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As a guy from Europe I don't know much about the US tax system. If somebody mentions he earns $120k, I assume that's gross salary? What does he usually end up w

by kabes 11y ago

As a guy from Europe I don't know much about the US tax system. If somebody mentions he earns $120k, I assume that's gross salary? What does he usually end up with net? From what I understand it depends on the state. Is that 4.25% you talk about the only tax there is?

coderholic 11y ago
There's also federal tax, which is around 25%. You then pay state tax on top. I moved to the US from the UK, and the total tax is roughly the same.
- vinay427 11y ago
  The major tax difference in the UK from my understanding is the 20% standard VAT, which is obviously much higher than any sales tax in the US.
  - bogomipz 11y ago
    Yes there's no VAT in the US but when you add up all the "soft taxes" - toll roads, hotel tax, unemployment tax(unique in that you pay tax on money have already paid tax on) not to mention the other quasi/hidden taxes and fees like the following: gas tax, cell phone tax, electricity and natural gas, cable tv and alcohol the lack of a VAT in the US doesn't account for much.
    - vinay427 11y ago
      Please see the various links I found below, in case you're not aware of comparable taxes in the UK. In addition, my state doesn't have toll roads (only a few major bridges are tolled) or congestion charges like parts of London. Your point on unemployment tax is duly taken, however. Gas tax: https://en.wikipedia.org/wiki/Fuel_tax#United_Kingdom https://en.wikipedia.org/wiki/Fuel_tax#United_Kingdom EDIT: To put that into perspective, the tax in the UK of "£2.19 per U.S. gallon" is far more than a gallon of gas costs most Americans right now. In addition, there's a 20% VAT on the gas price AND the duty, so Britons are being taxed at 20% on that duty. VAT applies to hotels: "The exceptions are the UK and Slovakia where VAT stands at 20% for all goods and services including hotel accommodation" (https://www.instituteofhospitality.org/Publications/Insight_e-newsletter/2011-news/june-issue-2011/Why-is-uk-hotel-vat-so-high https://www.instituteofhospitality.org/Publications/Insight_...) Toll roads: https://www.gov.uk/uk-toll-roads https://www.gov.uk/uk-toll-roads Electricity tax on certain usage levels: "The Climate Change Levy is a p/kWh tax on certain electricity use. Exempt supplies include domestic supplies and supplies using less than the de minimis threshold of 1,000 kWh / month" (https://en.wikipedia.org/wiki/Electricity_billing_in_the_UK https://en.wikipedia.org/wiki/Electricity_billing_in_the_UK) TV licencing fee that I seem to always hear British taxpayers complaining about: "Since 1 April 2010 the annual licence fee has been £145.50 for colour and £49.00 for black and white." (https://en.wikipedia.org/wiki/Television_licensing_in_the_United_Kingdom https://en.wikipedia.org/wiki/Television_licensing_in_the_Un...) Alcohol and tobacco taxes: https://www.gov.uk/tax-on-shopping/alcohol-tobacco https://www.gov.uk/tax-on-shopping/alcohol-tobacco
- bogomipz 11y ago
  Well federal can be as high as 28%. The US likes to point at various "socialist" countries in Europe but when you talk to someone from the UK or some of the Nordic countries you realize the difference is nominal. The difference is that you get health care and affordable university for those taxes on the other side of the Atlantic.
tim333 11y ago
paycheckcity.com calculates $120k pre tax as giving 85k in Texas or 74.8k in Calif after deductions.
bogomipz 11y ago
Oh no. You have state tax, federal tax, FICA. Some places might also have a city tax as well(New York City), then you have sales tax. Then there all the other nickle and dime soft taxes that you are dinged with. The US pays insane taxes. This is a good resource if you are curious: https://www.nerdwallet.com/blog/taxes/how-much-do-americans-really-pay-taxes-2015/ https://www.nerdwallet.com/blog/taxes/how-much-do-americans-...
Drugba 11y ago
No, it's not. Federal tax takes a big chunk and then there's paying in to things like medicare and social security. For example, I work in Los Angeles and make 100k pre-tax. Last year my net just over 65k.
pilom 11y ago
4.25% in payroll taxes (Social Security and Medicare), federal income taxes range based on how much you make and how big your family is. Large family making little, 0%; Single making $120k, your highest marginal rate is 28% but it will average out to an effective rate around 17% in my experience. State taxes range from 0% in Texas to what the other posts say about California.
- mercutio2 11y ago
  Payroll taxes are 7.65% until social security cuts out, not 4.25%.
Cacti 11y ago
Taxes are roughly 50% for someone making 120k. Maybe closer to 45% when its all said and done. There's state income taxes, federal income, Medicare and social security, sales tax, property tax, real estate taxes, and then special taxes on stuff like gas, guns, phone bills, hotels and car rentals, airplane tickets, etc. For all our complaints about how evil taxes are we sure have a whole lot of them! If you are normal. If you're particularly rich then it'll be different because the majority of your assets aren't from income and there's all kinds of loopholes. If you're particularly poor taxes will be significantly lower but the threshold is pretty low... The poverty line for a family of 4 is shockingly low.

by kabes 11y ago

coderholic 11y ago

There's also federal tax, which is around 25%. You then pay state tax on top. I moved to the US from the UK, and the total tax is roughly the same.

vinay427 11y ago
The major tax difference in the UK from my understanding is the 20% standard VAT, which is obviously much higher than any sales tax in the US.
- bogomipz 11y ago
  Yes there's no VAT in the US but when you add up all the "soft taxes" - toll roads, hotel tax, unemployment tax(unique in that you pay tax on money have already paid tax on) not to mention the other quasi/hidden taxes and fees like the following: gas tax, cell phone tax, electricity and natural gas, cable tv and alcohol the lack of a VAT in the US doesn't account for much.
  - vinay427 11y ago
    Please see the various links I found below, in case you're not aware of comparable taxes in the UK. In addition, my state doesn't have toll roads (only a few major bridges are tolled) or congestion charges like parts of London. Your point on unemployment tax is duly taken, however. Gas tax: https://en.wikipedia.org/wiki/Fuel_tax#United_Kingdom https://en.wikipedia.org/wiki/Fuel_tax#United_Kingdom EDIT: To put that into perspective, the tax in the UK of "£2.19 per U.S. gallon" is far more than a gallon of gas costs most Americans right now. In addition, there's a 20% VAT on the gas price AND the duty, so Britons are being taxed at 20% on that duty. VAT applies to hotels: "The exceptions are the UK and Slovakia where VAT stands at 20% for all goods and services including hotel accommodation" (https://www.instituteofhospitality.org/Publications/Insight_e-newsletter/2011-news/june-issue-2011/Why-is-uk-hotel-vat-so-high https://www.instituteofhospitality.org/Publications/Insight_...) Toll roads: https://www.gov.uk/uk-toll-roads https://www.gov.uk/uk-toll-roads Electricity tax on certain usage levels: "The Climate Change Levy is a p/kWh tax on certain electricity use. Exempt supplies include domestic supplies and supplies using less than the de minimis threshold of 1,000 kWh / month" (https://en.wikipedia.org/wiki/Electricity_billing_in_the_UK https://en.wikipedia.org/wiki/Electricity_billing_in_the_UK) TV licencing fee that I seem to always hear British taxpayers complaining about: "Since 1 April 2010 the annual licence fee has been £145.50 for colour and £49.00 for black and white." (https://en.wikipedia.org/wiki/Television_licensing_in_the_United_Kingdom https://en.wikipedia.org/wiki/Television_licensing_in_the_Un...) Alcohol and tobacco taxes: https://www.gov.uk/tax-on-shopping/alcohol-tobacco https://www.gov.uk/tax-on-shopping/alcohol-tobacco
bogomipz 11y ago
Well federal can be as high as 28%. The US likes to point at various "socialist" countries in Europe but when you talk to someone from the UK or some of the Nordic countries you realize the difference is nominal. The difference is that you get health care and affordable university for those taxes on the other side of the Atlantic.

tim333 11y ago

paycheckcity.com calculates $120k pre tax as giving 85k in Texas or 74.8k in Calif after deductions.

bogomipz 11y ago

Oh no. You have state tax, federal tax, FICA. Some places might also have a city tax as well(New York City), then you have sales tax. Then there all the other nickle and dime soft taxes that you are dinged with. The US pays insane taxes. This is a good resource if you are curious: https://www.nerdwallet.com/blog/taxes/how-much-do-americans-really-pay-taxes-2015/ https://www.nerdwallet.com/blog/taxes/how-much-do-americans-...

Drugba 11y ago

No, it's not. Federal tax takes a big chunk and then there's paying in to things like medicare and social security. For example, I work in Los Angeles and make 100k pre-tax. Last year my net just over 65k.

pilom 11y ago

4.25% in payroll taxes (Social Security and Medicare), federal income taxes range based on how much you make and how big your family is. Large family making little, 0%; Single making $120k, your highest marginal rate is 28% but it will average out to an effective rate around 17% in my experience. State taxes range from 0% in Texas to what the other posts say about California.

mercutio2 11y ago
Payroll taxes are 7.65% until social security cuts out, not 4.25%.

Cacti 11y ago

Taxes are roughly 50% for someone making 120k. Maybe closer to 45% when its all said and done. There's state income taxes, federal income, Medicare and social security, sales tax, property tax, real estate taxes, and then special taxes on stuff like gas, guns, phone bills, hotels and car rentals, airplane tickets, etc. For all our complaints about how evil taxes are we sure have a whole lot of them! If you are normal. If you're particularly rich then it'll be different because the majority of your assets aren't from income and there's all kinds of loopholes. If you're particularly poor taxes will be significantly lower but the threshold is pretty low... The poverty line for a family of 4 is shockingly low.