Tax reforms can result in job creation: OECD Study By TII News Service
Oct 12, 2011 , Paris
THE OECD’s
new 'Tax Policy Study No. 21: Taxation and Employment' suggests that
well-targeted tax reforms can encourage employers to hire more people
and the jobless to look for employment.
G20 Labour and Employment Ministers emphasise that policies to enhance
employment are key to the recovery from the financial and economic crisis.
Taxing employers, through social security contributions or payroll taxes,
discourages them from hiring. And taxing employees’ wages lowers their
take-home pay and discourages work. Making across-the-board reductions to
these tax burdens will be difficult for governments already battling to reduce
their deficits. Instead, the report recommends target reforms to generate
the greatest employment gains at the most efficient cost.
In addition to getting more people into work, these reforms will reduce dependency
on benefit payments and pension incomes. In light of rapidly ageing populations,
this is critical to ensuring the sustainability of social security systems
around the world.
