Greek families have the second highest tax burden in the OECD

Greek families have the second highest tax burden in the OECD

Greece’s taxes and social security contributions put this country second among the 36 member-states of the Organization for Economic Cooperation and Development (OECD) in terms of dues to the state for workers with children.

The figures from the latest report by Washington, DC-based think tank the Tax Foundation, presented in Greece by the Markos Dragoumis Center for Liberal Studies (KEFiM), highlight the huge pressure on Greek households, whether they have children or not. It found that a worker without children paid 40.8% of their gross takings in taxes and contributions in 2019, compared with an OECD average rate of 36%.

The report showed that gross revenues were absorbed as follows: 8.2% went toward income tax, the contributions withheld from workers’ salaries came to 12.7% and the contributions paid by employers for their workers to 19.9%.

For a family with two children, dues to the state comprise 37.8% of salary revenues, making Greece the OECD country with the second highest burden on household incomes after Italy’s 39.2%.

While Greece ranks 14th in terms of the tax burden on labor, its failure to offer any tax breaks to families with children means the margin between the burden on single workers (40.8%) and that on households with children (37.8%) is very small.

“The Tax Foundation economists agree that the higher tax burden on labor leads both to lower employment rates and lower salaries. This is crucial for policymakers in Greece as they seek ways to assist the economy,” said KEFiM, explaining that policies which reduce the tax burden on labor could be a great instrument for encouraging employment.

KEFiM head Alexandros Skouras focused on two important problems: “First the significant family burden on labor through taxes in Greece and Italy, which certainly aggravates the low fertility situation in the two countries; and second, the high tax burden on labor that, combined with its progressive character, increases tax rates considerably for higher incomes, contributing to a considerable extent to the flight of scientists and managers from the country.”

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