28th April 2014
Twenty-five out of the 34 OECD countries have seen personal income tax increases over the last three years.
New figures have shown that countries are lowering the value of tax-free allowances and tax credits. Indeed, in the majority of states, higher proportions of earnings are now subject to tax.
Portugal was found to have the greatest tax burdens on labour rates in 2013, thanks to higher statutory rates.
Higher employer social security contributions in the Slovak Republic meant the country also found itself among those nations with the greatest tax.
Meanwhile, the United States was found to be subject to high taxes due to the expiry of previous reductions in employee social security contributions.
Across the OECD, it was found the average tax burden on employment incomes increased by 0.2 per cent in 2013 to 35.9 per cent.
Nevertheless, it was deemed that the design and interaction of personal income tax systems, social security contributions and benefit systems have become more progressive for low-income households across the OECD.
"This is principally attributed to growth in targeted tax credits or “make-work-pay” provisions for low-income workers, as well as increased child benefits for low-income households," the OECD explained.
However, the progressiveness of taxation for single workers without children or those with higher income levels has seen little change.
Ireland, Sweden and Slovenia were named as the most progressive for single taxpayers without children.
At the other end of the scale, Germany, Hungary and Israel each recorded decreases.
The highest average tax burden for single workers earning an average wage was found in Belgium, at 55.8 per cent, followed by Germany (49.3 per cent), Austria (49.1 per cent), and Hungary (49 per cent).
The increase in the average OECD "tax wedge" was the result of personal income tax, while reductions in employer social security contributions and personal income tax were cited as the driving factors behind decreasing tax levels in certain countries.