. present the evolution of the tax burden for the eight family types over the period 2000 to 2011. Each of the Tables 1 to 8 corresponds to a particular family type and is divided into three parts.

  • Part a.- tables containing the (average) tax wedge comprising income taxes plus employee and employer social security contributions (including any applicable payroll taxes) less cash benefits,
  • Part b.- tables providing the (average) burden of personal income taxes, and the
  • Part c.- tables depicting the (average) burden of income taxes plus employee social security contributions less cash benefits (net personal average tax rates).

 The section will focus on the main observable trends over part a.-tables. Discussions on parts b. and c.-tables can be found in Taxing Wages.

 

Trends in tax wedge as % of total labour costs

(definition of the tax wedge)

(part a.-tables)

 

The OECD average tax wedge has declined between 2000 and 2011 for each of the selected family types.

There are thirteen OECD member countries with a reduction of more than five percentage points between 2000 and 2011 for at least one of the family types – Australia, Canada, Denmark, Finland, Hungary, Ireland, Israel, the Netherlands, New Zealand, Poland, the Slovak Republic, Sweden and the United Kingdom.

  • The largest decline is observed in Ireland where single parents have benefited from a reduction in the wedge of 23.7 percentage points. Married couples with two children on average earnings and 133 per cent of it in Ireland also enjoyed reductions of 8.4 and 7 percentage points respectively.
  • In New Zealand married couples with two children earning the average wage level and single parents at 67 per cent of the average wage level enjoyed a reduction of more than 14 percentage points in the wedge. 

 

A reduction of seven percentage points or more in the tax wedge for at least one family-type was observed in six countries - Australia, Hungary, Israel, the Netherlands, Sweden and the United Kingdom.

  • In Australia, the largest decreases were for the single parents earning 67 percent of the average wage level and the one-earner married couples with children at the average earnings (-9.5 and -8.2 percentage points respectively).
  • In Hungary, all the family types saw reductions of 5.3 percentage points or more. Decreases of more than 10 percentage points were observed in households with children: the single parents earning 67 per cent of the average wage level (-13.8 percentage points), the one-earner married couples at average earnings (-11.1 percentage points) and the two-earning married couples where the spouse is earning 33 per cent of the average wage level (-10.5 percentage points).
  • In Israel, the tax wedge decreased by more than 7 percentage points for all the household types except for the single parent earning 67 per cent of the average wage level (-1.62 percentage points).
  • In the Netherlands, single parents earning 67 per cent of the average wage level (-14.8 percentage points) and single workers earning 67 per cent of the average wage (-9.1 percentage points) benefited most from the reduction in the tax wedge.
  • In Sweden, all but one of the families enjoyed a reduction in the tax wedge of 7 to 8 percentage points, the exception being the single workers earning 167 per cent of the average wage level (-4.9 percentage points). In the United Kingdom, only the single parents earning 67 per cent of the average wage benefit from a reduction of more than 7 percentage points of the tax wedge (-7.9 percentage points).
  • In Iceland the single worker earning 167 per cent of the average wage level enjoyed a reduction in the tax wedge (-1.3 percentage points), while the tax burden increased by more than 5 percentage points for all the other family types and notably by 12.8 percentage points for the single parents earning 67 per cent of the average wage. .

 

The tax wedge has decreased for all family types in sixteen of the OECD member countries (Australia, Belgium, Canada, Denmark, Finland, Germany, Hungary, Israel, Luxembourg, New Zealand, Poland, the Slovak Republic, Slovenia, Sweden, Switzerland and the United States) while it has increased across all family types in four countries (Austria, Korea, Mexico and Spain).

 

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 II.1a. Income tax plus employee and employer contributions less cash benefits, single persons, 67% of average earnings (as % of labour costs, single persons without children)

 

Table II.2a. Income tax plus employee and employer contributions less cash benefits, single persons, 100% of average earnings (as % of labour costs, single persons without children)

 

Table II.3a.Income tax plus employee and employer contributions less cash benefits, single persons, 167% of average earnings ( as % of labour costs, single persons without children)

 

Table II.4a. Income tax plus employee and employer contributions less cash benefits, single parent at 67% of average earnings (as % of labour costs, single parent with two children)

 

Table II.5a. Income tax plus employee and employer contributions less cash benefits, married couple at 100% of average earnings (as % of labour costs, one-earner married couple with two children)

 

Table II.6a. Income tax plus employee and employer contributions less cash benefits, married couple at 100% and 33% of average earnings (as % of labour costs, two-earner married couple with two children)

 

Table II.7a. Income tax plus employee and employer contributions less cash benefits, married couple at 100% and 67% of average earnings (as % of labour costs, two-earner married couple with two children, one at 100% average earnings and the other at 67%)

 

Table II.8a. Income tax plus employee and employer contributions less cash benefits, married couple at 100% and 33% of average earnings (as % of labour costs, two-earner married couple with no children)

 


More Information

Comparative analyses comparing country data can be found on our free online database Taxing Wages comparative data

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:

 

Back to the Taxing Wages home page

 

 

 

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