Consumption Taxation as an Additional Burden on Labour Income
AbstractThe OECD’s Taxing Wages (TW) Report1 provides details of taxes paid on wages in the 34 OECD member countries. In particular, it covers the personal income tax and social security contributions paid by employees and their employers, as well as cash benefits received by families. The Report calculates the average and marginal tax burden on labour income for taxpayers at different income levels and with different family characteristics (single taxpayers and married couples with or without children). The aim of this paper is to explore the possible consequences of broadening the TW model by introducing consumption taxes, and so include the taxes that workers pay when they spend their wages in addition to the taxes that are paid when they earn them. This has been done by using micro data from Household Budget Surveys provided by several OECD countries and Eurostat, to simulate consumption taxes for families with similar characteristics to the eight types defined in Taxing Wages.
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Bibliographic InfoPaper provided by OECD Publishing in its series OECD Taxation Working Papers with number 7.
Date of creation: 03 Nov 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-11-07 (Accounting & Auditing)
- NEP-ALL-2011-11-07 (All new papers)
- NEP-LAB-2011-11-07 (Labour Economics)
- NEP-PUB-2011-11-07 (Public Finance)
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- Nico Pestel & Eric Sommer, 2013.
"Shifting Taxes from Labor to Consumption: Efficient, but Regressive?,"
SOEPpapers on Multidisciplinary Panel Data Research
624, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Pestel, Nico & Sommer, Eric, 2013. "Shifting Taxes from Labor to Consumption: Efficient, but Regressive?," IZA Discussion Papers 7804, Institute for the Study of Labor (IZA).
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