Economic Policy Reforms 2010 Going for Growth by OECD Publishing

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Rate Greece Rise highest marg. rates Hungary Lower band widening and rate cut X X No No Yes X No No Yes X X X X Yes No Yes X X X X Yes No Yes X X Rise No Yes Yes General rise in taxes Italy X X Indexation of tax brackets ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 X Cut of marginal rates X Yes Rise X Yes No Yes X X No No Yes X X Yes No Yes X Yes No Yes X No No Yes X Allowance Spain Tax credit Sweden Tax credit, allowance Switzerland Cut of marginal rates Turkey nl y X Lect u r X X X X Cut Cut X X X X X X X X X X X X Removal X X Rise No X X X X X X X Rise announced X X X X No X X No X X X X X X No Yes Cut No Yes No Yes No Yes Yes Yes Yes X X Cut X Rise X New tax X Slovak Republic United States Yes Yes X Cut of marginal rates Portugal United Kingdom No No X Norway Poland No Rise X X X X Netherlands New Zealand Rise X X X X Perm rise incl.

8 Compulsory training programmes have also been found to facilitate the take-up of new jobs. It is also important to scale up ALMP expenditures as unemployment rises, in order to avoid the inefficient cuts in spending per unemployed that have typically been seen in past downturns. In terms of allocating ALMP spending, policies that can help reduce long-term unemployment at the current juncture include devoting greater resources not only to training programmes but also to helping workers search for employment, as well as targeting ALMPs on particular groups of workers that may be especially vulnerable to withdrawal or have difficulties entering or re-entering the workforce, such as youths or older workers (OECD, 2009f).

At the same time, the necessary reforms may be easier to undertake politically in the current crisis situation. 1. Tax cuts financed in the future by reductions in less productive public spending may also have relatively high long-run effects, similar in overall size to infrastructure investment, and possibly larger in the case of direct taxes. , 2008). This is the same order of magnitude as the average decline in (cyclically-adjusted) tax ratios across OECD countries in the aftermath of the crisis (OECD, 2009b).

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