Shifting from Social Security Contributions to Consumption Taxes [electronic resource]: The Impact on Low-Income Earner Work Incentives / Alastair Thomas and Fidel Picos-Sánchez = Le remplacement des cotisations de sécurité sociale par des impôts sur la consommation : incidence sur l'incitation des salariés titulaires de faibles revenus à travailler / Alastair Thomas et Fidel Picos-Sánchez

By:

Thomas, Alastair

Contributor(s):

Picos-Sánchez, Fidel

Material type: Article

ArticleSeries: OECD Taxation Working Papers ; no.11.Publication details: Paris : OECD Publishing, 2012.Description: 44 p. ; 21 x 29.7cmOther title:

Le remplacement des cotisations de sécurité sociale par des impôts sur la consommation incidence sur l'incitation des salariés titulaires de faibles revenus à travailler

Subject(s):

Taxation

Other classification:

Online resources:

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Abstract: This paper investigates the merits of increasing work incentives for low-income workers by shifting part of the tax burden from social security contributions (SSC) to consumption taxes (specifically VAT) in 13 European OECD countries. Simulation results based on household budget survey microdata show that such reforms will increase work incentives for low-income workers at both participation and hours-worked margins. However, these increases will generally be small as part of the VAT increase will still be borne by low-income workers. This, combined with difficulty targeting the reforms and potential equity concerns regarding increasing the tax burden on non-workers, suggests that alternate funding sources to a VAT increase should also be considered to fund SSC reductions.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección OECD	OECD 5k95qw92l521-en (Browse shelf(Opens below))	Not For Loan

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This paper investigates the merits of increasing work incentives for low-income workers by shifting part of the tax burden from social security contributions (SSC) to consumption taxes (specifically VAT) in 13 European OECD countries. Simulation results based on household budget survey microdata show that such reforms will increase work incentives for low-income workers at both participation and hours-worked margins. However, these increases will generally be small as part of the VAT increase will still be borne by low-income workers. This, combined with difficulty targeting the reforms and potential equity concerns regarding increasing the tax burden on non-workers, suggests that alternate funding sources to a VAT increase should also be considered to fund SSC reductions.

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