3 ms·

I agree with low safety net, but an average income is taxed about as heavily as the UK or Germany.

refurb 8y ago
Source? The highest bracket kicks in a much lower salary in the UK and Germany than it does in the US. My income taxes were much lower in the US coming from Canada.
- desertrider12 8y ago
  If your gross income is $80,000, overall federal income tax is 17%. There's also the 12.4% social security tax and the 2.4% Medicare tax, so the overall rate is 32%. State income tax varies (in CA it's 6% on the $80000, in TX it's 0%). The equivalent UK income is 61200 GBP. Income tax is is 21%, and National Insurance is 8% for 29%. This doesn't include the 20% VAT on most goods and services, but that also doesn't apply to all your income (doesn't apply to savings, housing, utilities). Sources: https://www.irs.com/articles/2018-federal-tax-rates-personal-exemptions-and-standard-deductions https://www.irs.com/articles/2018-federal-tax-rates-personal... https://www.fidelity.com/viewpoints/personal-finance/new-medicare-taxes https://www.fidelity.com/viewpoints/personal-finance/new-med... https://www.gov.uk/vat-rates https://www.gov.uk/vat-rates https://www.gov.uk/national-insurance/how-much-you-pay https://www.gov.uk/national-insurance/how-much-you-pay https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates
  - guitarbill 8y ago
    If you calculated the equivalent income by converting dollars to pounds, that isn't a good measure of equivalence. £61k is a huge salary, especially outside London. It's even high for a programmer 5 years in. Whereas there are plenty of roles that pay $80k, and it would be insulting for most programmers out of uni.
    - desertrider12 8y ago
      You're right, using the PPP to GDP ratio says the pound has 1.11x the purchasing power of an equivalent amount of dollars. (equivalent meaning by foreign exchange rates)
- marvin 8y ago
  Plus many European countries have _lots_ of taxes that aren't income tax, that don't apply to the US to the same degree. Not sure how this works out for the UK or Germany, but a high-income earner in Norway who uses a lot of their disposable income might pay 75% of their pre-tax salary in taxes and fees. This is in spite of an income tax that is 43% at the top marginal bracket, of which ~8 percentage points is in effect forced pension savings.

Source? The highest bracket kicks in a much lower salary in the UK and Germany than it does in the US. My income taxes were much lower in the US coming from Canada.

desertrider12 8y ago
If your gross income is $80,000, overall federal income tax is 17%. There's also the 12.4% social security tax and the 2.4% Medicare tax, so the overall rate is 32%. State income tax varies (in CA it's 6% on the $80000, in TX it's 0%). The equivalent UK income is 61200 GBP. Income tax is is 21%, and National Insurance is 8% for 29%. This doesn't include the 20% VAT on most goods and services, but that also doesn't apply to all your income (doesn't apply to savings, housing, utilities). Sources: https://www.irs.com/articles/2018-federal-tax-rates-personal-exemptions-and-standard-deductions https://www.irs.com/articles/2018-federal-tax-rates-personal... https://www.fidelity.com/viewpoints/personal-finance/new-medicare-taxes https://www.fidelity.com/viewpoints/personal-finance/new-med... https://www.gov.uk/vat-rates https://www.gov.uk/vat-rates https://www.gov.uk/national-insurance/how-much-you-pay https://www.gov.uk/national-insurance/how-much-you-pay https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates
- guitarbill 8y ago
  If you calculated the equivalent income by converting dollars to pounds, that isn't a good measure of equivalence. £61k is a huge salary, especially outside London. It's even high for a programmer 5 years in. Whereas there are plenty of roles that pay $80k, and it would be insulting for most programmers out of uni.
  - desertrider12 8y ago
    You're right, using the PPP to GDP ratio says the pound has 1.11x the purchasing power of an equivalent amount of dollars. (equivalent meaning by foreign exchange rates)
marvin 8y ago
Plus many European countries have _lots_ of taxes that aren't income tax, that don't apply to the US to the same degree. Not sure how this works out for the UK or Germany, but a high-income earner in Norway who uses a lot of their disposable income might pay 75% of their pre-tax salary in taxes and fees. This is in spite of an income tax that is 43% at the top marginal bracket, of which ~8 percentage points is in effect forced pension savings.