That seems wrong, as most high tax countries (Denmark, Norway, ...) have full employment and very high standards of living for decades now. Do you have a source for that? Eastern European countries catching up with development don't count, see Piketty.
Well the tax wedge as defined on that page measures the sum of taxes and healthcare, pensions and social security combined, not the tax alone. For a working class wage in most EU countries, healthcare plus contributions for pensions and social funds will sum up to be larger than than income tax.
