IMF Staff Country Reports

Kingdom of the Netherlands: Netherlands: Selected Issues-The Labor Income Tax Credit in an International Perspective

Publication Date:

July 6, 2001

Electronic Access:

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Summary:

Compared with its U.S. and U.K. counterparts, the Labor Tax Credit (LTC) is likely to have more limited effects on incentives for primary-earners to enter the labor force, because of the smaller size of the credit. Any significant increase in the LTC to strengthen its effect on the still large poverty trap in the Netherlands is likely to be extremely expensive. Given the easy availability of part-time employment and the high marginal tax rates, the reduction in hours worked could be substantial in the Netherlands.

Series:

Country Report No. 2001/096

Subject:

Credit Labor Marginal effective tax rate Money National accounts Personal income Tax allowances Tax policy Taxes