6 ms·

want to add the additional annual leave you get in Germany and average cost of the same health care in Dallas into that equation let alone the other benefits?

cjalmeida 9y ago
Sure, please. I'd love to see what are those extra benefits worth $40k yearly. (free healthcare doesn't count as the US amount usually includes insurance)
- geezerjay 9y ago
  > I'd love to see what are those extra benefits worth $40k yearly. How about 35hour work weeks and the fact that overtime is paid? If you factor that into account and add to the healthcare and extra vacation days I'm pretty sure those fictional $40k/yearly fade out rather quickly. And by the way, average income means jack shit when the income distribution is so lopsided, particularly when discussing issuez linked to poverty and the lack of basic services.
  - wolco 9y ago
    free university, public transit, health care, old age payments, pensions. But the tax rates are higher so 55k is really 32k. You are better off working part time in the US.
    - walshemj 9y ago
      your also forgetting the 13th month and the generous tax dodges you can use in Germany or in the UK the use of ISA's and generous tax breaks on pensions your 401k doesn't get relif at your highest rate does it?
marvin 9y ago
The $55k are pre-tax, and the "free" healthcare in contries with public health care are mostly paid out of those taxes. There is probably a point in there about shorter work days and legally mandated overtime pay, but it doesn't add up to 40k per year. Honestly, the more I look at this, the more it seems like there are hidden mechanisms that keep pay below market value in many European countries. E.g. wage collusion and the like. I am almost certain that this is part of the picture, although there are also other factors at play. (Smaller, less homogenous markets than the US, more restrictive laws around business ownership, fewer gargantous and profitable companies that compete for talent, etc). The High-Tech Employee Anti-Trust Litigation looks very curious to my Norwegian eyes. Cold-calling employees at competitors for recruiting is widely considered inappropriate behavior. I would not be surprised to find out that there are eerily similar unwritten agreements between large employers here.
- cjalmeida 9y ago
  Now you mentioned taxes, let's get more numbers! Yay! Income taxes in Texas for 95k amounts to about 27%. Income tax in Berlin for $60k (30y, no children, left other options on defaults) amounts to 33%. The after tax difference is about $30k then. Tuition in UT Dallas, 4y engineering bachelor degree, is $45k. Free in DE, but you pay that in less than two years with the difference in salary. Public transport? In US the TCO is estimated at $8500 yearly. In Berlin you can get an annual tickets for $1100. It's not directly comparable but you get the picture. For better perspective, NYC 30d passes sets you back at $1450 per year.
  - ctchocula 9y ago
    Just a nitpick, but I think you are using the marginal tax numbers instead of the actual tax rate, and not applying all the complicated deductions available to US people. Texas: $95k pre-tax falls into the marginal 28% bracket, but after subtracting 401k + IRA deferral ($18k + $5.5k), $95k falls to AGI of $71.5k. Then after subtracting standard deduction ($6.35k for single 30y, no children), personal exemption ($4.05k), taxable income falls to $61.1k. For this, the tax calculation is: 0-9325: 10%x9325 = 932.5 9325-37950: 15%x28624 = 4293.6 37950-61100: 25%x23150 = 5787.5 Total tax: 11013.6 Post-tax income: 84k Income Tax rate: 11.6% since no income tax in Texas. Social security+Medicare: 7.65% Post-tax and post-SS: $76.7k Berlin: Pre-tax: $60k USD x 1 Euro/$1.19 USD = 50240 Euro I entered this number into a German tax estimator [1], which gave me the following output for the tax bracket calculations: Total tax: 9.908,56 Euro Post-tax income: 40331 Euro Income Tax rate: 19.7% Obligatory Pension: 9.35% UI+Health Insurance+Disability: 8.4%+1.5%+1.425% = 11.325% Post-tax and everything: $35.8k USD The difference becomes $40.9k. If you amortize the 4y engineering bachelor degree over 4 years, I think the difference in income is quite significant. [1] http://www.parmentier.de/steuer/steuer.htm?wagetax.htm http://www.parmentier.de/steuer/steuer.htm?wagetax.htm
    - marvin 9y ago
      Hm, this is interesting to me -- if your example is representative, US income tax rates are often quoted at the marginal rate, whereas European taxes (higher on a percentage basis) are quoted at the net rate, skewing the perception in the direction of European taxes sounding lower than they really are. Of course, there's both deductions and non-income taxes also, which complicate the issue. In Norway, the total tax pressure is significantly greater than 50% for most people. (VAT at 25% always deducted from already-taxed income, long-term capital gains at 30%, pre-salary employer tax at 14%, company profits taxed at 24%, salary taxed at ~33% on average, fuel tax ~30%, wealth tax 0.85% of net assets after deductions +++).

cjalmeida 9y ago

Sure, please. I'd love to see what are those extra benefits worth $40k yearly. (free healthcare doesn't count as the US amount usually includes insurance)

geezerjay 9y ago
> I'd love to see what are those extra benefits worth $40k yearly. How about 35hour work weeks and the fact that overtime is paid? If you factor that into account and add to the healthcare and extra vacation days I'm pretty sure those fictional $40k/yearly fade out rather quickly. And by the way, average income means jack shit when the income distribution is so lopsided, particularly when discussing issuez linked to poverty and the lack of basic services.
- wolco 9y ago
  free university, public transit, health care, old age payments, pensions. But the tax rates are higher so 55k is really 32k. You are better off working part time in the US.
  - walshemj 9y ago
    your also forgetting the 13th month and the generous tax dodges you can use in Germany or in the UK the use of ISA's and generous tax breaks on pensions your 401k doesn't get relif at your highest rate does it?

marvin 9y ago

The $55k are pre-tax, and the "free" healthcare in contries with public health care are mostly paid out of those taxes. There is probably a point in there about shorter work days and legally mandated overtime pay, but it doesn't add up to 40k per year. Honestly, the more I look at this, the more it seems like there are hidden mechanisms that keep pay below market value in many European countries. E.g. wage collusion and the like. I am almost certain that this is part of the picture, although there are also other factors at play. (Smaller, less homogenous markets than the US, more restrictive laws around business ownership, fewer gargantous and profitable companies that compete for talent, etc). The High-Tech Employee Anti-Trust Litigation looks very curious to my Norwegian eyes. Cold-calling employees at competitors for recruiting is widely considered inappropriate behavior. I would not be surprised to find out that there are eerily similar unwritten agreements between large employers here.

cjalmeida 9y ago
Now you mentioned taxes, let's get more numbers! Yay! Income taxes in Texas for 95k amounts to about 27%. Income tax in Berlin for $60k (30y, no children, left other options on defaults) amounts to 33%. The after tax difference is about $30k then. Tuition in UT Dallas, 4y engineering bachelor degree, is $45k. Free in DE, but you pay that in less than two years with the difference in salary. Public transport? In US the TCO is estimated at $8500 yearly. In Berlin you can get an annual tickets for $1100. It's not directly comparable but you get the picture. For better perspective, NYC 30d passes sets you back at $1450 per year.
- ctchocula 9y ago
  Just a nitpick, but I think you are using the marginal tax numbers instead of the actual tax rate, and not applying all the complicated deductions available to US people. Texas: $95k pre-tax falls into the marginal 28% bracket, but after subtracting 401k + IRA deferral ($18k + $5.5k), $95k falls to AGI of $71.5k. Then after subtracting standard deduction ($6.35k for single 30y, no children), personal exemption ($4.05k), taxable income falls to $61.1k. For this, the tax calculation is: 0-9325: 10%x9325 = 932.5 9325-37950: 15%x28624 = 4293.6 37950-61100: 25%x23150 = 5787.5 Total tax: 11013.6 Post-tax income: 84k Income Tax rate: 11.6% since no income tax in Texas. Social security+Medicare: 7.65% Post-tax and post-SS: $76.7k Berlin: Pre-tax: $60k USD x 1 Euro/$1.19 USD = 50240 Euro I entered this number into a German tax estimator [1], which gave me the following output for the tax bracket calculations: Total tax: 9.908,56 Euro Post-tax income: 40331 Euro Income Tax rate: 19.7% Obligatory Pension: 9.35% UI+Health Insurance+Disability: 8.4%+1.5%+1.425% = 11.325% Post-tax and everything: $35.8k USD The difference becomes $40.9k. If you amortize the 4y engineering bachelor degree over 4 years, I think the difference in income is quite significant. [1] http://www.parmentier.de/steuer/steuer.htm?wagetax.htm http://www.parmentier.de/steuer/steuer.htm?wagetax.htm
  - marvin 9y ago
    Hm, this is interesting to me -- if your example is representative, US income tax rates are often quoted at the marginal rate, whereas European taxes (higher on a percentage basis) are quoted at the net rate, skewing the perception in the direction of European taxes sounding lower than they really are. Of course, there's both deductions and non-income taxes also, which complicate the issue. In Norway, the total tax pressure is significantly greater than 50% for most people. (VAT at 25% always deducted from already-taxed income, long-term capital gains at 30%, pre-salary employer tax at 14%, company profits taxed at 24%, salary taxed at ~33% on average, fuel tax ~30%, wealth tax 0.85% of net assets after deductions +++).