OECD Tax Policy Studies.

Description

This publication examines the effects of taxation on employment, highlights the resulting policy challenges, and discusses the ways governments endeavour to address these challenges. Chapter 1 provides a broad overview of the effects of taxation on employment, examining how taxes on labour income can affect both the size of the labour force and the level of unemployment, and highlighting key areas of concern for tax policy makers. This analysis is then augmented in chapters 2-4 by the more detailed analysis of the effects of taxation on the employment of three groups where empirical research.  Read more... Foreword Table of Contents Executive Summary Chapter 1. The Effects of Taxation on Employment: An Overview 1.1. Employment in OECD countries Figure 1.1. OECD average unemployment rate (age 15-64): 2000-09 Figure 1.2. OECD average employment-to-population rates (age 15-64): 2000-09 Figure 1.3. OECD average employment-to-population rates (age 55-64): 2000-09 Figure 1.4. OECD average employment-to-population rates (age 25-64) by education level: 2000-08 Figure 1.5. OECD average hours worked per worker per year: 2000-09 1.2. The taxation of labour income in OECD countries. Figure 1.6. Average tax wedge for single individual earning 67% of the average wage: 2010Figure 1.7. Average tax wedge for single individual earning 100% of the average wage: 2010 Figure 1.8. Average tax wedge for single individual earning 167% of the average wage: 2010 Figure 1.9. Marginal tax wedge for single individual earning 67% of the average wage: 2010 Figure 1.10. Marginal tax wedge for single individual earning 100% of the average wage: 2010 Figure 1.11. Marginal tax wedge for single individual earning 167% of the average wage: 2010. Table 1.1. Average and marginal tax wedges for eight family types: OECD averages, 2010Consumption taxes Figure 1.12. Average combined (income plus consumption) and income tax wedges for single individual earning 100% of the average wage 1.3. Taxation and unemployment Does tax affect unemployment? Box 1.1. The effect of taxes on unemployment: Theoretical models Box 1.2. Labour taxation, demand shocks and unemployment Empirical results 1.4. Taxation and labour supply How do taxes affect labour supply? Empirical results 1.5. Non-labour taxes and employment. 1.6. Key employment-related tax policy challengesLow-income workers: unemployment traps and poverty traps Retirement incentives for older workers Taxing mobile high-skilled workers Second earners Box 1.3. Comparing tax wedges for single individuals and second earners in OECD countries Figure 1.13. Average tax wedge -- Single individual versus second earner income = 67% of AW (primary earner income = 100% of AW) Figure 1.14. Average tax wedge -- Single parent versus second earner (two children) income = 67% of AW (primary earner income = 100% of AW). Figure 1.15. Marginal tax wedge -- Single parent versus second earner (two children) income = 67% of AW (primary earner income = 100% of AW) Pricing low-skilled workers back into employment 1.7. Summary and Conclusions Notes Chapter 2. The Taxation of Low-Income Workers 2.1. Trade-offs in designing tax-benefit systems: Consequences for employment Box 2.1. Taxing low-income workers: Lessons from optimal income tax theory 2.2. Quantifying the financial disincentives to work Box 2.2. Calculating PTRs and METRs Moving from short-term unemployment into full-time work.