Greek salary earners saw their pre-tax and after-tax gap widen in 2017, the Organization for Economic Cooperation and Development reports. According to the OECD data, Greek families have taken on an increased burden in taxation and social security for two years in a row, surpassing even the traditionally highly-taxed Scandinavian families.
For an employee without a family, this increase in tax wedge means that up to 40.8 percent of the salary went to taxation and social security in 2017, rising from 40.5 percent in 2015. This is far above the 35.9 percent average tax wedge in the 35 OECD countries, which in itself is in downward trend, coming down from 36 percent in 2016.
The tax wedge has been increasing since the beginning of the crisis that saw Greece in need for a bailout program and It is telling of the trajectory that Greek economy has been into recently, that in 2000 the Greek tax wedge was at 38.8 percent, while the OECD average was at 37 percent.
What’s more concerning is the fact that the decline of the tax-free threshold means that a family of four is facing a larger tax burden than that of the average OECD country. For a salary-earner with two children, tax breaks do not surpass 1.8 percent, far beyond the OECD average which stands at 9.8 percent. In effect, this means that the after-tax wages of Greeks are 39.98 less than the pre-tax salary, for a worker with two children. Among the OECD countries, only France has a higher tax wedge (at 39.44 percent), while tax-heavy countries such as Finland and Sweden do not burden families as much, the respective tax wedge being 38.4 percent and 38.2 percent. The average tax wedge in OECD, regarding four-member families, stands at 26.1 percent.
