April 14, 2015

DON'T TAX WHAT YOU DO WANT:

Taxes on Employment Continue to Rise (PAUL HANNON, 4/14/15, WSJ)

Governments in developed economies raised taxes on employment for the fourth straight year in 2014, although at a slower pace, as they strove to cut their budget deficits without doing too much harm to economic and jobs growth, the Organization for Economic Cooperation and Development said Tuesday.

Releasing its annual Taxing Wages report, the Paris-based research body said the tax wedge rose in 23 of its 34 members during 2014, fell in nine and was unchanged in two. The tax wedge is the difference between what businesses pay to employ a worker, and what that worker receives after income taxes and social security contributions from both employers and workers.

On average the tax wedge rose to 36.0% of the cost of employing an unmarried worker without a child, from 35.9% in 2013. In the decade to 2010, the tax wedge fell steadily, but that trend reversed as governments sought to shore up revenues as their debts soared in the years following the financial crisis.

It's impossible/inevitable that taxes on employment will be replaced by consumption taxes.

Posted by at April 14, 2015 8:44 AM
  

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