Tax freedom day – the time when average workers have earned enough cash to pay their annual tax bills in full – are falling later in the year as governments demand more money to try to balance their deficits.
In Europe, the average Belgians take until August 6 to discharge their tax burden, while Cypriots celebrate tax freedom on March 21.
Research by the Molinari Economic Institute (MEI), based in Brussels, calculated the average tax paid by workers in each European Union nation and found a wide variation of how big a slice of their wages governments took.
The average rate for direct and indirect tax for workers in Europe is 45.27% of their annual salary.
French workers earn the highest average salaries at £44,410 a year and pay the highest payroll taxes that leads to tension between wages offered by employers and those expected by employees, says the MEI.
Pleas for tax breaks
“Employers consider wages including taxes, while employees look at the purchasing power their salaries give them after deducting taxes,” said the report.
“This leads employees to feel they may not receive the full worth of their contribution to a business.”
The MEI believes the tax burden in France is becoming untenable for the socialist government of Francois Hollande.
“Despite pleas for tax breaks, the taxes paid in France are still growing,” said MEI president Cécile Philippe.
“Compared to Italy, the Netherlands, Belgium, Germany and the UK, French workers are dissatisfied because they are paid more but have less spending power.
Loss of influence
“France is still seeing a spending deficit and owes more money now than when the government came to power. From a country that was once fiscally prudent, it is now one that is steeped in debt.
“The result is a loss of influence in Europe as other countries control their deficits and borrowing.”
The full list of when employees in different countries reach tax freedom day is:
- March – Cyprus
- April – Ireland and Malta
- May – UK, Bulgaria and Luxembourg
- June – Portugal, Denmark, Slovenia, Estonia, Spain, Croatia, Poland, Lithuania, Czech Republic, Finland, Latvia, Slovakia, The Netherlands, Sweden and Italy
- July – Romania, Germany, Greece, Hungary, Austria and France
- August – Belgium
Overall, the tax burden on workers rose in 15 countries during the past year and fell in nine. The rest stayed more or less the same.
The largest increase of nearly 7% was seen in Greece, while Belgians pay nearly 60% of their salaries as taxes and the French just over 57%.
