Disproportionate tax burden on Greek families with children

Greece levies the highest taxes on families with two children among the 34 member-states of the Organization for Economic Cooperation and Development (OECD).

A study published this week by the OECD showed that after the abolition of the tax-free threshold for families with children in Greece, taxes and social security contributions accounted for 43.4 percent of the income of each parent who worked last year, against an OECD average of just 26.9 percent.

Even after the payment of family benefits, Greece remains the only OECD member-state where the tax burden of a family with children is 3 percentage points higher than the burden on a single, childless worker, in effect punishing people for having children. In the other OECD countries the average tax burden on households with two children is 9 percentage points lower than that on a single worker without children.

That does not mean that unmarried workers in Greece are taxed less than their OECD peers: The study shows that the burden on single workers in Greece from taxes and other contributions amounts to 40.44 percent of their incomes, compared with an OECD average of 36 percent. This places Greece in 14th place among the 34 member-states. A comparison between the taxes and social security contributions imposed in 2010 and in 2014 illustrates that the situation has deteriorated for unmarried workers: Their burden grew by 1.3 percentage points last year from 39.1 percent in 2010. At the same time the OECD countries experienced a decline of 0.7 percent from 36.7 percent in 2010.

The study further reveals that employees and employers’ social security contributions account for 83 percent of the total tax burden, compared with an average rate of 63 percent among OECD member-states.

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