Ageing and welfare reform in the Nordic Countries, 1990-2010 ...

Table 4. Income taxes 1) 2010, as per cent of gross labour costs, in selected countries.Family Type: Single, no children Married, 2 ch Progressivity167% - 67%Wage level (% of AW):67 % AW 100 % AW 167 % AW 100%+67 % AWAWChange inprogressivity2000-2010EU-15 2) 37,2 41,3 46,7 35,5 9,5 +1,1Sweden 40,6 42,7 50,8 38,5 10,2 +3,1Finland 36,3 42,0 47,9 36,5 11,6 +2,9Denmark 36,7 38,3 44,5 33,7 7,8 -2,8Norway 33,7 36,8 42,6 32,9 8,9 -1,2Iceland 25,2 31,3 36,1 26,7 10,9 -7,3Belgium 49,5 55,4 60,6 47,8 11,1 -0,2France 45,5 49,3 53,2 44,3 7,7 +3,4Germany 44,9 49,1 51,5 41,4 6,6 -2,2Austria 43,3 47,9 50,4 40,0 7,1 -0,1Netherlands 33,7 38,4 42,3 32,1 8,6 +5,8Luxembourg 27,5 34,0 41,4 20,9 14,0 -0,1Italy 43,6 46,9 52,1 42,1 8,5 +1,0Spain 36,4 39,6 42,5 36,6 6,1 -0,1Portugal 32,8 37,7 43,8 33,1 11,0 +1,9Greece 34,4 36,6 41,9 35,7 7,5 +2,6Hungary 43,6 46,4 52,7 39,2 9,2 +1,4Slovenia 38,5 42,4 47,3 33,8 8,8 +0,4Czech Republic 38,9 42,2 44,7 34,4 5,8 +2,3Slovak Republic 34,5 37,8 40,2 31,2 5,7 +1,1Estonia 38,6 40,0 41,2 35,5 2,6 -0,1Poland 33,3 34,3 35,0 30,8 1,7 -0,4United Kingdom 29,6 32,7 37,5 28,8 7,8 +1,2Ireland 23,4 29,3 39,9 21,1 16,6 +1,7Switzerland 17,8 20,8 25,0 14,3 7,2 +0,1Turkey 35,0 37,4 40,4 37,6 5,4 +9,5United States 27,5 29,7 35,2 24,9 7,7 -0,8Japan 29,1 30,5 33,5 25,2 4,4 -0,81) Income taxes & employer+employee contributions less cash benefits as % of gross labour costs. 2009.2) Simple (unweighted) average.Source OECD (2010c: Table I.1.)Although income taxes were reduced, progressivity (as indicated by differences in average taxes fora low paid and a high paid worker) did not decrease in Finland and Sweden. On average, the Nordictaxes are no longer more progressive than in other European countries. A European convergence inencountered as regards progressivity of taxes on wages.Marginal taxes have been cut quite significantly in the Nordic countries over the last 20 years. By2010, average and marginal taxes on labour power in the Nordic countries are comparatively low. 2222 This tends to increase inequality. But less than one might believe, and the impact on equality is rather complicated tocalculate due to rather ”technical” problems. For instance, some countries include imputed rent as income which meansthat the reported income inequality fluctuates with house prices; it takes a rather detailed decomposition to identify theimpact of tax reforms.18