Tax wedge in Croatia, Italy, Ireland, the Netherlands and Spain

Abstract

Each country has a unique tax system, comprising a number of components reflecting the taxation and economic policy of a country. The aim of this paper is to analyse and compare the tax burden on labour income in Croatia, Italy, Spain, Ireland and the Netherlands while observing various family types and gross wages. The results show that, of all the countries observed, Italy has the highest tax wedge. When it comes to most of the observed families’ and single workers’ tax wedges, Croatia falls somewhere in the middle, while Ireland stands out for having a relatively low tax wedge.

Keywords

• taxation of labour income; progressivity; tax wedge; net average tax rate; Croatia; Italy; Spain; Ireland; the Netherlands