According to the OECD, Germany has the highest tax burden of all industrialized countries after Belgium. According to this, a married couple with children has to pay an average of 40.8 percent of their earned income, as the Organization for Economic Cooperation and Development (OECD) announced on Tuesday in its comparison of the 38 member countries. The burden is only higher in Belgium at 45.5 percent, while the OECD average is 29.4 percent. The balance is similar for single people: Here in Germany 47.8 percent of taxes and social security contributions are due on the income from work. In this comparison, too, only Belgium is higher with 53.0 percent. The OECD average for this type of household is given as 34.6 percent.
“In an international comparison, lower and middle incomes in Germany are subject to relatively high taxes and levies,” said the head of the OECD Berlin Centre, Nicola Brandt, to the Reuters news agency. “The main reason for this is that the social security systems are essentially financed through social security contributions.” However, the relatively high taxes would also be offset by direct benefits such as pension entitlements, health insurance and unemployment insurance. “That’s not the case in all OECD countries,” said Brandt.
Nevertheless, high taxes and levies on low wages could create false incentives. “It may not be worth working more and taking better-paying jobs,” said Brandt. For this reason, the OECD has often recommended in the past that lower incomes should be relieved. “Since environmental and property taxes are not very high in international comparison and there are some very generous exemptions from taxation on inheritance and capital income, revenue-neutral reforms of the tax and transfer structure are conceivable that relieve lower earned income.”
Correction note: In an earlier version of this text, it was stated that Germany has the second highest tax burden of all industrialized countries. That is not correct. It is the tax burden. This consists of taxes and social security contributions.