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Someone living in California making $100k pays: Federal income tax: $18,047 State income tax: $6,288 Payroll tax: $7,650 Total tax: $31,985 Someone living in

Someone living in California making $100k pays: Federal income tax: $18,047 State income tax: $6,288 Payroll tax: $7,650 Total tax: $31,985 Someone living in Australia making $100k pays: Income tax: $24,632 Medicare levy: $2,000 Medicare levy surcharge (?): $1,000 Total tax: $27,632 Unless I've missed a tax (I looked at payroll tax rates too but it looks like those are only paid by the employer?), it seems like the Australian actually pays less tax unless you live in the US in an income tax-free state. But then once you add in the cost of health care, Australia ends up cheaper again...

DrScump 10y ago
Are there no provincial or city income taxes? It's the CA income tax that distorts the comparison. Had you chosen TX or WA (for example), they are lower than Australia.
- inopinatus 10y ago
  There are no state or municipal income taxes on individuals. The major state taxes are on property conveyance, payroll, automobiles, gambling. Note that a direct comparison by salary at $100k is potentially misleading due to exchange rates, differences in wage distribution, cost of living &c.
  - nodamage 10y ago
    I think it's better interpreted as comparing effective tax rates, i.e. 27.6% vs 31.9% of gross income. You're right that the salaries not directly comparable for the reasons you listed, but it's also pretty clear that they're not that far apart. Certainly not enough to conclude that Australians are "paying higher taxes to offset the cost of health care". By examining the numbers it's pretty clear that we're paying more for health care in the US and getting less for it.
- nodamage 10y ago
  As far as I can tell, there's no state income tax in Australia. Not sure about city taxes. I did mention that even if you live in a tax-free state in the US, the tax savings is essentially wiped out by having to pay for your own health care. Especially if you have a spouse and kids, between monthly health care premiums and deductibles that's probably another $10-$15k out of pocket, if not more. Edit: Just ran a family of 4 (30 year old parents, 5 year old kids) through an ACA calculator. A silver plan runs around $800/month, with a total out-of-pocket max of $14,300. So, up to $25k/year in extra health care costs. It's absurd.
- rweir 10y ago
  > Are there no provincial or city income taxes? no. there are "rates" paid to city/town for garbage collection, etc, but that would be on the order of $2000 more, for home owners only, for the nicest parts of cities.
joshuaheard 10y ago
The VAT in Australia is 10% while the average sales tax in the US is 5%, so that's an extra $5,000 in your example. Also, the payroll tax is over 5%, no matter who pays it (taxes are paid by people, not "employers"), so that's another $2,000. So Australians pay roughly 10% more in taxes.
- nodamage 10y ago
  If you're going to count the employer side of the payroll tax, you have to do so for the US too. Total payroll tax in the US is 15.3% (of which the employee pays half and the employer pays half). So go ahead and double that payroll tax to $15,300. VAT is based on spending, so you can't assume that $5k is actually being spent on VAT. Besides, many cities in the US tack on their own sales tax and it gets close to 10% anyway (Seattle is 9.6%, Los Angeles is 9.5%, San Francisco is 8.75%)

DrScump 10y ago

Are there no provincial or city income taxes? It's the CA income tax that distorts the comparison. Had you chosen TX or WA (for example), they are lower than Australia.

inopinatus 10y ago
There are no state or municipal income taxes on individuals. The major state taxes are on property conveyance, payroll, automobiles, gambling. Note that a direct comparison by salary at $100k is potentially misleading due to exchange rates, differences in wage distribution, cost of living &c.
- nodamage 10y ago
  I think it's better interpreted as comparing effective tax rates, i.e. 27.6% vs 31.9% of gross income. You're right that the salaries not directly comparable for the reasons you listed, but it's also pretty clear that they're not that far apart. Certainly not enough to conclude that Australians are "paying higher taxes to offset the cost of health care". By examining the numbers it's pretty clear that we're paying more for health care in the US and getting less for it.
nodamage 10y ago
As far as I can tell, there's no state income tax in Australia. Not sure about city taxes. I did mention that even if you live in a tax-free state in the US, the tax savings is essentially wiped out by having to pay for your own health care. Especially if you have a spouse and kids, between monthly health care premiums and deductibles that's probably another $10-$15k out of pocket, if not more. Edit: Just ran a family of 4 (30 year old parents, 5 year old kids) through an ACA calculator. A silver plan runs around $800/month, with a total out-of-pocket max of $14,300. So, up to $25k/year in extra health care costs. It's absurd.
rweir 10y ago
> Are there no provincial or city income taxes? no. there are "rates" paid to city/town for garbage collection, etc, but that would be on the order of $2000 more, for home owners only, for the nicest parts of cities.

joshuaheard 10y ago

The VAT in Australia is 10% while the average sales tax in the US is 5%, so that's an extra $5,000 in your example. Also, the payroll tax is over 5%, no matter who pays it (taxes are paid by people, not "employers"), so that's another $2,000. So Australians pay roughly 10% more in taxes.

nodamage 10y ago
If you're going to count the employer side of the payroll tax, you have to do so for the US too. Total payroll tax in the US is 15.3% (of which the employee pays half and the employer pays half). So go ahead and double that payroll tax to $15,300. VAT is based on spending, so you can't assume that $5k is actually being spent on VAT. Besides, many cities in the US tack on their own sales tax and it gets close to 10% anyway (Seattle is 9.6%, Los Angeles is 9.5%, San Francisco is 8.75%)