The Tax Burden and Labour Participation Effects of Emerging Markets on G7 Countries

Abstract

This study aims to analyse the economic dynamics resulting from the tax burden effects, fiscal capabilities and labour force participation rates of countries representing emerging markets on a global scale on the G7 economies, which consist of developed countries. Emerging markets have increasingly become a determining factor in the transformation process of the global economy with their internal dynamics and their direct effects on developed economies. In addition, this study examines the impact of countries representing emerging market economies on G7 economies within the framework of the structural characteristics of existing tax systems and labour markets and evaluates the extent to which these interactions transform the effects on labour force dynamics and taxation policies in G7 countries. On the other hand, the tax burden avoidance strategies of multinational companies in G7 countries and the competitive pressures in labour markets are shaped through both direct and indirect mechanisms, and the expansion of the low-wage competitive environment also causes the restructuring of labour markets on a global scale. While factors such as migration dynamics and technological transformation strengthen the role of emerging market economies in the global system, it is observed that policies such as global minimum tax practices and international taxation standards gain more importance for G7 countries. In this context, it is understood from this fact that the scale effect of emerging markets on the tax burden and labour force participation rates in G7 countries puts pressure on wage levels while at the same time bringing a transformation dynamic that brings the labour markets of developed economies closer to each other on a global scale. The study's findings reveal that G7 countries should carefully evaluate their interactions with emerging markets regarding their long-term economic stability and that it is inevitable for them to develop inclusive policies in this direction