New Tax Increase Proposal for Social Protection from OECD Report
The Organisation for Economic Co-operation and Development recommended increasing taxes on capital, inheritance, and real estate to close growing social protection deficits caused by an aging population and flexible working models.
The Financing Social Protection report published by the Organisation for Economic Co-operation and Development (OECD) has brought up the increase of capital and wealth taxes in response to rising expenditures.
Expectation of Increase in Social Protection Expenditures
It is anticipated that there will be a significant rise in retirement, health, and long-term care costs alongside the aging of the population in OECD and European Union countries.
Labor Incomes Under Pressure
Labor incomes, which are the main source of financing for social protection systems in most countries, are under pressure due to demographic transformation and non-standard working formats.
Future Expenditure Rates
It is estimated that the ratio of old-age pension expenditures to GDP will increase across the OECD between 2023 and 2045, and similarly, health and care expenses will also rise.
New Tax Item Proposals
It has been proposed to increase inheritance, real estate, dividend, interest, and capital gains taxes to compensate for the deficit in social expenditures financed from the general budget.