Taxing Wages in Latin America and the Caribbean 2016

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This new high profile report provides details of taxes paid on wages in twenty economies in Latin America and the Caribbean.  It covers: personal income taxes and social security contributions paid by employees; social security contributions and payroll taxes paid by employers; cash benefits received by in-work families.

It illustrates how these taxes and benefits are calculated in each member country and examines how they impact on household incomes. The results also enable quantitative cross-country comparisons of labour cost levels and the overall tax and benefit position of single persons and families on different levels of earnings.

The publication shows the amounts of taxes and social security contributions levied and cash benefits received for eight different family types which vary by a combination of household composition and household type.  It also presents the resulting average and marginal tax rates (i.e. the tax burden). Average tax rates show that part of gross wage earnings or total labour costs which is taken in tax and social security contributions (both before and after cash benefits). Marginal tax rates show the part of a small increase of gross earnings or total labour costs that is paid in these levies.

The data presented can be used in academic research and to analyse tax, social and economic policies in Latin America and the Caribbean.



A view on taxes, social protection and informality in Latin America using Taxing Wages modelling

The authors of the special feature are Veronica Alaimo, Juan Carlos Benítez, Angel Melguizo and René Orozco. The authors thank Maurice Nettley, Bert Brys and Dominique Paturot for their contributions to this special feature and Melany Gualavisi and Maria Laura Oliveri for providing the data that enabled the analysis. The opinions expressed and arguments employed herein are the views of the authors and do not necessarily represent the official views of the Inter-American Development Bank (IDB), the Inter-American Centre of Tax Administrations (CIAT), the Organisation for Economic Co-operation and Development (OECD) and the OECD Development Centre or the governments of its member countries.



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