4 ms·

> My individual burden, however, is far more reasonable than > an American might assume. I pay an annual income tax of > about 23%. How comes this number is

> My individual burden, however, is far more reasonable than > an American might assume. I pay an annual income tax of > about 23%. How comes this number is that low? Tax revenue in France account for about 48% of the country's GDP[1]. I'm living in Belgium, and my payroll tax is already higher than these 23%. -- [1] https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...

EliRivers 10y ago
Income tax is not the only tax.
gambiting 10y ago
It's probably tiered, like in many other EU countries. In UK for example you don't pay any tax on the first 10k earned, then 20% on anything between 10k and 40k, and then 40% on anything above 40k. I think there's a tier above it as well, but I'm not 100% sure. I know France has more tiers and they are more aggressive(80% being the highest I think?)
- sgt101 10y ago
  There's a 45% tier and also super tax that kicks in at £100k due to having your £10k allowance removed (so from 100k to 120k you have to pay ~70%)
ThePhysicist 10y ago
In France you pay 0 % taxes for the first 9.700 € of income, then 14 % for everything up to 26.791 €, then 30 % for everything up to 71.826 €, then 41 % for everything up to 152.108 € and 45 % for everything beyond that [1]. Hence 23 % effective tax rate sounds reasonable for an average income of around 50.000 €. The tax system in many European countries is similar btw, as is the health system. [1] https://fr.wikipedia.org/wiki/Bar%C3%A8mes_de_l'imp%C3%B4t_sur_le_revenu_en_France https://fr.wikipedia.org/wiki/Bar%C3%A8mes_de_l'imp%C3%B4t_s...
- coob 10y ago
  That only covers income tax - social security contributions are heavy (but deductible from the income tax).
- pmontra 10y ago
  And btw there is a very good reason for those tiered systems. Imagine people making 26k and paying 14%. They end up with 22,360. If they get a 5k pay rise they make 31k, pay 30% and end up with 21,700. Would they want that raise? No thanks, but a system preventing some pay raises would be insane.
  - glandium 10y ago
    The interesting thing is that many people believe it's that way, and it can be hard to convince them that it's not.
  - galacticpony 10y ago
    That's not how it works. You pay nothing on the first 9700€ You pay 14% on the money you make above that, that is 14% of ~17k€ You then pay 30% on the money above that, that is 30% of the extra 5k.
    - pmontra 10y ago
      I understood perfectly how it works: it works how you explained. My example was for a system that doesn't work in that way but switches from 14% to 30% for all the income, and not only for the amount above the threshold. Maybe I should have worded it better but I take the downvotes I got as a demonstration of my point, that it would be insane.
- ekianjo 10y ago
  You don't live in urban centers like Paris with 50k revenue.
  - corin_ 10y ago
hueving 10y ago
>How comes this number is that low? A low income person in the US can pay effectively 0%. Your percentage in most countries depends heavily on how much you make.
merb 10y ago
I wondered about that as well, I pay like 40%...
- jjnoakes 10y ago
  40% on all of your income? Or is it tiered? Where do you live?
  - merb 10y ago
    (Germany) well all taxes together, I'm not sure the social part is probably not a tax, but over the years it feels more like a tax, since you actually get less and less per year, but you need to pay more. I mean just looking at my rents or healthcare... The system is broken by design, since actually people that earn better could actually use a privat healthcare/rent. Well some could argue that people who earn more would abuse the system anyway or would leave the country, however at the moment it is worse since if everybody would pay, all people would need to pay less and actually letting people have a private healthcare/rent makes the system anti social especially if you get better services while inside a private system. The same with our taxes, they are too progressive, which means that if you are like me you are inside the worst part of the curve which is a little bit unfair.
Carioca 10y ago
Different countries have wildly different tax strategies. Sales tax, property tax, corporate tax are some avenues that may make up the difference here. Belgium in particular IIRC draws a large portion of its tax revenue from income taxes
glandium 10y ago
Income tax, however, doesn't cover social security. That's covered by the taxes an employer pays, and those are larger than 23% (but also contain other taxes). It's all detailed on pay slips. https://fr.wikipedia.org/wiki/Bulletin_de_salaire https://fr.wikipedia.org/wiki/Bulletin_de_salaire
- maelito 10y ago
  It's covered by some of the taxes you and your employer pay (though it's transparent for you) that are roughly proportional to your salary. For most people : Health cotisation : ~14% CSG (on all types of revenue, not only salaries) : ~8% Some other taxes go to fund the medical system (e.g. Forfait social, Taxe sur les salaires, TVA on drugs), but as far as I know those two are the main ones.
maelito 10y ago
"annual income tax", which is "impôt sur le revenu" in french, is irrelevant here, it doesn't fund the social security system.
corford 10y ago
Because income tax isn't the whole story. The French also pay social charges: ~8% on salary (and, unlike income tax, no relief on the first €9.700); ~15% on capital income (e.g. a house sale, investments etc.). Employer's also have to contribute to employee's social security (~13%). So, total tax revenue is closer to ~45% of gross salary (excluding TVA tax levied on purchases made with your net income). See: http://www.cleiss.fr/docs/regimes/regime_france/an_a2.html http://www.cleiss.fr/docs/regimes/regime_france/an_a2.html Long story short: the level of care is fantastic but it costs the country a fortune and there's huge waste within the system (seen it first hand). Note too: most French also pay for private health insurance to augment the default level of state care (for things like dentistry work, optician etc.). So it ain't cheap but if I had a serious condition there's no place in Europe I'd rather be to have it treated.

EliRivers 10y ago

Income tax is not the only tax.

gambiting 10y ago

It's probably tiered, like in many other EU countries. In UK for example you don't pay any tax on the first 10k earned, then 20% on anything between 10k and 40k, and then 40% on anything above 40k. I think there's a tier above it as well, but I'm not 100% sure. I know France has more tiers and they are more aggressive(80% being the highest I think?)

sgt101 10y ago
There's a 45% tier and also super tax that kicks in at £100k due to having your £10k allowance removed (so from 100k to 120k you have to pay ~70%)

ThePhysicist 10y ago

In France you pay 0 % taxes for the first 9.700 € of income, then 14 % for everything up to 26.791 €, then 30 % for everything up to 71.826 €, then 41 % for everything up to 152.108 € and 45 % for everything beyond that [1]. Hence 23 % effective tax rate sounds reasonable for an average income of around 50.000 €. The tax system in many European countries is similar btw, as is the health system. [1] https://fr.wikipedia.org/wiki/Bar%C3%A8mes_de_l'imp%C3%B4t_sur_le_revenu_en_France https://fr.wikipedia.org/wiki/Bar%C3%A8mes_de_l'imp%C3%B4t_s...

coob 10y ago
That only covers income tax - social security contributions are heavy (but deductible from the income tax).
pmontra 10y ago
And btw there is a very good reason for those tiered systems. Imagine people making 26k and paying 14%. They end up with 22,360. If they get a 5k pay rise they make 31k, pay 30% and end up with 21,700. Would they want that raise? No thanks, but a system preventing some pay raises would be insane.
- glandium 10y ago
  The interesting thing is that many people believe it's that way, and it can be hard to convince them that it's not.
- galacticpony 10y ago
  That's not how it works. You pay nothing on the first 9700€ You pay 14% on the money you make above that, that is 14% of ~17k€ You then pay 30% on the money above that, that is 30% of the extra 5k.
  - pmontra 10y ago
    I understood perfectly how it works: it works how you explained. My example was for a system that doesn't work in that way but switches from 14% to 30% for all the income, and not only for the amount above the threshold. Maybe I should have worded it better but I take the downvotes I got as a demonstration of my point, that it would be insane.
ekianjo 10y ago
You don't live in urban centers like Paris with 50k revenue.
- corin_ 10y ago

hueving 10y ago

>How comes this number is that low? A low income person in the US can pay effectively 0%. Your percentage in most countries depends heavily on how much you make.

merb 10y ago

I wondered about that as well, I pay like 40%...

jjnoakes 10y ago
40% on all of your income? Or is it tiered? Where do you live?
- merb 10y ago
  (Germany) well all taxes together, I'm not sure the social part is probably not a tax, but over the years it feels more like a tax, since you actually get less and less per year, but you need to pay more. I mean just looking at my rents or healthcare... The system is broken by design, since actually people that earn better could actually use a privat healthcare/rent. Well some could argue that people who earn more would abuse the system anyway or would leave the country, however at the moment it is worse since if everybody would pay, all people would need to pay less and actually letting people have a private healthcare/rent makes the system anti social especially if you get better services while inside a private system. The same with our taxes, they are too progressive, which means that if you are like me you are inside the worst part of the curve which is a little bit unfair.

Carioca 10y ago

Different countries have wildly different tax strategies. Sales tax, property tax, corporate tax are some avenues that may make up the difference here. Belgium in particular IIRC draws a large portion of its tax revenue from income taxes

glandium 10y ago

Income tax, however, doesn't cover social security. That's covered by the taxes an employer pays, and those are larger than 23% (but also contain other taxes). It's all detailed on pay slips. https://fr.wikipedia.org/wiki/Bulletin_de_salaire https://fr.wikipedia.org/wiki/Bulletin_de_salaire

maelito 10y ago
It's covered by some of the taxes you and your employer pay (though it's transparent for you) that are roughly proportional to your salary. For most people : Health cotisation : ~14% CSG (on all types of revenue, not only salaries) : ~8% Some other taxes go to fund the medical system (e.g. Forfait social, Taxe sur les salaires, TVA on drugs), but as far as I know those two are the main ones.

maelito 10y ago

"annual income tax", which is "impôt sur le revenu" in french, is irrelevant here, it doesn't fund the social security system.

corford 10y ago

Because income tax isn't the whole story. The French also pay social charges: ~8% on salary (and, unlike income tax, no relief on the first €9.700); ~15% on capital income (e.g. a house sale, investments etc.). Employer's also have to contribute to employee's social security (~13%). So, total tax revenue is closer to ~45% of gross salary (excluding TVA tax levied on purchases made with your net income). See: http://www.cleiss.fr/docs/regimes/regime_france/an_a2.html http://www.cleiss.fr/docs/regimes/regime_france/an_a2.html Long story short: the level of care is fantastic but it costs the country a fortune and there's huge waste within the system (seen it first hand). Note too: most French also pay for private health insurance to augment the default level of state care (for things like dentistry work, optician etc.). So it ain't cheap but if I had a serious condition there's no place in Europe I'd rather be to have it treated.