Development and contribution of the effective marginal tax rate in 2001-2011
The marginal tax rate describes which percentage of an increase in gross income does not result in a higher disposable income, but in higher taxes and lower allowances.
The average marginal tax rate has increased from 45.6% in 2001 to 48.1% in 2007; thereafter it is expected to remain nearly stable and to come out at 47.4% in 2011.
The increase of the marginal tax rate is mainly due to the higher tariff in the second bracket of the income tax and the growing importance of income dependent allowances.
The distribution of the marginal tax rate is reasonably favourable from the perspective of enhancing labour supply.
The effective marginal tax rate for entrants to the labour market and for secondary earners is much lower than for sole wage-earners and primary earners.
This publication is in Dutch.