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The state's take
Reduced earnings across the OECD are compounded by the creep of taxation
DEATH and taxes, it is said, are the only two certainties in life. One half of that thesis is proved at least by a new report released on May 11th by the OECD. The report splits out the tax burden on employment which is paid by employers (in the form of social-security payments) and employees (as income tax and more social security). France and Germany have some of the most costly tax regimes—with people who earn the average wage taking home just over 50% of their total labour cost. The effect of fiscal austerity, particularly across Europe, has meant that the tax burden rose in 22 out of the 34 countries in the OECD from 2009 to 2010. Meanwhile real incomes for average-wages earners fell in 15 OECD countries. As the second chart shows, these reduced earnings caused by the world recession and subsequent inflation tend to have a much larger impact on incomes.
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