The Tax Burden of Typical Workers in the EU 28 - SUMMARY BULLETIN - The Tax Burden of Typical Workers

in the EU 28 --auch in einer deutschen Ausgabe erhältlich-- 2014 edition Brussels, 6 May 2014



New report: Tax Liberation Days 2014

Neue Studie: 2014 Steuerzahlertag

At what point in the year does a typical taxpayer keep his earnings and stop paying the state – his “tax liberation day”? The only EU-wide study using a consistent methodology calculates how long people have to work in 28 EU member countries before they can keep their earnings and stop paying the state. Cypriot workers have the lightest burden, working until 21 March to finance their government. Belgians, who work until 6 August, maintain their position as the worst afflicted. Brussels, 6th May 2014 - For the fifth consecutive year, an EU wide calendar of “Tax Liberation Days” for typical workers in each of the 28 EU member countries has been released today. The study is published by New Direction – the Foundation for European Reform and Institut économique Molinari (IEM) with data provided by accountants Ernst & Young. Using one consistent methodology across all EU member countries, with data reflecting the tax reality experienced by real, working people, the study calculates the TAX LIBERATION DAYS for 2014 as follows: Cyprus: March 21 Spain: June 12 Sweden: June 23 Ireland April 28 Croatia: June 13 Italy: June 30 Malta: April 28 Poland: June 14 Romania: July 01 United Kingdom: May 12 Lithuania: June 18 Germany: July 11 Bulgaria: May 18 Czech Rep.: June 19 Greece: July 14 Luxembourg: May 30 Finland: June 20 Hungary: July 16 Portugal: June 06 Slovakia: June 20 Austria: July 25 Denmark: June 07 Latvia: June 20 France: July 28 Slovenia: June 08 Netherlands: June 21 Belgium: August 06 Estonia: June 10 Key findings of the study include: Typical workers across the European Union saw their average “real tax rate” rise again this year, from 45.06% in 2013 to 45.27% in 2014. The rise of 1.28% since 2010 is largely a consequence of VAT increases in 19 of the 28 EU member states since 2009.

For the fourth consecutive year, Belgium is the country that taxes labour at the highest rate in the European Union; an employer in Brussels spends 2.31€ to put 1€ into a typical worker’s pocket, making a Belgian worker’s tax liberation day August 6.

44.1% of all payroll taxes collected in the EU countries – employer contributions to social security paid on top of gross salaries – are largely invisible to employees.

More than half (54.6%) of citizens are not in the labour force – a figure that is worsening as Europe’s population grows older: Since 2010, the proportion of Europeans outside the labour force has grown by 0.3%. Working people are carrying an ever-heavier share of the tax burden.

Flat tax policies have offered considerable tax relief to workers – notably in Hungary, where a new 16% rate has pushed that country’s tax liberation day forward by 21 days since 2011. However, total taxes remain higher in "flat tax" countries (46.34%) than in "progressive" systems (44.98%) – a gap that has widened since 2010. “EU states continue to spend too much and tax rates have continued to increase in many countries, especially in France. Our states are simply doing too much, leaving less space for individual choice and responsibility. It is about time to rethink our model,” says co-author Cécile Philippe, director of IEM. Some countries, notably the UK, have succeeded in reducing the burden on workers, however. “This report shows that the UK government’s policies in reducing the burden of tax on hard working people are bearing fruit. Across Europe we need to make work pay and let people keep more of their earnings.” says Tom Miers, of New Direction. Tax Liberation Day is the calendar day on which a worker theoretically stops working to pay taxes to the state and begins to keep his/her earnings. The data in the calendar reflect the reality experienced by real, working people in the European Union and the true cost of hiring employees in each state. The study, written by James Rogers and Cécile Philippe of Institut économique Molinari (Paris), analysed annual salary figures for typical workers from Eurostat and the OECD. Payroll tax calculations were made by Ernst & Young. The 2014 study is available on the following link: Tax Liberation Days 2014 2014 Steuerzahlertag To compare with comparison with 2011, 2012 and 2013 go to: Tax Liberation Days 2013 Tax Liberation Days 2012 Tax Liberation Days 2011





New Direction - The Foundation for European Reform aims to help shift the EU onto a different course – away from the current orthodoxy of ‘ever closer union’ and centralised bureaucratic governance onto a path that promotes the freedom, prosperity and security of our nations: encouraging free markets, free enterprise, lower taxes and smaller government. The views expressed in New Direction’s reports are those of the authors and do not necessary reflect the views of all members of New Direction.



The Institut économique Molinari (IEM) is an independent, non-profit research and educational organization based in Paris. Its mission is to promote an economic approach to the study of public policy issues by offering innovative solutions that foster prosperity for all.





For more information please contact the authors of the study:



Cécile Philippe

Director - Institut économique Molinari

E-mail: cecile@institutmolinari.org

Telephone: +33 678 869 858



James Rogers

Researcher – Institut économique Molinari

E-mail: james@institutmolinari.org

Telephone: + 32 497 946 840 aims to help shift the EU onto a different course – away from the current orthodoxy of ‘ever closer union’ and centralised bureaucratic governance onto a path that promotes the freedom, prosperity and security of our nations: encouraging free markets, free enterprise, lower taxes and smaller government. The views expressed in New Direction’s reports are those of the authors and do not necessary reflect the views of all members of New Direction.(IEM) is an independent, non-profit research and educational organization based in Paris. Its mission is to promote an economic approach to the study of public policy issues by offering innovative solutions that foster prosperity for all.Director - Institut économique MolinariE-mail: cecile@institutmolinari.orgTelephone: +33 678 869 858Researcher – Institut économique MolinariE-mail: james@institutmolinari.orgTelephone: + 32 497 946 840

