The Greek tax burden… weight on those married with kids!

Taxes on wages rose by 1% for the average worker in OECD countries between 2010 and 2014, even though the majority of governments did not increase statutory income tax rates, according to the new OECD report on tax burdens.

The tax burden on labor income, expressed by the tax wedge, measures tax burden on labor income borne by the employee and employer. Greece is ranked 14th of the 34 OECD member countries in decreasing order with a tax wedge for an average single worker at 40.4% in 2014 compared to the OECD average of 36%.

In Greece, employee and employer social security contributions combine to account for 83% of the total tax wedge compared with 63% of the total OECD average tax wedge.

The tax wedge for a worker with children differs from the tax wedge of a worker on the same income without children since many OECD countries provide benefits to families with children through cash transfers and preferential tax provisions.

Greece had the highest tax wedge in the OECD for an average married worker with two children at 43.4%. the OECD average was 26.9%.

Child-related benefits and tax provisions meant that in 2014, the average tax wedge for married workers with two children was 9.1% less than for the average single worker. In contrast, Greece is the only OECD country where the tax wedge of a family with children is higher (3%) after cash transfers and tax provisions are taken into account.