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> and yet you have to give away sometimes more than half of it
It's not being given away. How are the roads, police, schools, defense budgets funded?
> so that people who don't give a flying toss get their benefits
I just checked. The US and the UK both have a 4.1% unemployment rate. Many of those people are unable to work at all. our social security net means that if you're disabled you shouldn't end up honeless. Note it also pays for healthcare, so there's no chance of me being bankrupted from being hit by a car.
When I was living in NYC I paid 39% federal + 13.5% state/city - that’s over 50%. Healthcare and children education not included. I was not a home owner, and my other deduction amounted to almost nothing thanks to AMT.
After federal taxes you'd be left with 81710.5, so 7k for property taxes and healthcare seems reasonable. Except that you are neglecting to calculate in your higher sales tax that the state of Texas uses to generate tax revenue as well as oil sales which are a non renewable energy and can't be relied on forever
If I made $100K in NYC I would have likely had the same $75k .... which would have left me with $0 after housing and child raising costs. If I made $10k, I would have had the entire $10k. You are comparing big apples to oranges.
I didn’t say I had problems in NYC. I just said US taxes can be as high or higher than European taxes.
Yes, if you make $100k you are better off in Texas. There are way more jobs that pay $100k (not to mention $400k) in NYC than in Texas though. I’m not sure what the apples are or what we’re comparing; if it’s tax rates than the US isn’t as low as people believe.
Every one is better off in Texas compared to NYC financially. Apples to apples. But it's true, if you insist on the Euro experience, you'll have to pay for it...
In the UK the marginal tax rate between £100000-£123700 is 60% as you gradually lose your tax-free allowance, so even though the tax is technically 40%, you're losing another 20% at the other "end" of your income - https://eqinvestors.co.uk/library/avoiding-the-60-percent-ta... .. Admittedly this never means 50%+ of your entire salary is tax (you keep 59.6% net of even a £1M salary, for example) but is a real pain point for earners around the £100K level.
Above 70k, you are supposed to start your own business and optimize your expenses through that. Despite recent squeezes on related practices, it's still much better. Not doing it, is basically a gift to the taxman.
Agreed, though I think it's even more a disincentive to pay yourself more than 100K, even if you're mostly on dividends, once you've already seen ~20% come off for corporation tax.
For third parties unfamiliar with the setup, to pay yourself those dividends that take you from £100k to £110k, you need to take £12500 of biz profit, then £2500 goes to corporation tax, then £6000 to the taxman in personal taxes, leaving you with £4000 from that initial £12500 profit(!) which "feels" like a 68% tax to, say, a contractor in that situation (note: I am not a contractor).
But that's the thing, you don't pay yourself in cash - you move most of your expenses to the company (cars, houses, investments, pension payments etc), so that money is only touched by corp tax. You take out the bare minimum that you cannot reasonably claim as business expense, squeezing your taxable income all the way down. When you reach a point where that's not possible, either you are making way more than 150k or you have a poor accountant.
Employer spends 4k€ on salary.
Gross salary will be 3k€ (Bruttolohn) due to social security the employer pays for you.
Net salary (Nettolohn) after taxes and your social security is 1850€.
This example is from 2010 back when I was a student. Since I only worked 6 monhts, I got back 300€ per month, so effectively received 2150*6 = 12,9k out of 24k paid by the employer.
Note that when you spend money, you'll most likely additionally pay 19% VAT, so out of your standard 1800€ another 324 are spent on VAT.
Hopefully you don't buy gasoline, electricity or products that are produced or transported using gasoline or electricity, because then the taxes paid will be higher.
The highest tax rate in the Netherlands is 51,95% (Note that this only covers anything you make over ~70k+ a year, 0-20k is taxed ~35%, and 20-70 is taxed 40%). Then you pay 6-21% VAT over anything you buy, so yeah, in some scenarios you definitely lose >50% of your gross income to taxes.
You don't just count VAT, let's count everything: 150%-250% taxes on energy, ridiculous amount of fees and duties. As a Dane, we're probably the most taxed in the world and for a high earning software engineer it's approaching 75%.
The state enables a lot of stuff for you in return though, which we'd also have to count as a benefit if we "count everything". It's just infeasible to come up with a concrete number of how much they "take away" from your earned money.
I have the same benefits in the US as in Denmark (more or less). In the US the government take 25% of my income in Denmark it was around 75%. Personally I don't think the extra 50% is worth it. The only ones better off in Denmark is the minimum wage earners.
@rglullis: Well. There is social security, health care, retirement funds and there are taxes.
Well: I gladly pay health insurance in Germany instead of having an American system. Could it be better - hell yes. There is so much bullshit being paid for and so much in the system is made to extract money. But first: taxes are not the culprit here. And second: Pay for healthcare in the US yourself and see what system you like better. Esp if you get older.
It is a false dichotomy. I don't mind the health insurance being mandatory, much like I don't mind people being forced to pay for car insurance if they drive a car. What I find absurd in Germany is that you pay based on your income, just that. I would accept it being factored in, but not being the sole metric to determine pay.
Most health insurances will give you benefits for staying healthy (e.g. visiting the gym or a nutritionist). Visiting the dentist at least once a year will also give you a benefit. There might be other stuff I can't think of right now.
So income isn't the sole metric which determines the pay.
Please tell me how I can reduce my TK payment by showing them my gym membership, and I will be very grateful. No sarcasm here.
Also, as far as I know there is no benefit in going to the dentist, except as "We pay one dental check-up and one clean-up for year, more than that comes out of your pocket". That is at least what I was told when I went to the dentist.
> Also, as far as I know there is no benefit in going to the dentist, except as "We pay one dental check-up and one clean-up for year, more than that comes out of your pocket". That is at least what I was told when I went to the dentist.
Some public insurances tried giving benefits for going to a gym or having reduced membership fees at partners but this has been shut down by the regulator.
Bear in mind this is only income tax. If you put deductions like health insurance (mandatory, and also dependent on income level) my take-home pay was indeed less than 50%.
Paying health insurance is apart from the income tax. So in this particular case your income tax money is not getting you anything in return, healthcare-wise.
Worst in case of health insurance, the amount you pay is dependent on your income, not your actual actuarial risk. This means that, indeed, the healthy people working are subsidizing the costs of the ones "who don't give a flying toss".
And don't get me started on things like Künstlersozialkasse...
I consider "health insurance" to be somewhat of a scam, just less so in Europe than the U.S. I feel like I'm forced to pay into a black hole with no accountability.
Don't know anything about Künstlersozialkasse - "artist social fund". Is that like a tax to (supposedly) support cultural activities..?
No, more like a social security system separate for the artist "class". If you manage to declare yourself as an artist, they pay a substantial part of your health insurance, social security, etc... All funded by us, poor feeble minded workers with no creative bone in our bodies, to support 20-somethings and eternal Peter Pans who can't keep a job.
You are technically correct. In practice, I had colleagues working as "web designers" who were working right next to me and would not get a substantial part of their salary taken out for health insurance. So, they were still funded by the non-artists.
Why the distinction? Because this work involved Photoshop and mine used emacs?
As I said, the portion they don't pay is taken from companies using creative work. Not from you and not from me.
It is only available to freelancers. People working in those fields usually don't have the option of regular employment. For that reason was decided that companies using their work still need to contribute to health insurance (as all regular employers need to do as well). For everybody else the answer is: seek regular employment if you want someone else to pay half of your health insurance.
Alright, then. One could argue that the costs that companies have with this still get passed along to the consumers and other workers, but I will concede it is not "funded by us".
Still does not explain why there is a distinction. Why do artists get to have companies paying them part of their social security while other freelancers still need to make this out of their own pocket? If this is a good idea for the artists, why not for other professions?
That’s factually incorrect. For example the max tax band in the U.K. is either 40 or 45 %. So you don’t give more than half of your earnings. Also every country in Europe decides how to tax ppl in that country.
If it wasn't for "socialist Europe", our health care would be shit (see the US where people die on the streets because they can't afford an ambulance), my brother would be homeless and probably dead, my dad would've been without any income at age 60, years before his retirement, my sister wouldn't have been able to attend university, and I wouldn't have been able to attend college and land a job in Amsterdam where I ended up out-earning my dad within a couple years.
This "taxes pay for lazy fucks" meme needs to die.
Then maybe GP should say that instead of making false statements about ambulances for dramatic effect. Ambulances are for emergencies. Nobody has ever died because they couldn't afford an ambulance to take them to their chemotherapy appointment.
- About $20k/y to provide health for a family, regardless of income. Median wage is barely double that amount. So most people in that situation forego health coverage (or pick the cheapest catastrophic-only coverage they can afford, and then are on the hook financially for any health issue).
- Still have 33% income tax
- Retirement: it's entirely up to you to save. Good luck! (rule of thumb is 15-20% of income)
- Child care: $12-24k/year/infant should your spouse have to work.
- College education: similar figures, maybe less with some assistance programs, maybe more if children go to prestigious schools. Or you can punt the bill to them and have them be on the hook for a loan.
- Oh, and nursing home for the elderly is about $30k/year so better get that retirement fund full of money. Though it's an undue burden to place on someone else, the traditional view is that having children can help reduce that cost.
In short, the US' system is not optimized for the median citizen ($59k in 2016), it's optimized for those who are in the 75th percentile or above.
>Then there's VAT syphoning an extra 20% of the remaining cash.
UPTO 20% of what you SPEND. In the UK you pay 0% VAT toward most food and child stuff. Then 5% toward essential goods and services. THEN full VAT on the rest of the stuff.
But that doesn't equate to 20% of your remaining cash unless you are only buying pre-prepared foods and furniture with your salary, and spending every bit of it.
You don’t have to pay VAT if you don’t buy anything. You can just invest your money.
A new passport costs money. You need to pay for one if you want it. That shouldn’t be part of your income tax because nobody knows how often you will need one. Essentially those fees are on per person basis.
The NHS is very useable. I never used to pay for any private health insurance for about 5 years. It might not be convenient for you to wait but that’s your problem. That system works and saves lives... so it is usable.
I don’t even know what you mean by “lost”. Money doesn’t magically disappear. Maybe it’s a more complex system than you can imagine or haven’t thought about it hard enough.
> In the end you get healthcare, but in general the service is practically unusable and you end up having to pay for health insurance anyway.
Yeah this is just wrong. I have friends who have moved to the US, and said things like - "I wouldn't be as annoyed at how massively expensive health insurance here is, if you got any better service, but you don't"
