European experts explained that tax systems contribute to or amplify gender inequalities that already exist in society, at a public hearing before the European Parliament’s Subcommittee on Tax Matters (FISC) on Monday 13 January.
“Tax policy that is being implemented is interrupting what otherwise is an evolution in culture or policies that are made, either amplifying the problem or interrupting what is actually evolution”, said Manal Corwin, Director of the Centre for Tax Policy and Administration at the Organisation for Economic Co-operation and Development (OECD). Although explicitly unequal provisions have disappeared, tax policies may give rise to gender bias because of their impact on incentives to participate in the labour market and the wider economy, and because of interactions with differences in levels of income, consumption and wealth.
Ms Corwin pointed out that women are three times more likely to work part-time than men and earn lower hourly wages in most countries. The progressivity of tax systems can create a “part-time work trap” – where high marginal tax rates on additional income can discourage the transition to full-time employment.
Åsa Gunnarsson, Professor of Tax Law at the University of Umeå in Sweden, raised the issue of second earners within married couples, who face higher effective tax rates than single workers when taking up employment at the same salary level. The OECD had in fact shown that women accounted for 75% of the workforce in virtually all the organisation’s member countries (see EUROPE 13446/11). “The imagined neutrality of using the ability-to-pay principle to advocate for joint taxation is strongly criticised”, she pointed out. In reality, this taxation supports a particular family model, with the consequent negative impact on the labour supply for secondary workers.
Finally, “the over-taxation of labour in relation to the under-taxation of corporate profits as well as top capital incomes and top wealth owners, combined with a distinct trend of a shift to value added tax (VAT), gives a distributive profile that is undermining social justice and solidarity principles”, she said. (Original version in French by Anne Damiani)