IDEAS home Printed from https://ideas.repec.org/a/vrs/ecobur/v10y2024i2p60-91n1003.html
   My bibliography  Save this article

Taxation of public pensions in European Union countries

Author

Listed:
  • Cieślukowski Maciej

    (Department of Public Finance, Poznań University of Economics and Business, al. Niepod leglości 10, Poznań, Poland)

Abstract

The aging of society is one of the most important trends shaping the social, economic and political life of the 21st century. However, with the increasing number of people of retirement age, the problem of ensuring adequate conditions for a longer life arises. The state influences these conditions through the pension security system, including taxation of pensions. The paper attempts to answer the question whether taxation of remunerations and public pension benefits may have a significant impact on making decisions about choosing a country of work in the common market. For this purpose, Member States have been ranked in terms of two dimensions—the conditions of taxation of wages and the conditions of taxation of retirement benefits. The countries were classified using a multi-criteria comparative analysis and the agglomeration method. The study shows that taxing salaries and pension benefits is of marginal importance from the point of view of an employee’s decision-making. The main factors are the average expenditure on net salaries and the average expenditure on net pension benefits.

Suggested Citation

  • Cieślukowski Maciej, 2024. "Taxation of public pensions in European Union countries," Economics and Business Review, Sciendo, vol. 10(2), pages 60-91.
    • Handle: RePEc:vrs:ecobur:v:10:y:2024:i:2:p:60-91:n:1003
    DOI: 10.18559/ebr.2024.2.1140
    as

    Download full text from publisher

    File URL: https://doi.org/10.18559/ebr.2024.2.1140
    Download Restriction: no
    File URL: https://libkey.io/10.18559/ebr.2024.2.1140?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Salvador Barrios & Flavia Coda Moscarola & Francesco Figari & Luca Gandullia, 2020. "Size and distributional pattern of pension-related tax expenditures in European countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1287-1320, October.
    2. Diamond, Peter, 2010. "Taxes and Pensions," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 59-74.
    3. Gordon Keenay & Edward Whitehouse, 2003. "The Role of the Personal Tax System in Old-Age Support: A Survey of 15 Countries," Fiscal Studies, Institute for Fiscal Studies, vol. 24(1), pages 1-21, March.
    4. Bernd Genser & Robert Holzmann, 2021. "Frontloaded Income Taxation of Old-Age Pensions: For Efficiency and Fairness in a World of International Labor Mobility," CESifo Economic Studies, CESifo Group, vol. 67(1), pages 61-77.
    5. Byung Wook Jun & Soo Jean Park & Sung Man Yoon, 2023. "Effects Of Socio-Economic Factors On Governmental Tax Expenditures For Private Pensions In Selected Oecd Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(05), pages 1599-1611, September.
    6. Swift, Zhicheng Li, 2006. "Managing the effects of tax expenditures on the national budget," Policy Research Working Paper Series 3927, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. IVASKAITE-TAMOSIUNE Viginta & THIEMANN Andreas, 2021. "The budgetary and redistributive impact of pension taxation in the EU: A microsimulation analysis," JRC Working Papers on Taxation & Structural Reforms 2021-08, Joint Research Centre.
    2. Bernd Genser & Robert Holzmann, 2020. "Taxing German Old-age Pensions Fairly and Effciently," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(04), pages 36-40, January.
    3. Anand, Mukesh Kumar, 2016. "Reforming fossil fuel prices in India: Dilemma of a developing economy," Energy Policy, Elsevier, vol. 92(C), pages 139-150.
    4. Philippe Choné & Guy Laroque, 2014. "Income tax and retirement schemes," Working Papers hal-01070554, HAL.
    5. Palacios, Robert, 2006. "Civil-service pension schemes around the world," MPRA Paper 14796, University Library of Munich, Germany.
    6. Spencer Bastani & Sören Blomquist & Luca Micheletto, 2016. "Public Pensions in a Multi-Period Mirrleesian Income Tax Model," CESifo Working Paper Series 6206, CESifo.
    7. José Luis Iparraguirre, 2020. "Economics and Ageing," Springer Books, Springer, number 978-3-030-29019-1, March.
    8. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," Quantitative Macroeconomics Working Papers 20906, Hamburg University, Department of Economics.
    9. Richard Disney, 2003. "Public Pension Reform in Europe: Policies, Prospects and Evaluation," The World Economy, Wiley Blackwell, vol. 26(10), pages 1425-1445, November.
    10. Kerstin Roeder, 2014. "Optimal taxes and pensions with myopic agents," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(3), pages 597-618, March.
    11. Edward Whitehouse, 2007. "Pensions Panorama : Retirement-Income Systems in 53 Countries," World Bank Publications - Books, The World Bank Group, number 7177.
    12. repec:spo:wpmain:info:hdl:2441/45smbs6p8180bqfu6epmve62q2 is not listed on IDEAS
    13. Stefan Steinerberger & Aleh Tsyvinski, 2020. "On Vickrey's Income Averaging," Papers 2004.06289, arXiv.org.
    14. CHRISTL Michael & DE POLI Silvia & IVASKAITE-TAMOSIUNE Viginta, 2021. "Does it pay to say “I do”? Marriage bonuses and penalties across the EU," JRC Working Papers on Taxation & Structural Reforms 2021-07, Joint Research Centre.
    15. Isabelle Joumard & Mauro Pisu & Debra Bloch, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 3. Income Redistribution via Taxes and Transfers Across OECD Countries," OECD Economics Department Working Papers 926, OECD Publishing.
    16. repec:hal:wpspec:info:hdl:2441/45smbs6p8180bqfu6epmve62q2 is not listed on IDEAS
    17. Diego d'Andria & Jason DeBacker & Richard Evans & Jonathan Pycroft & Magdalena Zachlod-Jelec, 2019. "Micro-founded tax policy effects in a heterogenenous-agent macro-model," JRC Working Papers on Taxation & Structural Reforms 2019-01, Joint Research Centre.
    18. Whitehouse, Edward, 2001. "Pension systems in 15 countries compared: the value of entitlements," MPRA Paper 14751, University Library of Munich, Germany.
    19. Philippe Choné & Guy Laroque, 2014. "Income tax and retirement schemes," SciencePo Working papers Main hal-01070554, HAL.
    20. Spencer Bastani & Daniel Waldenström, 2018. "How should capital be taxed? The Swedish experience," Working Papers hal-02878153, HAL.
    21. Börsch-Supan, Axel & Quinn, Christopher, 2015. "Taxing pensions and retirement benefits in Germany," MEA discussion paper series 201510, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    22. Waldenstrom, Daniel & Bastani, Spencer, 2018. "How Should Capital Be Taxed? Theory and Evidence from Sweden," CEPR Discussion Papers 12880, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    public pensions; taxes; social security contributions; EU countries; labour costs;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:ecobur:v:10:y:2024:i:2:p:60-91:n:1003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.