5 ms·

60% personal income taxes after big payroll tax and 20% VAT? I don't think so.

jakub_h 10y ago
Maybe it's also about what it buys you? Also, https://www.nordisketax.net/main.asp?url=files/suo/eng/i07.asp https://www.nordisketax.net/main.asp?url=files/suo/eng/i07.a... claims it's at worst 31.75%, not 60%, and that's not even the average. Plus if you're rich, not all or even most of your wealth comes from personal income anyway, so there's that. And ~20% VAT or equivalent seems quite common over the developed world.
- jomamaxx 10y ago
  32% national, 22% municipal and 8% social security = 62%. 20% payroll tax. 24% VAT. That it is 'common' does not mean it is fair. If a company has $100K allocated to pay you, $20K goes to payroll tax. Of $80K remaining, you take home 40% of that, which is $32K. Suppose 2/3 of your take home goes towards consumer goods meaning that you're paying an additional $5K on VAT ~= $25K direct take home. So for $100K salary, you get $25K. And that's before property tax, wealth tax, inheritance taxes, and massive taxation hidden into other things such as fuel etc.. It's too much by any stretch.
  - ptaipale 10y ago
    The national tax percentage is 32 % (actually 31.75 %) only for the amount that exceeds the "high earner" threshold, i.e. you pay it for the part that you earn in excess of 72,300 € per year. (That income puts you in top 4 % of earners in Finland.) The municipal tax varies between 16.50 % (Kauniainen) and 22.50 % (Savonlinna). The church tax varies between 1 and 2 %.
    - clarry 10y ago
      And you don't have to be in church.
  - xyzzyz 10y ago
    When you put it this way, it's amazing how they people how these people even survive on that pittance, isn't it? But actually what happens is that you don't understand how progressive taxes work, how different things have different VAT rates, and so on.
  - nisse72 10y ago
    I don't know the details for Finland, but Sweden has a similar system that works out like this: If a company has agreed to pay you $100k, that's after any payroll tax has been paid, so they pay ~ $120k, you get (gross) $100k. Of the remaining $100k, you pay 0 on the first ~ $2600, 31% on the portion between $2600 and $62k, 51% between $62k and $88k, and 56% above $88k. Do the math, it comes out to about $38500 in income tax. There is no wealth tax or inheritance tax. You get free university education, free universal health care, great public transport, 480 days of parental leave (that can be split among the parents mostly how you like, and used for up to 8 years), and you get a child allowance of ~ 120 euro each month for each child until that child is 16. Too much? Yeah right.
    - 97s 10y ago
      Sounds wonderful!
  - Nokinside 10y ago
    Every Nordic country has higher median wealth than US. http://www.middleclasspoliticaleconomist.com/2013/10/median-wealth-increases-but-us-still.html http://www.middleclasspoliticaleconomist.com/2013/10/median-...
  - yoloswagins 10y ago
    For Finland, the inheritance tax is payable by the beneficiary upon the receipt of the asset, and maxes out at 20% for estate valued at €1MM.
  - jakub_h 10y ago
    You only pay 32% of average income tax if your income is approaching infinity. So your post-tax income is approaching infinity as well, you have more money than you could ever need, and so does everyone else, because your taxes sponsor other people. Welcome to utopia! :D
    - ptaipale 10y ago
      That 32 % is the state tax, but municipal etc taxes are on top of that. Realistic example of where I live: if gross salary is 100,000 €, the employer pays around 120 k€ (including payroll taxes) and the take-home pay after taxes is 57,610 €. So the employee gets a little less than half of what the employer pays. (>100 k€ is the bracket of top 1.6 % of employees.) There's a handy calculator at the tax office pages: http://prosentti.vero.fi/VPL2016/Sivut/LaskennanTulos.aspx?kieli=en-US http://prosentti.vero.fi/VPL2016/Sivut/LaskennanTulos.aspx?k... The nominal percentage however excludes social "insurances" which are effectively taxes. Overall, taxation is very simple for a regular employee; typically the pay-as-you-earn system takes your taxes during the year and in next February you get a slip detailing the income of last year. Most years I don't need to file a tax return at all because the PAYE system has done it correctly. There are very few deductions to apply. There are some other items where taxes are noticeably higher than in the US. Gasoline costs around 1.35 €/l (5.66 $/gal). General VAT is 24 %.
- ajmurmann 10y ago
  The "what it buys you" part is actually very interesting and probably undermeasured. I am fairly certain that the "bang for the bucket" you get from you taxes in smaller countries is much higher. Of course that's total speculation. I wonder what metrics one could use to measure return value on paid taxes and then calculate value/tax dollar paid in different countries.
CalRobert 10y ago
I dunno, I feel richer in Europe than I did in California. Rent in places I like living is cheaper, and I save a good $300-$600 per month on automobile costs. I also save several thousand a year on flights to Europe, since that's pretty much where I like to vacation anyway. Also, I'm fortunate enough to work in tech which has pretty good PTO policies (for now), but my spouse does not, and 4+ weeks of vacation for her as well, letting us see more of the world, makes me feel wealthier than a bigger paycheck. Oh, I'm not expected to answer emails on the weekend either. And I can cycle without fearing for my life every. damn. day - the US detests cyclists and disregards their deaths.
- gr3yh47 10y ago
  >the US detests cyclists and disregards their deaths. to be fair, many cyclists in the US ignore traffic laws wholesale
  - bloodorange 10y ago
    That is no excuse for a death sentence. Many cyclists do this in the Netherlands too and in the period that I have lived there, I haven't seen them treated that way on the roads.
    - wila 10y ago
      If a car hits a cyclist or pedestrian in Holland, the car is -by definition- at fault. See [1] link in dutch. Free translation of the first part: Cyclist or pedestrians are seen as the weaker traffic participants. Because they are fragile in traffic the law has a special rule on collisions with a motorized vehicle. The driver in the car is responsible for the damage of the cyclist without his guilt having to be proven. [1] http://www.anwb.nl/juridisch-advies/aanrijding-en-dan/aansprakelijkheid/voetganger-of-fietser http://www.anwb.nl/juridisch-advies/aanrijding-en-dan/aanspr...
      - tzs 10y ago
        It looks like the driver does have the possibility of proving that he was not guilty, and if successful limiting his reponsibility to half the damages: https://bicycledutch.wordpress.com/2013/02/21/strict-liability-in-the-netherlands/ https://bicycledutch.wordpress.com/2013/02/21/strict-liabili...

Maybe it's also about what it buys you? Also, https://www.nordisketax.net/main.asp?url=files/suo/eng/i07.asp https://www.nordisketax.net/main.asp?url=files/suo/eng/i07.a... claims it's at worst 31.75%, not 60%, and that's not even the average. Plus if you're rich, not all or even most of your wealth comes from personal income anyway, so there's that. And ~20% VAT or equivalent seems quite common over the developed world.

jomamaxx 10y ago
32% national, 22% municipal and 8% social security = 62%. 20% payroll tax. 24% VAT. That it is 'common' does not mean it is fair. If a company has $100K allocated to pay you, $20K goes to payroll tax. Of $80K remaining, you take home 40% of that, which is $32K. Suppose 2/3 of your take home goes towards consumer goods meaning that you're paying an additional $5K on VAT ~= $25K direct take home. So for $100K salary, you get $25K. And that's before property tax, wealth tax, inheritance taxes, and massive taxation hidden into other things such as fuel etc.. It's too much by any stretch.
- ptaipale 10y ago
  The national tax percentage is 32 % (actually 31.75 %) only for the amount that exceeds the "high earner" threshold, i.e. you pay it for the part that you earn in excess of 72,300 € per year. (That income puts you in top 4 % of earners in Finland.) The municipal tax varies between 16.50 % (Kauniainen) and 22.50 % (Savonlinna). The church tax varies between 1 and 2 %.
  - clarry 10y ago
    And you don't have to be in church.
- xyzzyz 10y ago
  When you put it this way, it's amazing how they people how these people even survive on that pittance, isn't it? But actually what happens is that you don't understand how progressive taxes work, how different things have different VAT rates, and so on.
- nisse72 10y ago
  I don't know the details for Finland, but Sweden has a similar system that works out like this: If a company has agreed to pay you $100k, that's after any payroll tax has been paid, so they pay ~ $120k, you get (gross) $100k. Of the remaining $100k, you pay 0 on the first ~ $2600, 31% on the portion between $2600 and $62k, 51% between $62k and $88k, and 56% above $88k. Do the math, it comes out to about $38500 in income tax. There is no wealth tax or inheritance tax. You get free university education, free universal health care, great public transport, 480 days of parental leave (that can be split among the parents mostly how you like, and used for up to 8 years), and you get a child allowance of ~ 120 euro each month for each child until that child is 16. Too much? Yeah right.
  - 97s 10y ago
    Sounds wonderful!
- Nokinside 10y ago
  Every Nordic country has higher median wealth than US. http://www.middleclasspoliticaleconomist.com/2013/10/median-wealth-increases-but-us-still.html http://www.middleclasspoliticaleconomist.com/2013/10/median-...
- yoloswagins 10y ago
  For Finland, the inheritance tax is payable by the beneficiary upon the receipt of the asset, and maxes out at 20% for estate valued at €1MM.
- jakub_h 10y ago
  You only pay 32% of average income tax if your income is approaching infinity. So your post-tax income is approaching infinity as well, you have more money than you could ever need, and so does everyone else, because your taxes sponsor other people. Welcome to utopia! :D
  - ptaipale 10y ago
    That 32 % is the state tax, but municipal etc taxes are on top of that. Realistic example of where I live: if gross salary is 100,000 €, the employer pays around 120 k€ (including payroll taxes) and the take-home pay after taxes is 57,610 €. So the employee gets a little less than half of what the employer pays. (>100 k€ is the bracket of top 1.6 % of employees.) There's a handy calculator at the tax office pages: http://prosentti.vero.fi/VPL2016/Sivut/LaskennanTulos.aspx?kieli=en-US http://prosentti.vero.fi/VPL2016/Sivut/LaskennanTulos.aspx?k... The nominal percentage however excludes social "insurances" which are effectively taxes. Overall, taxation is very simple for a regular employee; typically the pay-as-you-earn system takes your taxes during the year and in next February you get a slip detailing the income of last year. Most years I don't need to file a tax return at all because the PAYE system has done it correctly. There are very few deductions to apply. There are some other items where taxes are noticeably higher than in the US. Gasoline costs around 1.35 €/l (5.66 $/gal). General VAT is 24 %.
ajmurmann 10y ago
The "what it buys you" part is actually very interesting and probably undermeasured. I am fairly certain that the "bang for the bucket" you get from you taxes in smaller countries is much higher. Of course that's total speculation. I wonder what metrics one could use to measure return value on paid taxes and then calculate value/tax dollar paid in different countries.

CalRobert 10y ago

I dunno, I feel richer in Europe than I did in California. Rent in places I like living is cheaper, and I save a good $300-$600 per month on automobile costs. I also save several thousand a year on flights to Europe, since that's pretty much where I like to vacation anyway. Also, I'm fortunate enough to work in tech which has pretty good PTO policies (for now), but my spouse does not, and 4+ weeks of vacation for her as well, letting us see more of the world, makes me feel wealthier than a bigger paycheck. Oh, I'm not expected to answer emails on the weekend either. And I can cycle without fearing for my life every. damn. day - the US detests cyclists and disregards their deaths.

gr3yh47 10y ago
>the US detests cyclists and disregards their deaths. to be fair, many cyclists in the US ignore traffic laws wholesale
- bloodorange 10y ago
  That is no excuse for a death sentence. Many cyclists do this in the Netherlands too and in the period that I have lived there, I haven't seen them treated that way on the roads.
  - wila 10y ago
    If a car hits a cyclist or pedestrian in Holland, the car is -by definition- at fault. See [1] link in dutch. Free translation of the first part: Cyclist or pedestrians are seen as the weaker traffic participants. Because they are fragile in traffic the law has a special rule on collisions with a motorized vehicle. The driver in the car is responsible for the damage of the cyclist without his guilt having to be proven. [1] http://www.anwb.nl/juridisch-advies/aanrijding-en-dan/aansprakelijkheid/voetganger-of-fietser http://www.anwb.nl/juridisch-advies/aanrijding-en-dan/aanspr...
    - tzs 10y ago
      It looks like the driver does have the possibility of proving that he was not guilty, and if successful limiting his reponsibility to half the damages: https://bicycledutch.wordpress.com/2013/02/21/strict-liability-in-the-netherlands/ https://bicycledutch.wordpress.com/2013/02/21/strict-liabili...