Measuring tax burdens in Europe

Guntram Wolff

No B 09-2005, ZEI Working Papers from University of Bonn, ZEI - Center for European Integration Studies

Abstract: This paper calculates effective macro-economic tax rates for the 25 EU countries following the methodology developed in Mendoza, Razin, and Tesar (1994). The available Eurostat data allow to compute the tax wedge on consumption, labor and capital. We show that effective tax rates in the 10 new member states of the EU are on average 10 percentage points lower on labor, and 5 percentage points lower on capital and consumption. There is no tendency of convergence in effective tax burdens on capital. The newly computed tax rates are in line with the effective tax rates of the EU Commission for EU 15. Effective tax rates on capital are only weakly connected to statutory tax rates on corporate income. As they are calculated from macroeconomic data they provide only limited information on the actual tax burdens of individual corporations or households.

Keywords: Effective tax; Europe (search for similar items in EconPapers)
JEL-codes: E62 H20 H24 H25 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Measuring Tax Burdens in Europe (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zeiwps:b092005

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