An international comparative analysis in taxation of wages: An evaluation on minimum wage

One of the factors of production is labor and their payment is made in the form of wage, at the same time the wage is a type of income in terms of personal income tax. In accordance with the principle of differentiation, the taxation of wages should be differentiated from other income elements and various advantages should be provided to them. Since the minimum wage is legally the lowest wage that can be paid and is sufficient to support the labor factor, it is especially important to reduce the tax burden on it and take protective measures. The aim of this study is to examine the taxation of wages, especially the minimum wage, to compare the situation in various countries, to identify the problems in the taxation of wages and to offer solutions. For this reason, the study has been discussed under three main sections. In the first chapter the wage, taxation causes of wages, taxation of wages in various countries and Turkey, exemptions, exception and reduction and tax burden were discussed. In the second chapter, the minimum wage, its purpose, its development, the status of the minimum wage and its taxation in various countries are examined. In the last chapter, the problems have been identified on the taxation of wages and the minimum wage in Turkey and made suggestions. In the study, it has been found that the ability to pay is not taken into account in the taxation of wage income, the tax burden of wage earners is heavy, horizontal equality among wage earners is broken and the tax burden of minimum wage earners is high. The following recommendations have been made: measures should be taken to reduce the tax burden of wage earners, the withholding method should be prevented to be final taxation and the declaration method should be adopted, unnecessary exemptions and exceptions should be lifted; some exceptions should be revised, the stamp tax on wages should be removed, the minimum wage should be an exception from personal income tax.