OECD Economic Outlook 69 - Biblioteca Hegoa

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Per cent 60 50 40 30 20 10 0 Figure V.4. Tax wedges on labour, 20001 As a percentage of gross labour costs2 Figure V.4. Tax wedges on labour, 20001 As a percentage of gross labour costs2 Figure V.4. Tax wedges on labour, 20001 As a percentage of gross labour costs2 Personal income tax Employee's social security contributions Employer's social security contributions low-skill) labour with other production factors, downsizing of activity or relocation of activity to countries that offer lower labour costs for a given level of skills and competencies. At the same time, where tax and social security contributions are shifted back into wages they may generate disincentives to seek work or raise work effort. If tax enforcement is weak, firms and workers may also drift into the “informal” economy. Concerns about excessive labour costs have prompted initiatives in several EU countries (Belgium, France, Greece, the Netherlands, Spain and the United Kingdom) to cut social security contributions at the bottom end of the pay scale. 15 Such measures have generally been found to be effective in terms of creating job opportunities for low-skilled workers. Several countries, including some in the European Union, have also introduced earned-income tax credits to strengthen incentives for participation in work at low levels of wage earnings, following the example of the United States (Canada, Finland, France, Greece, Ireland, New Zealand and the United Kingdom). This is found to be particularly effective in encouraging labour supply if combined with a minimum wage at a reasonable level, as this limits the extent to which the incidence of the tax credit might be transferred from the worker to their employer. A drawback is that incentives for additional work effort at income levels in the abatement range are reduced (the credit is phased out as earnings approach a statutory threshold). Careful design can help avoid this, but much depends on the shape of the earnings distribution – if this is narrow, the phase-out problem is markedly more difficult to deal with – as well as the overall level of taxation – if this is high, marginal effective tax rates in the phase-out range may become prohibitive. 16 Challenges for tax policy in OECD countries - 179 OECD unweighted average Belgium Belgium Belgium Hungary Hungary Hungary Germany Germany Germany Sweden Sweden Sweden France France France Finland Finland Finland Italy Italy Italy Austria Austria Austria Netherlands Netherlands Netherlands Denmark Denmark Denmark Czech Czech Czech Republic Republic Republic Poland Poland Poland Turkey Turkey Turkey Spain Spain Spain Norway Norway Norway Greece Greece Greece Luxembourg Luxembourg Luxembourg Portugal Portugal Portugal Canada Canada Canada United United United States States States United United United Kingdom Kingdom Kingdom Switzerland Switzerland Switzerland Ireland Ireland Ireland Iceland Iceland Iceland Japan Japan Japan Australia Australia Australia New New New Zealand Zealand Zealand Korea Korea Korea Mexico Mexico Mexico 1. For a single individual at the income level of the average production worker. Data for 2000 are based on estimated wage levels of the average production worker. 2. Gross wage plus employers' contributions. Source: OECD, Taxing Wages, 1999-2000. 15. See for details Joumard (2001), op. cit. 16. See: Bassanini et al. (1999) and Pearson and Scarpetta (2000). … and efforts to ease this problem have proved beneficial © OECD 2001
180 - OECD Economic Outlook 69 Progressive income taxation faces difficult trade-offs between efficiency and equity Rate differentiation in indirect taxation often removes neutrality and is not well-suited for income redistribution purposes Taxing electronic commerce in a neutral way is an emerging challenge Progressive income taxation is aimed at enhancing the fairness of income tax systems but also strengthens incentives for tax minimisation to the extent that high-income taxpayers are able to benefit from tax reliefs, via the purchase of pension annuities, housing or other tax-favoured assets (see above). Moreover, although not a large-scale problem yet, top income earners may become more prone to labour mobility vis-à-vis other countries where income taxation at the top end of the income distribution is lower. Maintaining strongly progressive tax rates under such conditions frustrates economic efficiency without gaining much in terms of equity. There is scope for governments to continue their ongoing efforts to reduce marginal tax rates at the top end while broadening the base by limiting tax reliefs, especially in countries where the pre-tax income distribution is narrow. Indeed, as opportunities for economic and social mobility of individuals increase, horizontal equity (ensuring that people in the same economic position pay the same amount of tax) may gradually take precedence over vertical equity (requiring that people on higher incomes pay a higher proportion of their income in tax) as a means to promote fairness. All but one OECD country have introduced a value-added tax (VAT). This may have simplified the tax rate structure, but rate differentiation and exemptions still imply a lack of neutrality in most countries. This reflects the fact that these structures have not been dictated purely by tax considerations but also by other, often complex, social and historical factors. They may also be motivated by industrial policy objectives (e.g. to favour the tourism industry), but, since they usually favour specific producer interests, lobbying activity can influence the assessment of their merits. VAT exemptions for small companies are intended to facilitate compliance, but recent experience in some countries (e.g. Italy) has shown that requiring small (nonincorporated) companies to register for VAT may be a more effective way to encourage overall compliance with the tax code. Low or zero indirect tax rates and exemptions may also be motivated by concerns over indirect taxation hitting disadvantaged groups heavily. However, these policies are rarely successful in alleviating such concerns because consumption patterns of basic goods and services (to which lower rates mostly apply) vary rather little across income groups. 17 Targeted help, for example cash payments (including child benefits) or vouchers for basic staples, could be a more cost-effective way to assist people on low incomes, although there is a need to take account of possible problems: low take up, increased effective marginal tax rates and high administrative costs. Electronic commerce continues to grow rapidly, 18 but this new way of doing business also presents certain challenges to established tax policy principles and to effective tax collection, particularly in terms of ensuring a similar tax treatment of electronic traders as compared to more traditional businesses. Specific problems arise in connection with supplies to final consumers and businesses that are not registered for VAT, where there is little incentive for suppliers to fulfil their VAT obligations in relation to such sales. It is important that taxation rules continue to apply fairly and consistently, and with predictable outcomes internationally, so as to avoid distortions. OECD countries are working, in partnership with the international business community and with many non-member economies, to implement the core principles set out in the Ottawa Taxation Framework Conditions. 19 They point, in short, 17. See for example Figure VI.3 in Chapter VI, “Encouraging environmentally sustainable growth: experience in OECD countries”, which broadly confirms this in the case of household energy consumption. 18. See OECD (2000b). 19. OECD (2001).
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OECD Economic Outlook ECONOMICS «
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OECD ECONOMIC OUTLOOK 69 JUNE 2001
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FOREWORD This edition of the OECD E
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TABLE OF CONTENTS Editorial .......
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Table of contents - vii I.5. Profit
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EDITORIAL Economic growth in the OE
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ingness to liquidate insolvent bank
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2 - OECD Economic Outlook 69 Weakne
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4 - OECD Economic Outlook 69 Easier
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6 - OECD Economic Outlook 69 Box I.
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8 - OECD Economic Outlook 69 ... wh
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10 - OECD Economic Outlook 69 Curre
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12 - OECD Economic Outlook 69 Decem
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14 - OECD Economic Outlook 69 The s
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16 - OECD Economic Outlook 69 Per c
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20 - OECD Economic Outlook 69 … b
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24 - OECD Economic Outlook 69 Falli
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26 - OECD Economic Outlook 69 Unite
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28 - OECD Economic Outlook 69 Monet
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30 - OECD Economic Outlook 69 Box I
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34 - OECD Economic Outlook 69 The f
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36 - OECD Economic Outlook 69 Monet
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38 - OECD Economic Outlook 69 More
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40 - OECD Economic Outlook 69 ... w
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42 - OECD Economic Outlook 69 … w
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II. DEVELOPMENTS IN INDIVIDUAL OECD
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1998 1999 2000 2001 2002 Household
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the long-run tax cut will be introd
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Japan: Employment, income and infla
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Japan: External indicators 1998 199
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Germany Developments in individual
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1998 1999 2000 2001 2002 Household
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France Developments in individual O
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1998 1999 2000 2001 2002 Household
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Italy Developments in individual OE
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1998 1999 2000 2001 2002 Household
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United Kingdom Developments in indi
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1998 1999 2000 2001 2002 Household
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Canada Developments in individual O
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1998 1999 2000 2001 2002 Household
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86 Australia Developments in indivi
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cially after the RBA’s recent int
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Austria: Demand, output and prices
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Belgium Developments in individual
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contribution of net exports to grow
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Czech Republic: Demand, output and
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Denmark Developments in individual
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hold incomes recover. Although expo
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Finland: Demand, output and prices
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Greece: Demand, output and prices 1
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Hungary: Demand, output and prices
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Iceland: Demand, output and prices
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Ireland: Demand, output and prices
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Korea Developments in individual OE
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Luxembourg Developments in individu
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Mexico Developments in individual O
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Netherlands Developments in individ
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age this year, mainly reflecting ta
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New Zealand: Demand, output and pri
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Norway Developments in individual O
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There are substantial risks to the
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Poland: Demand, output and prices 1
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Portugal Developments in individual
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especially as the deficit has been
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Slovak Republic: Demand, output and
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Page 141 and 142: Sweden Developments in individual O
Page 143 and 144: Despite recent indicators suggestin
Page 145 and 146: Switzerland: Demand, output and pri
Page 147 and 148: Turkey: Demand, output and prices 1
Page 149 and 150: III. DEVELOPMENTS IN SELECTED NON-M
Page 151 and 152: Substantial progress has been made
Page 153 and 154: with a 7 per cent increase in urban
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Page 157 and 158: IV. FISCAL IMPLICATIONS OF AGEING:
Page 159 and 160: Third, in any case, projections ove
Page 161 and 162: The baseline projections for public
Page 163 and 164: Old-age pension spending Levels of
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Page 167 and 168: Fiscal implications of ageing: proj
Page 169 and 170: ment is to be maintained for all. F
Page 171 and 172: Table IV.5. Changes in spending, re
Page 173 and 174: The projected deterioration in the
Page 175 and 176: Fiscal implications of ageing: proj
Page 177 and 178: period (Table IV.6, Panel B). This
Page 179 and 180: BIBLIOGRAPHY Fiscal implications of
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Page 217 and 218: BIBLIOGRAPHY Encouraging environmen
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Page 233 and 234: 224 - OECD Economic Outlook 69 List
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Page 237 and 238: Annex Tables Statistical Annex - 22
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© OECD 2001 Average 1973-83 1984 1
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© OECD 2001 Average 1973-83 1984 1
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© OECD 2001 Average 1973-83 1984 1
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© OECD 2001 Average 1973-83 1984 1
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© OECD 2001 Annex Table 11. Output
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© OECD 2001 Annex Table 13. Unit l
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© OECD 2001 Average 1973-83 1984 1
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© OECD 2001 Annex Table 17. Oil an
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© OECD 2001 Average 1973-83 Annex
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© OECD 2001 Annex Table 21. Unempl
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© OECD 2001 Annex Table 23. Labour
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© OECD 2001 Annex Table 27. Gross
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© OECD 2001 Annex Table 29 . Gener
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© OECD 2001 Annex Table 31. Genera
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© OECD 2001 1983 1984 1985 1986 An
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© OECD 2001 Annex Table 39. Effect
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© OECD 2001 Annex Table 41. Import
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© OECD 2001 Annex Table 43. Import
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© OECD 2001 1983 1984 1985 1986 An
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© OECD 2001 Annex Table 47. Shares
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© OECD 2001 Annex Table 49. Non-fa
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© OECD 2001 Annex Table 51. Curren
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© OECD 2001 Annex Table 53. Struct
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Annex Table 54. (cont'd) Semiannual
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Annex Table 56. Contributions to ch
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Annex Table 57. Household wealth an
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Annex Table 61. Monetary and credit
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Annex Table 63. Geographical struct
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OTHER OECD STATISTICAL SERIES ON DI
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For customers in Austria, Germany a
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