something From United Kingdom, joined May 2011, 1633 posts, RR: 20 Posted (1 year 2 months 1 week 5 days 13 hours ago) and read 1617 times:
A lot of discussions are held on these forums about tax reforms and the like. Numbers are seldomly provided. Europe is generally considered a ''socialist welfare paradise'', and the USA the ''capitalist heaven''.
My friende works for a big architecture firm in Manhattan but after finishing her current projects wants to move to Europe. She just talked to her ''tax guy'' (I suppose that's the technical term in New York) and learned that she pays about 28% on her gross annual income in taxes and social securites. After talking to a ''Steuerberater'', the German equivalent of an American ''tax guy'', she learned that she'd pay 32% on the same annual income in the state of Hamburg. That is nominally.
However, her annual income in Germany will be about 8% lower than that in New York which will reduce her spending on taxes and social securities to 30%. The cost of living, accounting for a better lifestyle (bigger apartment than her Manhattan shoe box, better health benefits, much better 401k equivalent, less work hours, paid overtime, about 10x the vacation days etc.) are about 16% lower. That already accounts for a car including all pertaining payments, which she doesn't own in New York.
At the end of the day, she has 5,5% less disposable income in Germany but 16% lower cost of living and significantly more free time.
I am actually very surprised by this. I thought especially in Germany things would look much ''worse''. So all BS aside. How many % of your gross income do you pay on taxes (fed, state, payroll, income etc.) and social security (health care, unemployment, 401k, etc.). I would love to hear from people from countries outside the EU and USA too
cmf From , joined Dec 1969, posts, RR: Reply 3, posted (1 year 2 months 1 week 5 days 12 hours ago) and read 1580 times:
I have not looked at it since I was in Germany some 20 years ago. I was very surprised when I found out I was paying much more tax in Germany than I was in Sweden, and had much less buying power. Much of the buying power shortages was cost of rent but medical and pension costs was also involved.
Well, that's a bit off. Unless she now gets only three or four days of paid vacation. The legal minimum in Germany is 20 days. She will probably get 25 or 30. Then there are several public holidays, but still ... "10 times the vacation days" is probably way off.
Rabenschlag From Germany, joined Oct 2000, 1003 posts, RR: 0 Reply 7, posted (1 year 2 months 1 week 4 days 21 hours ago) and read 1432 times:
I pay 17.7% in income tax and 4.6 % for private healthcare insurance (50% of my costs is covered by the insurance, the other 50% is paid by my employer).
Occupation: Full-time state-servant with graduate degree.
Days off: 30 + public holidays
Many things to complain about, definitely not taxes.
OzGlobal From France, joined Nov 2004, 2684 posts, RR: 4 Reply 8, posted (1 year 2 months 1 week 4 days 20 hours ago) and read 1395 times:
As confirmed by all of the above examples:
Americans, who perceived themselves to be be MUCH lower taxed that Europeans, are usually NOT:
What is more:
1/ In France and Germany, once you pay your Income Tax and "Social Charges", you're covered massively for Health (much more than in the US even on most private cover), you're covered for a government pension, and you've payed all public services and education
2/ In the US, you usually need to add a lot of private health cover for the same coverage and you have to pay a fortune for education
3/ In France and Germany you have 6-8 weeks of annual leave vs 2-3 in the US (4 for the luckiest)
4/ As a result, certain measures of 'quality of life', buying power, leisure, work-life balance, access to education and health care, are better in many (not all) European cities.
My Australian friend in NY, senior exec with 3 children, figured he is paying more in taxes and private health than he ever paid during the 5 years he lived in Paris.
So it just goes to show that stereotypes can be far from the reality.
[Edited 2012-10-08 10:02:07]
When all's said and done, there'll be more said than done.
casinterest From United States of America, joined Feb 2005, 3816 posts, RR: 2 Reply 13, posted (1 year 2 months 1 week 3 days 17 hours ago) and read 1261 times:
Quoting fr8mech (Reply 12): My biggest deductions are actually my charitable deductions. Cash and non-cash. So long as you don't count the 401K, off the top.
The 401K, HSA, and Medical contributions come off the gross before effective is calculated. So those are valid.
But for most folks, the Personal excemptions (3800 per household memember) , the ittemized or standard defuction (5950 per person or 11900 for married) , mortgage credit and child tax credit are the biggest deductions.
So if you take the Median Household Income in the US, 44,389 and apply the standard deduction to a household of 4.4 (Married 2.4 kids) people. You come up with 44389 -11900-16720= ~15,600 of taxable income which is under the 10% tax rule which means they pay 1,560 in federal taxes prior to the Child Tax credit, which at 2.4 kids takes them to .....a number at or below 0 depending on a few other items. With this calculation it is easy to see how the ~47% pay no taxes.
Older than I just was ,and younger than I will soo be.
casinterest From United States of America, joined Feb 2005, 3816 posts, RR: 2 Reply 15, posted (1 year 2 months 1 week 3 days 16 hours ago) and read 1239 times:
Quoting fr8mech (Reply 14): Which is why we need to come up with a better system. But, that is a topic for another thread.
But what would be a better system? Eventually those parents have the kids grow up and leave the nest, and they go on to produce more kids that contribute to society. The ~47% is not a static group. It is dynamic and changes based on income, work situations ,and children.
But you are right, it belongs in a thread outside this one. However it points out how the Marginal Tax rates are not close to the effective tax rates.
Older than I just was ,and younger than I will soo be.