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This is incorrect. The French like to complain about their taxes, but it's not that different from California. Employee protection regulation absolutely is pr

by zapita 9y ago

This is incorrect. The French like to complain about their taxes, but it's not that different from California. Employee protection regulation absolutely is problematic in France, because it over-protect relatively small groups at the expense of everyone else. Small and medium-sized businesses are most affected by this. The transition from 40-ish people to 200-ish people is where the system really breaks down for French startups, because you are too big to benefit from the early-stage incentives, and not large enough to have political clout and bend the rules.

nicolas_t 9y ago
No different than California? Let's see. I don't know the numbers well in Cali but I know what I paid in France. I'd be curious to see what one would pay in California for a similar situation. For a 100,000 euros income as a sole proprietorship, I paid 42% altogether. From those 42%, 7% were income tax, the remaining 35% were Charges sociales which covers healthcare, unemployment and retirement benefits. When French people complain about high taxes for hiring, they complain about the Charges sociales. When ones is employed, most of the charges sociales are paid by the employer so do not come out of the employee salary (but it's the same in the end). Honestly, it's not as big a problem in tech where wages are quite a bit lower than the US to account for the high charges sociales. But for smaller companies hiring low skilled labor or for jobs that are traditionally less paid (customer service, etc...), then it is rather high. And to add insult to injury, the organisms that are charged with collecting those charges sociales are a complete clusterfuck. For the same year, they calculated 3 different amounts and none matched what my accountant had calculated. Closing down the business and getting out of the RSI's list took 2 years and repeated letters. That said, I do agree with you regarding employee protection. Those regulations are helpful and should be there but there's a balance to be had between both extremes. It's the same with renter's protection in France which are way too biased against landlords and also create a lack of available apartment (coming back to France after living abroad for multiple years meant that I didn't qualify for the new unpaid rent insurance the government created and locked me out of a third of the apartments in the city I wanted to live.
- pkaye 9y ago
  In California it probably adds up to 35% for an average person making $100k. Lots of variables like if you are married, have kids, own a house, etc. And health care benefits depends of the employer through the ACA is helping for the time being.
- bm1362 9y ago
  I’m in SF and get paid 13,750 USD a month and take home $8328 after taxes (no 401k deferral) which is roughly 39.5%.
- Buge 9y ago
  100k euros would be ~$124k. At that salary if you are single your marginal tax rate would be 28% federal + 6.2% employee social security + 6.2% employer social security + 1.45% employee medicare + 1.45% employer medicare + 9.3% California income + 0.9% California disability insurance = 53.5%. This doesn't include unemployment taxes (California or federal) which might be another 0.3-0.5%. Though for real math, the employer paid taxes should increase the denominator when calculating rate. This number includes employer-paid taxes, but you were doing the same. Of course effective tax rate is much lower than marginal tax rate. Effective federal income tax would be 17.1%, effective California income tax would be 6.9%. This would make effective total tax 40.2% (it was 42.6% in 2017, before Trump's tax cuts).
  - kgwgk 9y ago
    Note that you’re basing your calculations on a EUR 100k salary. His 100k are the sum of salary and employer-paid charges. It’s true that California taxes are high. But it’s also true that France taxes are higher. And, to be fair, bring with them higher entitlements.
    - zapita 9y ago
      They're higher in France but not meaningfully higher, hence my comment "not that different". In fact if you take into account the cost of typical private employer-paid healthcare, the cost might actually be higher in California. And I maintain that taxes are just not high enough to be a major obstacle to entrepreneurship in France - and yes I am aware of the dreaded "charges sociales". The reason we hear so much about them is because complaining about high taxes is easy and not controversial. Unlike the topic of employee protection, which is deeply polarizing.

by zapita 9y ago

nicolas_t 9y ago

No different than California? Let's see. I don't know the numbers well in Cali but I know what I paid in France. I'd be curious to see what one would pay in California for a similar situation. For a 100,000 euros income as a sole proprietorship, I paid 42% altogether. From those 42%, 7% were income tax, the remaining 35% were Charges sociales which covers healthcare, unemployment and retirement benefits. When French people complain about high taxes for hiring, they complain about the Charges sociales. When ones is employed, most of the charges sociales are paid by the employer so do not come out of the employee salary (but it's the same in the end). Honestly, it's not as big a problem in tech where wages are quite a bit lower than the US to account for the high charges sociales. But for smaller companies hiring low skilled labor or for jobs that are traditionally less paid (customer service, etc...), then it is rather high. And to add insult to injury, the organisms that are charged with collecting those charges sociales are a complete clusterfuck. For the same year, they calculated 3 different amounts and none matched what my accountant had calculated. Closing down the business and getting out of the RSI's list took 2 years and repeated letters. That said, I do agree with you regarding employee protection. Those regulations are helpful and should be there but there's a balance to be had between both extremes. It's the same with renter's protection in France which are way too biased against landlords and also create a lack of available apartment (coming back to France after living abroad for multiple years meant that I didn't qualify for the new unpaid rent insurance the government created and locked me out of a third of the apartments in the city I wanted to live.

pkaye 9y ago
In California it probably adds up to 35% for an average person making $100k. Lots of variables like if you are married, have kids, own a house, etc. And health care benefits depends of the employer through the ACA is helping for the time being.
bm1362 9y ago
I’m in SF and get paid 13,750 USD a month and take home $8328 after taxes (no 401k deferral) which is roughly 39.5%.
Buge 9y ago
100k euros would be ~$124k. At that salary if you are single your marginal tax rate would be 28% federal + 6.2% employee social security + 6.2% employer social security + 1.45% employee medicare + 1.45% employer medicare + 9.3% California income + 0.9% California disability insurance = 53.5%. This doesn't include unemployment taxes (California or federal) which might be another 0.3-0.5%. Though for real math, the employer paid taxes should increase the denominator when calculating rate. This number includes employer-paid taxes, but you were doing the same. Of course effective tax rate is much lower than marginal tax rate. Effective federal income tax would be 17.1%, effective California income tax would be 6.9%. This would make effective total tax 40.2% (it was 42.6% in 2017, before Trump's tax cuts).
- kgwgk 9y ago
  Note that you’re basing your calculations on a EUR 100k salary. His 100k are the sum of salary and employer-paid charges. It’s true that California taxes are high. But it’s also true that France taxes are higher. And, to be fair, bring with them higher entitlements.
  - zapita 9y ago
    They're higher in France but not meaningfully higher, hence my comment "not that different". In fact if you take into account the cost of typical private employer-paid healthcare, the cost might actually be higher in California. And I maintain that taxes are just not high enough to be a major obstacle to entrepreneurship in France - and yes I am aware of the dreaded "charges sociales". The reason we hear so much about them is because complaining about high taxes is easy and not controversial. Unlike the topic of employee protection, which is deeply polarizing.