Tax burden by economic function A comparison for the EU Member States

Policy makers as well as taxpayers are interested in comparing the tax burden in their countries with others, particularly given the wide variations in taxation levels and policies. In order to assess the heterogeneous national tax systems on a fully comparable basis, it is essential to have a unified statistical framework. This paper presents key trends in the tax burden in the Member States of the European Union, based on the European Commission's report 'Taxation trends in the European Union' The main focus lies on analysing the tax burden by economic function (i.e. consumption, labour and capital). The paper presents the methodology that is applied in order to allocate the tax revenue of the different taxes to the economic functions. Moreover, we present measures for the average effective tax burden on different types of income or activities, the so-called implicit tax rates. Results of the calculations are presented looking both at differences between Member States and trends over time.