Low income earners face high tax, social contribution burden
Not much left of your paycheque at the end of the month? Workers in Germany have the second highest tax and social contribution burden of 30 nations, according to a new study by the Organisation for Economic Cooperation and Development (OECD).
The group said that the tax burden was highest for single households with lower incomes. In 2008, a single person earning two thirds of an average annual German wage of €44,000 ended up losing almost half his or her pay packet – some 47.3 percent – in taxes and social security contributions. The OECD average was only 33.5 percent.
But the organisation said the German tax system also put double income couples at a disadvantage.
“On the other hand, if only one partner holds a job, then the social contributions are relatively moderate in an OECD comparison. And that’s irrespective of whether the couple has to take care of children,” the group said in a statement.
People with high incomes profit the most from the country's tax and welfare regime, according to the OECD thanks to caps on social security contributions past a certain salary limit.
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The group said that the tax burden was highest for single households with lower incomes. In 2008, a single person earning two thirds of an average annual German wage of €44,000 ended up losing almost half his or her pay packet – some 47.3 percent – in taxes and social security contributions. The OECD average was only 33.5 percent.
But the organisation said the German tax system also put double income couples at a disadvantage.
“On the other hand, if only one partner holds a job, then the social contributions are relatively moderate in an OECD comparison. And that’s irrespective of whether the couple has to take care of children,” the group said in a statement.
People with high incomes profit the most from the country's tax and welfare regime, according to the OECD thanks to caps on social security contributions past a certain salary limit.
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