tax wedge

The Nordic model is also characterised by a high tax wedge.

The typical worker receives only 40% of his income after the tax wedge.

His 1999 budget also included 'individualisation' measures to reduce the heavy tax wedge faced in particular by married women who choose to work.

Europe's comparatively high tax burden has created big marginal effects and tax wedges.

There is a clear lesson: an over-burdened tax wedge spells disaster for job creation and job maintenance.

The tax wedge is the deviation from equilibrium price/quantity as a result of a taxation, which results in consumers paying more, and suppliers receiving less.

In fact, they might regard pension contributions as providing an opportunity for retirement saving, in which case contributions should not be deducted from household's earnings and should not be included in the tax wedge.

The middle income worker suffers from a nearly 60% tax wedge and effective marginal tax rates are very high.Economic Survey of Finland in 2004, OECD Value-added tax is 22% for most items.

In the electoral campaign, Berlusconi and the whole centre-right coalition almost daily criticized the left, alleging that Prodi would increase taxes if elected, pointing out the centre-left proposal to have a 5% cut of the tax wedge.

However, according to OECD, the distortions imposed by a combined marginal tax wedge of 70% (60% income tax plus 25% VAT, not counting elevated excise duties on certain goods) are hurting productivity and in turn the country's competitiveness.

In other words we want to see the tax base expand through the energy tax, but we want to state clearly and politically to the Commission and to the Council that we would like to see offsets of this new expanded energy tax base being recycled into lowering the tax wedge, the tax cost and labour.