The Evaluation of the Tax Wedge on Minimum Wage in Terms of the Principles of Justice in Taxation

Abstract

The subject of this study is to determine the tax wedge on the minimum wage and evaluate it in terms of the principles of taxation. In the study, the tax wedge ratio on the minimum wage was calculated and it was assessed in terms of the principles of taxation by considering the tax wedge ratio on the wage of some employees working in the public sector and having a level of income above the minimum wage. The study is important in terms of eliminating the tax burden on the minimum wage and hence reducing the rate of tax wedge and making recommendations to improve the wage rights of minimum wage earners. The results of the study show that the tax wedge rate on the minimum wage is higher than the tax wedge rate on wages of other public employees. In the taxation of minimum wage workers, an inconsistency was determined in the principles of justice in terms of the factors such as tax wedge rates, in other words, tax burdens, the power to pay and devotion.