Verotaakkaa

Verotaakkaa, or the tax burden, is a concept used in public finance to describe the total taxes and mandatory charges levied on a person or household in a given period, typically one year. It is a tool for analyzing the distributive effects of a tax system and for comparing the relative load on different groups or countries.

Measurement includes direct taxes (income tax, wealth tax where applicable, property tax), social security contributions, and indirect taxes (value-added tax, excise duties). It can be quantified as an effective tax rate (the ratio of total taxes paid to gross income) or as a tax wedge (the portion of gross earnings consumed by taxes and transfers). In Finland, verotaakkaa often refers to the combined burden from income taxes and social contributions, plus indirect taxes on consumption.

Distribution of the verotaakka varies with the tax structure. In progressive systems, average tax rates may rise with income, but the overall burden also depends on deductions, credits, and social transfers. Indirect taxes tend to be relatively regressive, potentially shifting burden toward lower-income households unless offset by transfers. The composition of the tax mix—size of income tax, value-added tax, property taxes, and social contributions—shapes who bears more of the verotaakka.

Policy relevance: analysts study verotaakkaa to assess fairness, efficiency, and work incentives. Changes to tax rates or the introduction of credits and transfers alter the burden across groups and the overall economic impact. Related concepts include tax wedge and effective tax rate.