Income tax and social security contributions declined slightly for the average worker across the OECD in 2018, driven by major reforms in a handful of countries, according to a new OECD report.
Taxing Wages 2019 shows that the “tax wedge” – total taxes on labour costs paid by employees and employers, minus family benefits, as a percentage of the labour cost to the employer – was 36.1% in 2018. This represents a fall of 0.16 percentage points from 2017, and is the fourth consecutive annual decrease in the tax wedge on the average OECD worker.
Foreign aid from official donors in 2018 fell 2.7% from 2017, with a declining share going to the neediest countries, according to preliminary data collected by the OECD. The drop was largely due to less aid being spent on hosting refugees as arrivals slowed and rules were tightened on which refugee costs can come out of official aid budgets.