Earnings responses to social security contributions

Neumann, Michael

doi:10.1016/j.labeco.2017.10.001

Cited by 4 publications

(1 citation statement)

References 38 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Social security contributions make up around a fourth of total tax revenue in OECD countries and are considered a tax payment by the OECD tax classification methodology. M. Neumann [29] mentions that it is a long-term trend to set a maximum assessment base for these payments in some countries. This trend is also being implemented in the Czech Republic [30].…”

Section: Literature Reviewmentioning

confidence: 99%

Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022

Krajňák¹

2022

JTR

View full text Add to dashboard Cite

The article deals with changes in personal income taxation in the Czech Republic in 2022 and their impact on the tax burden. The article also deals with the levy burden represented by payments for social security contributions. An extensive tax reform changing the method of taxation of income from dependent activities took place in the Czech Republic in 2021. Its continuing effects was added with impact of legislation changes after 1 January 2022. The most significant change is the increase in the taxpayer’s relief by CZK 3,000. The assessment of how these changes affect the tax burden was made by calculating the effective tax rates. The research methodology includes methods of regression and correlation analysis and methods for time-series analysing. The average wages used by the Czech Social Security Administration for the purposes of calculating social security contributions were used for the analysis. The results show that the tax burden has decreased since 2022 if basic taxpayer relief is applied. For the taxpayer, who, in addition to the taxpayer’s relief, also claims a tax credit for children, the tax burden increases slightly. Although in most cases, the income is subject to the nominal linear tax rate, in comparison with the previous year, there is an increase in the progressivity of the personal income tax due to the rise of the tax relief per taxpayer. On the other hand, social security contributions are both nominally and real linear. There are no significant reforms in this area in comparison with the tax burden. Due to the decrease in the tax burden, in some cases, the levy burden of social security contributions is higher, even though their nominal rate is lower than the nominal income tax rate.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022

Krajňák¹

2022

JTR

View full text Add to dashboard Cite

show abstract

Does a reduction in the pension insurance contribution ratio promote firm productivity? Evidence from a quasinatural experiment in China

Liu,

Liu

et al. 2024

Int. J Fin Econ

View full text Add to dashboard Cite

Reducing the burden of social security contributions for firms, unleashing their vitality, and enhancing their total factor productivity (TFP) are crucial measures in China's pursuit of sustainable and high‐value‐added growth. This article utilizes three reductions in the corporate pension insurance contribution ratio in China as a quasi‐natural experiment to construct a treatment intensity DID (Difference‐in‐Differences) model. By utilizing data from listed companies between 2013 and 2020, this study empirically examines the impact of reducing the pension insurance contribution ratio on firms’ TFP while identifying the underlying mechanisms. The findings of the study are as follows: First, the policy exhibits a significant positive effect on corporate TFP in China. Second, this policy's contribution primarily stems from stimulating firms to increase their employment of highly skilled labour, elevating wages for ordinary employees, and enhancing firm investment efficiency. Lastly, the analysis of heterogeneity demonstrates that the policy's positive effect is more pronounced among non‐state‐owned enterprises, small and medium‐sized enterprises, and labour‐intensive enterprises. This study provides empirical evidence for evaluating the contribution reduction policy and serves as a policy reference for endeavours to deepen the reform of the pension insurance system and enhance pension insurance fund budget management.

show abstract