Oppressive European Tax Burdens

August 19, 2025 by Dan Mitchell @ International Liberty

I’ve written before how ordinary workers are basically tax slaves in Europe.

Today, let’s look at new evidence about the absurd extent of taxation in Europe.

Here’s a chart shared by Michael Arouet, showing how much it costs a company to employ a €60,000-per-year worker compared to how much money a worker actually receives.

The numbers for France and Italy are especially horrifying.

• In France, it costs a company more than €95,000 to hire a worker, yet the worker receives only €39,000. An effective tax rate of about 60 percent.
• In Italy, it costs a company more than €88,000 to hire a worker, yet the worker receives only €36,o00. An effective tax rate of about 60 percent.

Even in the countries with the lowest tax burden, effective tax rates are almost 50 percent.

I have three observations on this grim data.

1. Marginal tax rates in all these nations will almost surely be higher than the average (of effective) tax rate. So no wonder there is very little incentive to be productive.
2. Payroll tax burdens often are more oppressive than income tax burdens, at least for ordinary taxpayers. That’s why nations such as Estonia and Slovakia score poorly.
3. While the above numbers for European taxpayers are grim, they don’t include value-added taxes which grab more than 20 percent of whatever money is left after income and payroll taxes.

Actually, I’ll add one final observation. Europe has horrible tax policy because it has horrible spending policy.

Heck, one more observation is that Europe’s stifling burden of government explains why the continent is lagging far behind America.