Tax burden increasing for workers: OECD

The average tax and social security burdens on families rose in most countries last year, reversing a trend of declining tax burdens, the OECD said in a report Wednesday. The annual report called for the emphasis to go more on indirect taxes and on broadening the income tax net rather than by increasing the direct tax burden levels.
The Organisation for Economic Co-operation and Development's report on income taxes revealed that the tax burden rose in 22 of the 34 OECD countries. "The Netherlands, Spain and Iceland were among the countries experiencing significant increases, while Denmark, Greece, Germany and Hungary were among those showing the biggest drops," the organisation of advanced economies said in its report.
In most cases any rise in the reported tax burden was relatively small. The average tax wedge for OECD countries was 24.8 percent, for couples with two children earning the average wage, but there were wide differences globally. At the bottom end of the scale, a New Zealand family fitting into this bracket had a negative tax burden - -1.1 percent - followed by Chile (6.2 percent), Switzerland (8.3 percent) and Luxembourg (11.2 percent). Belgium, France and Germany had the highest tax burdens for single workers without children on average wages, at 55.4 percent, 49.3 percent and 49.1 percent respectively, although the tax wedge dropped in Germany in 2010.
In general "the average tax and social security burdens on employment incomes rose in most countries in 2010, reversing a trend toward declining tax burdens seen in previous years," the OECD said. As part of efforts to restore public finances and put economies back on track following the global economic crisis "governments should consider shifting the tax mix away from direct to indirect taxes," it added, meaning broadening sales taxes on consumer products and raising property taxes, rather than increasing personal income tax rates and social security charges.