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In other countries, taxes are complicated (no citation needed). There's income tax, but there are also social security payments, industry-specific taxes, etc. A

In other countries, taxes are complicated (no citation needed). There's income tax, but there are also social security payments, industry-specific taxes, etc. And you have to pay for your own education and healthcare! Danish tax is simple and all inclusive. It is around 50%, which is about the same as in US if all hidden obligatory payments are taken into account. But it is all inclusive: all education and healthcare is free in Denmark, and social security grid is immense. I am a pro-free-market person and Ayn Rand admirer. But even I think that Danish system is not that bad: you just pay 50% of your income to the government immediately, and they do not bother you until the next time. On the other hand, in the US, the IRS will pursuit you relentlessly, there are insane friction multipliers like healthcare insurance rising costs spiral, and everything is so complicated that only lawyers are happy about it. Free markets only work if the government is separated from the economy. If they are entangled, you are getting the worst of both worlds.

sausman 10y ago
Another thing to consider is the size of Denmark compared to the US. It's a much smaller political unit which tends to translate into more responsive politicians. Danes have about half the number of representatives we have in the US but less than 5% of our population. https://en.m.wikipedia.org/wiki/United_States_congressional_apportionment https://en.m.wikipedia.org/wiki/United_States_congressional_...
- guard-of-terra 10y ago
  Relevant - Number of seats in the national parliament by country in Europe https://jakubmarian.com/number-of-seats-in-the-national-parliament-by-country-in-europe-total-per-capita-map/ https://jakubmarian.com/number-of-seats-in-the-national-parl... If only they had scatter plot!
JensRex 10y ago
I get your point, but you make it sound like Denmark has flat tax. For the record, it does not.
- yummybear 10y ago
  In fact there are several levels - municipal, state and church tax, bottom, middle and top tax. VAT, as well as other industry taxes, among other a tax on the air in softice and an special nut-tax.
  - MrJagil 10y ago
    Most of those do not interfere with the lives of the average Danish citizen. Church tax is interesting though, and highly debated. Everyone's leaving the churches, especially in Copenhagen. Many teenagers deregisters from the Church of Denmark[0] to save money; the usual counterargument is mostly based on history; i.e. we should support the churches for the buildings'(not the institution) historic value. [0] https://en.wikipedia.org/wiki/Church_of_Denmark https://en.wikipedia.org/wiki/Church_of_Denmark
    - skummetmaelk 10y ago
      The church tax is not the only income for the church. It receives a large amount of money from the general tax, exactly to perform restorations of old buildings and cultural heritage. Even if you deregister from the church and therefore do not pay direct church tax, some of your tax kroner will go to the church anyway.
- vlehto 10y ago
  And they have VAT too. Everybody has to have VAT in EU. Or else EU gets really angry.
  - cerebellum42 10y ago
    It's not like they have VAT because they are in the EU. They had VAT since 1962, and they have had it at the current rate of 25% (higher than most EU countries) since 1992, which is way before the EU VAT directive was even a thing. Edit: Correction, the EU VAT directive actually has its origins before 1992, but still after Denmark already had its own VAT.
tajen 10y ago
Had the same feeling about Australia vs France. In Australia I'd pay $120 for a tax agent (~1% of my income tax), it would be over and I'd be happy about it. In France I feel like I'm being chased, because it's such a socialist country: I earn €2000 per month after tax, I feel like I'm being told by the tax administration that I'm a thieve because I'm rich, even though they're the ones who attempted to double-tax me between Australia and France. I don't mind the 63%[1] that goes to the government between what my customers pay my company and what I receive as a net salary, it's just, they could at least make it respectful and simple. [1] VAT 20%, employer tax 50%, income tax 14% on the remainder, plus an accountant to understand the law and that makes 63%. Yes, I get I'm supposed to receive benefits from the mandatory insurances, except: - by design they never apply to the situations I might fall into (unemployment when you're between 2 countries, medical insurance when you travel, retirement going under the poverty levels by the time I'm 60, paraplegic benefit being under 800€ per month for the rest of your life - how are you supposed to live on that?). - and those taxes don't even succeed at keeping France afloat, because we have a socialist president who's hiring for about $6bn of policemen whose work is just to bust into Muslims' houses. Yeah, unemployment reduced, socialist goal fulfilled. Doesn't sound more social that giving a job to everyone undepending on their race, however. I'd be ok with 63% retention if it were simple and useful.
- yaantc 10y ago
  Not my feeling at all... As an employee filling taxes in France is super simple, just fill a web form with salary and banking pre-filled (just check). Done in under 15mn. Sometimes one can be in odd situation that don't fit well. It's also been my case some years ago when exercising and selling US stock options not considered as such in France (so taxed as salary, ouch...). Just ask them ahead, in my experience they reply and are clear. And I sent them the data with explanation on what I did, so they could correct easily if I misunderstood. Always been fine so far. Maybe you had worst experience and decided to move elsewhere, but no need to paint a bleaker picture. One can question the level of taxes and how they're used, but the payment itself is simple for most I'd say.
- mattmanser 10y ago
  This is very disingenuous, it would be more transparent if you led with the fact you've got a (very) complicated tax situation. VAT is also not your contribution, it's a client's, you collect it because you can offset it. So that 63% figure is pure and utter nonsense.
deleted 10y ago
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ulrikmoe 10y ago
The danish tax system is "simpler" than that of the United States, but it is very far from "simple and all inclusive".
masklinn 10y ago
> In other countries, taxes are complicated (no citation needed). Lots of citations needed actually, from what I know of it the Belgian tax system sounds pretty similar to the Danish one for employees (most taxes are held directly on salary, there's a year-end tally for deductions and the like if necessary), tax rate is ~40% of income.
VeejayRampay 10y ago
Let's be serious here. I'm French, all for high taxes and all but please let's not delude ourselves thinking that American people pay "around 50%" taxes. As soon as you have enough money to afford it, you'll pay a tax lawyer to get that down to about 15% or something, thanks to a bajillion hidden tax system loopholes allowing the rich to get an advantage on the less fortunate. And even if you take into account the price of college, health care and everything, you'll get to about the same amount but the whole point in the US system is that you do NOT have to pay for other people, cause who needs solidarity in a society.
- humanrebar 10y ago
  > As soon as you have enough money to afford it, you'll pay a tax lawyer to get that down to about 15% or something You need a lot of money before that's an option. By that point, you have enough to be one of those citizen-of-the-world globe-trotting types with vacation homes that double as convenient tax shelters. That is to say, the American middle class pays quite a bit in taxes. Even the poor working class pay a flat 12.4% in payroll taxes, maybe 7-8% in sales taxes (depending on locality), and varying amounts in service taxes (fees, tolls, etc.). That's assuming they make too little to pay income tax.
  - rayiner 10y ago
    Working poor also get the earned income tax credit which mostly offsets their payroll taxes.
    - lostboys67 10y ago
      Which is a subsidy for low wage employers
- splintercell 10y ago
  > And even if you take into account the price of college, health care and everything, you'll get to about the same amount but the whole point in the US system is that you do NOT have to pay for other people, cause who needs solidarity in a society. If I wanted solidarity then I'd have stayed in my home country. I like the idea that I am free(er) to chase my dreams and suffer the consequences of my actions. More importantly I like the idea that there are other people who think like me in this country.
flexie 10y ago
Taxes are very complicated in Denmark. I don't know anybody who can calculate their own tax without computer systems, and I say that as a lawyer who talks to accountants and tax advisors regularly. Nobody just pays 50 percent. The tax is progressive and there are numerous deductions and special cases. The actual percentage of income paid is closer to 40 for most people. And then there is the mess of indirect taxes. And the details of the tax rules change significantly all the time. But most of the majority of Danes, which are on some kind of welfare/pension/public education grants (2.2 million out of 4 million voters) and the half of the 1.8 million employed that work for the government, like the current system.
rayiner 10y ago
Americans do not pay anywhere near 50% in taxes. A high income American that makes money as ordinary income (rather than capital gains) and does not own a house and lives in a high tax city will pay almost 50% if you factor in federal, state, healthcare, and sales tax. Everyone else pays a lot less. Typical including health insurance premium is probably around 30-35%. In a state like Georgia with a generous employer that pays your insurance premium, a family can probably pull in close to six figures and pay under 25% all-in if they own a house.
- atemerev 10y ago
  > A high income American that makes money as ordinary income (rather than capital gains) and does not own a house and lives in a high tax city will pay almost 50% if you factor in federal, state, healthcare, and sales tax. You have just described a typical Hacker News reader, who lives in, say, San Francisco, has relatively high income, and pays rent.
  - toomuchtodo 10y ago
    Ie a tiny minority of the US population.
  - rayiner 10y ago
    But if you're a married couple in Georgia with a mortgage and a kid, making $90k total, tax withholding takes out 23% from your paycheck, with the 4% sales tax rate taking out maybe another 1-2% because most of your expenses (e.g. mortgage, services, and food) aren't subject to sales tax. The U.S. is unusual among western countries in how little it taxes the middle class.
  - hundt 10y ago
    Not when you compute actual tax rate as opposed to marginal. For example a single person in SF making $250,000 a year will pay 35-40% of her income to taxes, depending on how much sales tax she pays. [1] That's assuming she does not contribute to a 401k, make charitable donations, or take advantage of any other tax incentives. [1] https://smartasset.com/taxes/income-taxes#N6FTwRB1KN https://smartasset.com/taxes/income-taxes#N6FTwRB1KN
pjc50 10y ago
British system: tax and social security deducted by employer. Council sends you an annual bill vaguely related to the value of your home, paid over 10 months. Healthcare free at the point of use, apart from the £7 prescription charge in England. I was in my mid-30s before I had to file a tax return, and that's only because I'd set up a limited company. The Inland Revenue (HMRC) can be nasty, but nowhere near as nasty as the benefits accountants. HMRC website is also rather good and you can calculate and file online.
- simonh 10y ago
  Seconded, as a Brit the only times I've ever needed to fill out a tax return it was over some business expenses reimbursements.
- spoonie 10y ago
  Small correction, the council (municipal government) charges the occupant of the house, not the owner. As a renter in London I was paying council tax. Edit: The biggest downside to the UK system is there isn't an obvious end of year review, so many people don't look at their taxes. I wonder how many people are overcharged?
  - pjc50 10y ago
    Correct, that's a detail I'd left out for simplicity. End of year: That's your P60 + end of year payslip, isn't it? PAYE overcharging is certainly possible when you change jobs if you lose the P45 or end up on an emergency tax code for some reason, but if you take the 30 seconds to check your payslip every month you're more likely to notice. What's more messy is the tax credit system. I hear that the way to maximise tax chaos for yourself is to have two self-employed divorced parents alternating custody of a child every month and claiming WFTC.
- robk 10y ago
  Free healthcare at the point of use won't survive in the long term. Too little funding and too much use. There's no negative externality from people abusing it.
toomanybeersies 10y ago
I think New Zealand probably has one of the most streamlined tax systems in the world, at least for the average person. GST (essentially sales tax) is levied at 15% on all goods and services except for domestic rent and financial services (and one or two rare exceptions that don't apply to the vast majority of cases). Your income tax rate is figured from a flowchart, it's really simple: https://www.ird.govt.nz/resources/b/f/bf9db1804ba3cfc08a6ebf9ef8e4b077/ir330.pdf https://www.ird.govt.nz/resources/b/f/bf9db1804ba3cfc08a6ebf... As for tax returns, it's as simple as going online, adding up your interest earned during the year (most banks will do this for you and send it to you) and adding your dividends earned. It's a bit more work if you do any contracting or freelancing, but it's still simple enough that the vast majority of people can do it while drinking a beer or two on a Sunday afternoon.
- vidarh 10y ago
  In Norway, the tax authority will send you a summary telling you what you owe or what they owe, and if you don't have corrections you don't need to do anything. (all bank accounts in Norway are keyed to a national ID number assigned at birth, and the banks report all interest income and loss (as interest on debt can be subtracted from your taxable income), and your employer(s) reports your income) There are some exceptions, in cases where you have particularly complex tax matters, but most people don't have to do anything any more.
  - toomanybeersies 10y ago
    I'm not sure why they don't do that in New Zealand, the numbers are all provided, you just have to type them in. Perhaps it's a privacy thing? One of the advantages is that you can check if you're owing money before filing a Personal Tax Summary (they have a tool to check if you'd owe money or be paid money), and you don't have to file for one if you owe money, and as long as it's less than a certain amount ($500?) then they don't care.
    - vidarh 10y ago
      My guess is it's just a matter of slowly changing policy. In Norway it went paper return => online return => online summary that you had to confirm => summary that you only needed to act on if you had corrections. That process took many years, I'm assuming as they wanted to iron out any issues with one step before taking the next.
vidarh 10y ago
> It is around 50% No, it isn't. The total tax wedge under OECD definitions, which includes employer payroll taxes, the Danish income tax burden is on average around 38%. Excluding employers payroll taxes it's around 36%. For comparison, the "all in" number for the US is around 31%. The OECD average is 36%. The only OECD country that crosses the 50% mark is Belgium, which consistently is one of the highest tax countries in the world. You can find this data here [1], and while the publisher isn't exactly neutral, the source for all the data is an OECD publication which is also freely available (I don't have the link handy). The OECD report has far more detail [1] http://taxfoundation.org/article/comparison-tax-burden-labor-oecd http://taxfoundation.org/article/comparison-tax-burden-labor...
- deleted 10y ago
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- dv_dt 10y ago
  If you fully load the per-capita US healthcare costs to that 31% and make it a closer comparison based on services received, I would guess the US percentage will go much higher than the Danish tax burden.
  - vidarh 10y ago
    Absolutely. The difference for most Europen countries vs. the US, other than the top 5-6, is low enough to get eaten up by healthcare and similar very quickly.
- josu 10y ago
  Why wouldn't you take into account the VAT which taxes all consumption?
  - vidarh 10y ago
    It's a good question. It's pretty arbitrary, to be honest - with all of these things, despite the reasons I set out below - it's about what you want to highlight, and for what you want to use the data. But there are two specific main arguments for presenting the data this way: All prices in most countries that has VAT or GST or equivalent tends to be given tax inclusive. E.g. in most of Europe, a consumer can legally demand to pay the stated price if a price is advertised directed at consumers even if it is not specified that the price was meant to be VAT exclusive, or in some countries even if it is explicitly stated that the price is VAT exclusive. So the first answer: Because when we otherwise compare price levels we compare the sticker price. If we otherwise treat the VAT separate from the goods, then that makes no sense. It's part of the complexity of trying to compare cost-of-living. The other reason is that while the tax wedge on income is relatively stable across large parts of the population, VAT varies massively from person to person on the same income. A tax wedge excluding VAT tells us a lot about what proportion large swathes of the population will be taxed, and can't avoid paying. But for VAT, a large proportion of it comes down to personal consumption choices. To illustrate, let's assume 30% income tax (and lets forget about payroll taxes). This person has 70% left. Now, if I were to pay 10 percentage points of the gross to rent somewhere small, I have 60% left to spend. If I'm not bothered about a pension (stupid, yes), most of that might get towards VAT'able consumption (though some will e.g. be VAT-exempt goods like basic food stuffs). At a 25% VAT rate, that means 15% of my gross salary goes to VAT. If, on the other hand I earn exactly the same, but live in an expensive place that takes 30% of my gross salary, and I pay 10% of my gross towards pensions, I now have only 30% left to spend, and if make the same assumptions about what I buy I'd end up paying 7.5% of my gross in VAT, all through my own choices. In reality, in the latter case you'd pay even less, as a larger proportion of the remaining cash would go towards exempt/zero-rated products like food (your total tax wedge would also be far lower, as in most countries those pension contributions would result in reduced tax). 1%-5% of the gross towards VAT is relatively typical even in countries with 25% VAT headline VAT rates. For someone with a low salary in a low VAT country it may very well end up being well below 1% (because low salary tends to mean a larger proportion goes to housing and food, leaving less for consumption affected by VAT) So the second answer is that the VAT part is to a large extend under individual control, and so varies within the same income tax bracket, and so confuses the issue or a lot of the things you'd use the total tax wedge to get an indication of. That doesn't mean that totals including VAT/GST or equivalent would be wrong/bad/misleading any more than excluding them is. They just show different things, and you need to be aware of different things when trying to use them in comparisons. A lot of reports on taxation will include a variety of different breakdowns like this to give a fuller picture.
cloudjacker 10y ago
Don't forget the 22% VAT on goods and services lol
- egman_ekki 10y ago
  It's actually 25%, unfortunately...
_of 10y ago
Having lived a big chunk of my life in both the US and a Scandinavian country, I would say that taxes are a lot more complicated in the US. There is no way you can do your taxes in the US without the help of special computer software (e.g. turbotax) or help from professional accountants.

sausman 10y ago

Another thing to consider is the size of Denmark compared to the US. It's a much smaller political unit which tends to translate into more responsive politicians. Danes have about half the number of representatives we have in the US but less than 5% of our population. https://en.m.wikipedia.org/wiki/United_States_congressional_apportionment https://en.m.wikipedia.org/wiki/United_States_congressional_...

guard-of-terra 10y ago
Relevant - Number of seats in the national parliament by country in Europe https://jakubmarian.com/number-of-seats-in-the-national-parliament-by-country-in-europe-total-per-capita-map/ https://jakubmarian.com/number-of-seats-in-the-national-parl... If only they had scatter plot!

JensRex 10y ago

I get your point, but you make it sound like Denmark has flat tax. For the record, it does not.

yummybear 10y ago
In fact there are several levels - municipal, state and church tax, bottom, middle and top tax. VAT, as well as other industry taxes, among other a tax on the air in softice and an special nut-tax.
- MrJagil 10y ago
  Most of those do not interfere with the lives of the average Danish citizen. Church tax is interesting though, and highly debated. Everyone's leaving the churches, especially in Copenhagen. Many teenagers deregisters from the Church of Denmark[0] to save money; the usual counterargument is mostly based on history; i.e. we should support the churches for the buildings'(not the institution) historic value. [0] https://en.wikipedia.org/wiki/Church_of_Denmark https://en.wikipedia.org/wiki/Church_of_Denmark
  - skummetmaelk 10y ago
    The church tax is not the only income for the church. It receives a large amount of money from the general tax, exactly to perform restorations of old buildings and cultural heritage. Even if you deregister from the church and therefore do not pay direct church tax, some of your tax kroner will go to the church anyway.
vlehto 10y ago
And they have VAT too. Everybody has to have VAT in EU. Or else EU gets really angry.
- cerebellum42 10y ago
  It's not like they have VAT because they are in the EU. They had VAT since 1962, and they have had it at the current rate of 25% (higher than most EU countries) since 1992, which is way before the EU VAT directive was even a thing. Edit: Correction, the EU VAT directive actually has its origins before 1992, but still after Denmark already had its own VAT.

tajen 10y ago

Had the same feeling about Australia vs France. In Australia I'd pay $120 for a tax agent (~1% of my income tax), it would be over and I'd be happy about it. In France I feel like I'm being chased, because it's such a socialist country: I earn €2000 per month after tax, I feel like I'm being told by the tax administration that I'm a thieve because I'm rich, even though they're the ones who attempted to double-tax me between Australia and France. I don't mind the 63%[1] that goes to the government between what my customers pay my company and what I receive as a net salary, it's just, they could at least make it respectful and simple. [1] VAT 20%, employer tax 50%, income tax 14% on the remainder, plus an accountant to understand the law and that makes 63%. Yes, I get I'm supposed to receive benefits from the mandatory insurances, except: - by design they never apply to the situations I might fall into (unemployment when you're between 2 countries, medical insurance when you travel, retirement going under the poverty levels by the time I'm 60, paraplegic benefit being under 800€ per month for the rest of your life - how are you supposed to live on that?). - and those taxes don't even succeed at keeping France afloat, because we have a socialist president who's hiring for about $6bn of policemen whose work is just to bust into Muslims' houses. Yeah, unemployment reduced, socialist goal fulfilled. Doesn't sound more social that giving a job to everyone undepending on their race, however. I'd be ok with 63% retention if it were simple and useful.

yaantc 10y ago
Not my feeling at all... As an employee filling taxes in France is super simple, just fill a web form with salary and banking pre-filled (just check). Done in under 15mn. Sometimes one can be in odd situation that don't fit well. It's also been my case some years ago when exercising and selling US stock options not considered as such in France (so taxed as salary, ouch...). Just ask them ahead, in my experience they reply and are clear. And I sent them the data with explanation on what I did, so they could correct easily if I misunderstood. Always been fine so far. Maybe you had worst experience and decided to move elsewhere, but no need to paint a bleaker picture. One can question the level of taxes and how they're used, but the payment itself is simple for most I'd say.
mattmanser 10y ago
This is very disingenuous, it would be more transparent if you led with the fact you've got a (very) complicated tax situation. VAT is also not your contribution, it's a client's, you collect it because you can offset it. So that 63% figure is pure and utter nonsense.

deleted 10y ago

[deleted]

ulrikmoe 10y ago

The danish tax system is "simpler" than that of the United States, but it is very far from "simple and all inclusive".

masklinn 10y ago

> In other countries, taxes are complicated (no citation needed). Lots of citations needed actually, from what I know of it the Belgian tax system sounds pretty similar to the Danish one for employees (most taxes are held directly on salary, there's a year-end tally for deductions and the like if necessary), tax rate is ~40% of income.

VeejayRampay 10y ago

Let's be serious here. I'm French, all for high taxes and all but please let's not delude ourselves thinking that American people pay "around 50%" taxes. As soon as you have enough money to afford it, you'll pay a tax lawyer to get that down to about 15% or something, thanks to a bajillion hidden tax system loopholes allowing the rich to get an advantage on the less fortunate. And even if you take into account the price of college, health care and everything, you'll get to about the same amount but the whole point in the US system is that you do NOT have to pay for other people, cause who needs solidarity in a society.

humanrebar 10y ago
> As soon as you have enough money to afford it, you'll pay a tax lawyer to get that down to about 15% or something You need a lot of money before that's an option. By that point, you have enough to be one of those citizen-of-the-world globe-trotting types with vacation homes that double as convenient tax shelters. That is to say, the American middle class pays quite a bit in taxes. Even the poor working class pay a flat 12.4% in payroll taxes, maybe 7-8% in sales taxes (depending on locality), and varying amounts in service taxes (fees, tolls, etc.). That's assuming they make too little to pay income tax.
- rayiner 10y ago
  Working poor also get the earned income tax credit which mostly offsets their payroll taxes.
  - lostboys67 10y ago
    Which is a subsidy for low wage employers
splintercell 10y ago
> And even if you take into account the price of college, health care and everything, you'll get to about the same amount but the whole point in the US system is that you do NOT have to pay for other people, cause who needs solidarity in a society. If I wanted solidarity then I'd have stayed in my home country. I like the idea that I am free(er) to chase my dreams and suffer the consequences of my actions. More importantly I like the idea that there are other people who think like me in this country.

flexie 10y ago

Taxes are very complicated in Denmark. I don't know anybody who can calculate their own tax without computer systems, and I say that as a lawyer who talks to accountants and tax advisors regularly. Nobody just pays 50 percent. The tax is progressive and there are numerous deductions and special cases. The actual percentage of income paid is closer to 40 for most people. And then there is the mess of indirect taxes. And the details of the tax rules change significantly all the time. But most of the majority of Danes, which are on some kind of welfare/pension/public education grants (2.2 million out of 4 million voters) and the half of the 1.8 million employed that work for the government, like the current system.

rayiner 10y ago

Americans do not pay anywhere near 50% in taxes. A high income American that makes money as ordinary income (rather than capital gains) and does not own a house and lives in a high tax city will pay almost 50% if you factor in federal, state, healthcare, and sales tax. Everyone else pays a lot less. Typical including health insurance premium is probably around 30-35%. In a state like Georgia with a generous employer that pays your insurance premium, a family can probably pull in close to six figures and pay under 25% all-in if they own a house.

atemerev 10y ago
> A high income American that makes money as ordinary income (rather than capital gains) and does not own a house and lives in a high tax city will pay almost 50% if you factor in federal, state, healthcare, and sales tax. You have just described a typical Hacker News reader, who lives in, say, San Francisco, has relatively high income, and pays rent.
- toomuchtodo 10y ago
  Ie a tiny minority of the US population.
- rayiner 10y ago
  But if you're a married couple in Georgia with a mortgage and a kid, making $90k total, tax withholding takes out 23% from your paycheck, with the 4% sales tax rate taking out maybe another 1-2% because most of your expenses (e.g. mortgage, services, and food) aren't subject to sales tax. The U.S. is unusual among western countries in how little it taxes the middle class.
- hundt 10y ago
  Not when you compute actual tax rate as opposed to marginal. For example a single person in SF making $250,000 a year will pay 35-40% of her income to taxes, depending on how much sales tax she pays. [1] That's assuming she does not contribute to a 401k, make charitable donations, or take advantage of any other tax incentives. [1] https://smartasset.com/taxes/income-taxes#N6FTwRB1KN https://smartasset.com/taxes/income-taxes#N6FTwRB1KN

pjc50 10y ago

British system: tax and social security deducted by employer. Council sends you an annual bill vaguely related to the value of your home, paid over 10 months. Healthcare free at the point of use, apart from the £7 prescription charge in England. I was in my mid-30s before I had to file a tax return, and that's only because I'd set up a limited company. The Inland Revenue (HMRC) can be nasty, but nowhere near as nasty as the benefits accountants. HMRC website is also rather good and you can calculate and file online.

simonh 10y ago
Seconded, as a Brit the only times I've ever needed to fill out a tax return it was over some business expenses reimbursements.
spoonie 10y ago
Small correction, the council (municipal government) charges the occupant of the house, not the owner. As a renter in London I was paying council tax. Edit: The biggest downside to the UK system is there isn't an obvious end of year review, so many people don't look at their taxes. I wonder how many people are overcharged?
- pjc50 10y ago
  Correct, that's a detail I'd left out for simplicity. End of year: That's your P60 + end of year payslip, isn't it? PAYE overcharging is certainly possible when you change jobs if you lose the P45 or end up on an emergency tax code for some reason, but if you take the 30 seconds to check your payslip every month you're more likely to notice. What's more messy is the tax credit system. I hear that the way to maximise tax chaos for yourself is to have two self-employed divorced parents alternating custody of a child every month and claiming WFTC.
robk 10y ago
Free healthcare at the point of use won't survive in the long term. Too little funding and too much use. There's no negative externality from people abusing it.

toomanybeersies 10y ago

I think New Zealand probably has one of the most streamlined tax systems in the world, at least for the average person. GST (essentially sales tax) is levied at 15% on all goods and services except for domestic rent and financial services (and one or two rare exceptions that don't apply to the vast majority of cases). Your income tax rate is figured from a flowchart, it's really simple: https://www.ird.govt.nz/resources/b/f/bf9db1804ba3cfc08a6ebf9ef8e4b077/ir330.pdf https://www.ird.govt.nz/resources/b/f/bf9db1804ba3cfc08a6ebf... As for tax returns, it's as simple as going online, adding up your interest earned during the year (most banks will do this for you and send it to you) and adding your dividends earned. It's a bit more work if you do any contracting or freelancing, but it's still simple enough that the vast majority of people can do it while drinking a beer or two on a Sunday afternoon.

vidarh 10y ago
In Norway, the tax authority will send you a summary telling you what you owe or what they owe, and if you don't have corrections you don't need to do anything. (all bank accounts in Norway are keyed to a national ID number assigned at birth, and the banks report all interest income and loss (as interest on debt can be subtracted from your taxable income), and your employer(s) reports your income) There are some exceptions, in cases where you have particularly complex tax matters, but most people don't have to do anything any more.
- toomanybeersies 10y ago
  I'm not sure why they don't do that in New Zealand, the numbers are all provided, you just have to type them in. Perhaps it's a privacy thing? One of the advantages is that you can check if you're owing money before filing a Personal Tax Summary (they have a tool to check if you'd owe money or be paid money), and you don't have to file for one if you owe money, and as long as it's less than a certain amount ($500?) then they don't care.
  - vidarh 10y ago
    My guess is it's just a matter of slowly changing policy. In Norway it went paper return => online return => online summary that you had to confirm => summary that you only needed to act on if you had corrections. That process took many years, I'm assuming as they wanted to iron out any issues with one step before taking the next.

vidarh 10y ago

> It is around 50% No, it isn't. The total tax wedge under OECD definitions, which includes employer payroll taxes, the Danish income tax burden is on average around 38%. Excluding employers payroll taxes it's around 36%. For comparison, the "all in" number for the US is around 31%. The OECD average is 36%. The only OECD country that crosses the 50% mark is Belgium, which consistently is one of the highest tax countries in the world. You can find this data here [1], and while the publisher isn't exactly neutral, the source for all the data is an OECD publication which is also freely available (I don't have the link handy). The OECD report has far more detail [1] http://taxfoundation.org/article/comparison-tax-burden-labor-oecd http://taxfoundation.org/article/comparison-tax-burden-labor...

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dv_dt 10y ago
If you fully load the per-capita US healthcare costs to that 31% and make it a closer comparison based on services received, I would guess the US percentage will go much higher than the Danish tax burden.
- vidarh 10y ago
  Absolutely. The difference for most Europen countries vs. the US, other than the top 5-6, is low enough to get eaten up by healthcare and similar very quickly.
josu 10y ago
Why wouldn't you take into account the VAT which taxes all consumption?
- vidarh 10y ago
  It's a good question. It's pretty arbitrary, to be honest - with all of these things, despite the reasons I set out below - it's about what you want to highlight, and for what you want to use the data. But there are two specific main arguments for presenting the data this way: All prices in most countries that has VAT or GST or equivalent tends to be given tax inclusive. E.g. in most of Europe, a consumer can legally demand to pay the stated price if a price is advertised directed at consumers even if it is not specified that the price was meant to be VAT exclusive, or in some countries even if it is explicitly stated that the price is VAT exclusive. So the first answer: Because when we otherwise compare price levels we compare the sticker price. If we otherwise treat the VAT separate from the goods, then that makes no sense. It's part of the complexity of trying to compare cost-of-living. The other reason is that while the tax wedge on income is relatively stable across large parts of the population, VAT varies massively from person to person on the same income. A tax wedge excluding VAT tells us a lot about what proportion large swathes of the population will be taxed, and can't avoid paying. But for VAT, a large proportion of it comes down to personal consumption choices. To illustrate, let's assume 30% income tax (and lets forget about payroll taxes). This person has 70% left. Now, if I were to pay 10 percentage points of the gross to rent somewhere small, I have 60% left to spend. If I'm not bothered about a pension (stupid, yes), most of that might get towards VAT'able consumption (though some will e.g. be VAT-exempt goods like basic food stuffs). At a 25% VAT rate, that means 15% of my gross salary goes to VAT. If, on the other hand I earn exactly the same, but live in an expensive place that takes 30% of my gross salary, and I pay 10% of my gross towards pensions, I now have only 30% left to spend, and if make the same assumptions about what I buy I'd end up paying 7.5% of my gross in VAT, all through my own choices. In reality, in the latter case you'd pay even less, as a larger proportion of the remaining cash would go towards exempt/zero-rated products like food (your total tax wedge would also be far lower, as in most countries those pension contributions would result in reduced tax). 1%-5% of the gross towards VAT is relatively typical even in countries with 25% VAT headline VAT rates. For someone with a low salary in a low VAT country it may very well end up being well below 1% (because low salary tends to mean a larger proportion goes to housing and food, leaving less for consumption affected by VAT) So the second answer is that the VAT part is to a large extend under individual control, and so varies within the same income tax bracket, and so confuses the issue or a lot of the things you'd use the total tax wedge to get an indication of. That doesn't mean that totals including VAT/GST or equivalent would be wrong/bad/misleading any more than excluding them is. They just show different things, and you need to be aware of different things when trying to use them in comparisons. A lot of reports on taxation will include a variety of different breakdowns like this to give a fuller picture.

cloudjacker 10y ago

Don't forget the 22% VAT on goods and services lol

egman_ekki 10y ago
It's actually 25%, unfortunately...

_of 10y ago

Having lived a big chunk of my life in both the US and a Scandinavian country, I would say that taxes are a lot more complicated in the US. There is no way you can do your taxes in the US without the help of special computer software (e.g. turbotax) or help from professional accountants.