5 ms·

I think you are forgetting that in the US we also pay state and local income tax, state and local property tax, and State and local sales tax. Even if you rent

I think you are forgetting that in the US we also pay state and local income tax, state and local property tax, and State and local sales tax. Even if you rent you are paying property tax indirectly. There is also Social Security and Medicare taxes so pile on 12.6% for that as well. Once you figure in all those things the effective US tax rate is a lot higher than the federal income tax rates.

Analog24 9y ago
it's obviously higher but it's nowhere near an effective rate of 50% for a lot of US citizens
- d4rti 9y ago
  I figured it out as being pretty close between San Francisco and the UK, especially once you include healthcare costs on the US side.
  - grogenaut 9y ago
    numbers plz
    - d4rti 9y ago
      Sure, for San Francisco according to https://www.quora.com/What-is-the-income-tax-rate-on-a-100k-salary-in-San-Francisco?share=1 https://www.quora.com/What-is-the-income-tax-rate-on-a-100k-... it's 34K USD of state and federal income tax on 100K, so you pay ~34%, plus healthcare costs. In the UK, 100K USD is ~75K GBP, and according to the excellent tax calculator here https://listentotaxman.com/76467 https://listentotaxman.com/76467? you pay ~32% if you don't count Employers NI (which no-one would ordinarily in discussion, and really if I am to make that adjustment I should really ensure the grossed up amount was 76K, but it will make at most a few percentage point of difference), and if you do it's ~39%. It's quite possible I'm missing some taxation or complexity on the US side (FICA?); I'm UK resident not US resident. The UK side is correct. Other notable tax differences that come to mind include: * No worldwide income tax in the UK * Capital gains is a single rate in the UK * No property tax (we have Council Tax instead, and the average for a Band D property in England is £1,484/year)
grogenaut 9y ago
I live in Seattle, I pay no state tax. My property tax is $5k/year which is and additional 5% at 100k income, but I elected into that and we don't have property tax in the discussion, lets just assuming rental in both locations. Social security caps out iirc. There's still a 20% difference between the effective tax rates.
- pmorici 9y ago
  Washington State and local government has a sales tax of close to 10%. So say you make 100k per year, your effective tax rate is 25% add 5% property tax and ten percent sales tax that's 40%.
  - votepaunchy 9y ago
    You aren’t paying sales tax on your full salary unless taking on tremendous debt.
  - grogenaut 9y ago
    As sibling said, the 10% is just on what you buy, which hopefully isn't 100% of your salary. Also 40% is still a lot less than 50% but is also not a OOM like I said above.
rendall 9y ago
From the same source, US effective tax rate is ~40% https://tradingeconomics.com/united-states/personal-income-tax-rate https://tradingeconomics.com/united-states/personal-income-t...

Analog24 9y ago

it's obviously higher but it's nowhere near an effective rate of 50% for a lot of US citizens

d4rti 9y ago
I figured it out as being pretty close between San Francisco and the UK, especially once you include healthcare costs on the US side.
- grogenaut 9y ago
  numbers plz
  - d4rti 9y ago
    Sure, for San Francisco according to https://www.quora.com/What-is-the-income-tax-rate-on-a-100k-salary-in-San-Francisco?share=1 https://www.quora.com/What-is-the-income-tax-rate-on-a-100k-... it's 34K USD of state and federal income tax on 100K, so you pay ~34%, plus healthcare costs. In the UK, 100K USD is ~75K GBP, and according to the excellent tax calculator here https://listentotaxman.com/76467 https://listentotaxman.com/76467? you pay ~32% if you don't count Employers NI (which no-one would ordinarily in discussion, and really if I am to make that adjustment I should really ensure the grossed up amount was 76K, but it will make at most a few percentage point of difference), and if you do it's ~39%. It's quite possible I'm missing some taxation or complexity on the US side (FICA?); I'm UK resident not US resident. The UK side is correct. Other notable tax differences that come to mind include: * No worldwide income tax in the UK * Capital gains is a single rate in the UK * No property tax (we have Council Tax instead, and the average for a Band D property in England is £1,484/year)

grogenaut 9y ago

I live in Seattle, I pay no state tax. My property tax is $5k/year which is and additional 5% at 100k income, but I elected into that and we don't have property tax in the discussion, lets just assuming rental in both locations. Social security caps out iirc. There's still a 20% difference between the effective tax rates.

pmorici 9y ago
Washington State and local government has a sales tax of close to 10%. So say you make 100k per year, your effective tax rate is 25% add 5% property tax and ten percent sales tax that's 40%.
- votepaunchy 9y ago
  You aren’t paying sales tax on your full salary unless taking on tremendous debt.
- grogenaut 9y ago
  As sibling said, the 10% is just on what you buy, which hopefully isn't 100% of your salary. Also 40% is still a lot less than 50% but is also not a OOM like I said above.

rendall 9y ago

From the same source, US effective tax rate is ~40% https://tradingeconomics.com/united-states/personal-income-tax-rate https://tradingeconomics.com/united-states/personal-income-t...