Thursday, October 12, 2006
[IWS] OECD: TAX REVENUES RISE with LOWER TAX RATES in MANY COUNTRIES [11 October 2006]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Table A: Total tax revenue as percentage of GDP
http://www.oecd.org/dataoecd/8/4/37504406.pdf
Table B: Taxes on income and profits as percentage of GDP
http://www.oecd.org/dataoecd/8/6/37504458.pdf
Chart 1: Tax revenue of main headings as percentage of total tax revenue 2004
http://www.oecd.org/dataoecd/8/7/37504472.pdf
Revenue Statistics is available via SourceOECD at most universities.
Press Release
Tax revenues on the rise in many OECD countries, OECD report shows [11 October 2006]
http://www.oecd.org/document/11/0,2340,en_2649_201185_37504715_1_1_1_1,00.html
11/10/2006 - Tax revenues, measured as the ratio of tax to Gross Domestic Product (GDP), are rising in many OECD countries despite deep cuts in tax rates, according to a new OECD report, reflecting both the effects of stronger economic growth, which has led to higher corporate profits, and moves in some countries to offset the effects of cuts in tax rates by broadening the tax base and improving tax compliance.
In 2005, according to the latest edition of the OECDs annual Revenue Statistics publication, tax burdens as a proportion of GDP rose in 17 out of the 24 countries for which provisional figures are available, and fell in only five countries (see Table A). The biggest increases were in Iceland, where the tax burden rose by 3.7 percentage points to 42.4% of GDP, followed by the United States (up 1.3 points to 26.8% of GDP) and the United Kingdom (up 1.2 points to 37.2%). The largest reduction in overall tax ratios was in Hungary (down one percentage point to 37.1%).
Based on these figures and figures for 2004, OECD analysts say, a trend towards lower tax burdens witnessed from 2000 to 2003 appears to be going into reverse. Between 2000 and 2003, the tax ratio in the OECD area as a whole fell from 36.6% of GDP to 35.8% of GDP, but in 2004 it moved back up slightly to 35.9%.
Higher revenues from taxes on incomes, including both company profits and personal income, were the main factor behind the higher 2005 tax-to-GDP ratios in Iceland, the United States and the United Kingdom (see Table B). In Iceland, an additional factor was increased revenue from taxes on goods and services. By contrast, the decline in Hungary was mainly due to lower revenue from taxes on goods and services.
Tax on personal income and corporate profits is one of the main sources of tax revenues in many OECD countries. But social security contributions and taxes on goods and services also play a major role, and the relative importance of these various taxes varies across countries (see Chart 1). In New Zealand, for example, taxes on income and profits are the largest single source of revenues, while in the Czech Republic social security contributions provide the main single source of revenues and Mexico taxes on goods and services are the main source of revenues.
Recent increases in income tax revenues both personal and corporate have come despite the fact that statutory rates of corporate and personal income taxes remain stable or are falling in many OECD countries. There were no increases in personal or corporate tax rates in the three countries with the largest tax ratio increase: Iceland, the United Kingdom and the United States.
That suggests that the higher tax ratios are a result of stronger economic growth in these countries, and more generally across the OECD. Stronger growth increases both the profitability of companies and the level of personal incomes, leading to an increase in the level of taxes that they pay.
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Table A: Total tax revenue as percentage of GDP
http://www.oecd.org/dataoecd/8/4/37504406.pdf
Table B: Taxes on income and profits as percentage of GDP
http://www.oecd.org/dataoecd/8/6/37504458.pdf
Chart 1: Tax revenue of main headings as percentage of total tax revenue 2004
http://www.oecd.org/dataoecd/8/7/37504472.pdf
Revenue Statistics is available via SourceOECD at most universities.
Press Release
Tax revenues on the rise in many OECD countries, OECD report shows [11 October 2006]
http://www.oecd.org/document/11/0,2340,en_2649_201185_37504715_1_1_1_1,00.html
11/10/2006 - Tax revenues, measured as the ratio of tax to Gross Domestic Product (GDP), are rising in many OECD countries despite deep cuts in tax rates, according to a new OECD report, reflecting both the effects of stronger economic growth, which has led to higher corporate profits, and moves in some countries to offset the effects of cuts in tax rates by broadening the tax base and improving tax compliance.
In 2005, according to the latest edition of the OECDs annual Revenue Statistics publication, tax burdens as a proportion of GDP rose in 17 out of the 24 countries for which provisional figures are available, and fell in only five countries (see Table A). The biggest increases were in Iceland, where the tax burden rose by 3.7 percentage points to 42.4% of GDP, followed by the United States (up 1.3 points to 26.8% of GDP) and the United Kingdom (up 1.2 points to 37.2%). The largest reduction in overall tax ratios was in Hungary (down one percentage point to 37.1%).
Based on these figures and figures for 2004, OECD analysts say, a trend towards lower tax burdens witnessed from 2000 to 2003 appears to be going into reverse. Between 2000 and 2003, the tax ratio in the OECD area as a whole fell from 36.6% of GDP to 35.8% of GDP, but in 2004 it moved back up slightly to 35.9%.
Higher revenues from taxes on incomes, including both company profits and personal income, were the main factor behind the higher 2005 tax-to-GDP ratios in Iceland, the United States and the United Kingdom (see Table B). In Iceland, an additional factor was increased revenue from taxes on goods and services. By contrast, the decline in Hungary was mainly due to lower revenue from taxes on goods and services.
Tax on personal income and corporate profits is one of the main sources of tax revenues in many OECD countries. But social security contributions and taxes on goods and services also play a major role, and the relative importance of these various taxes varies across countries (see Chart 1). In New Zealand, for example, taxes on income and profits are the largest single source of revenues, while in the Czech Republic social security contributions provide the main single source of revenues and Mexico taxes on goods and services are the main source of revenues.
Recent increases in income tax revenues both personal and corporate have come despite the fact that statutory rates of corporate and personal income taxes remain stable or are falling in many OECD countries. There were no increases in personal or corporate tax rates in the three countries with the largest tax ratio increase: Iceland, the United Kingdom and the United States.
That suggests that the higher tax ratios are a result of stronger economic growth in these countries, and more generally across the OECD. Stronger growth increases both the profitability of companies and the level of personal incomes, leading to an increase in the level of taxes that they pay.
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 8:48 AM
