4 ms·

> California state income tax is deductible from the federal taxable income Not anymore ;_; > I don’t know who seeded this meme that Americans pay low taxes.

by GuiA 7y ago

> California state income tax is deductible from the federal taxable income Not anymore ;_; > I don’t know who seeded this meme that Americans pay low taxes. Great question! It comes up all the time in conversations with my friends/family back home (France). They all have it in their head that I must pay 10% in taxes or something, but it’s really roughly the same when you scale for income differences etc. In fact depending on how you model it, I could argue that I proportionally pay more taxes than I would in France at a similar career level.

axlee 7y ago
It is very often Americans themselves who seed the "low tax meme" in order to criticize European social democracies. Those profiles tend to be right-wing. They have drunk their own kool-aid.
- AndrewUnmuted 7y ago
  Well, if you’re referring to places like Denmark, it is true that most Americans pay nowhere near those income tax rates. I can’t see a lot of right wingers in the US suggesting we have low taxes. Conservative talking points frequently address the desire to lower tax rates in the US because they claim they’re too high as it is.
- umanwizard 7y ago
  Left-leaning Americans do the same thing. “Why don’t we just tax the rich, like they do in Europe, so that the government can provide services!” which doesn’t recognize that the problem is actually different and more complicated. “The US wastes massive amounts of resources for very poor levels of service, and nobody has any idea how to fix it” isn’t as nice of a sound byte.
  - thebooktocome 7y ago
    Not being able to recover revenue from wealthy people who can afford to bend or break the tax code is a problem. The IRS can effectively make money for the federal government simply by auditing the rich (I seem to remember that the marginal dollar spent on enforcement returned six dollars in revenue), but they don't because politics.
- leetcrew 7y ago
  there's some truth to it. in general, european countries have less progressive tax regimes than the US, both directly through income tax (the middle class in particular pays a lot less in the US) and stuff like high VAT, which is very regressive. the average tax burden is similar, but the distribution is very different. people with high income are taxed aggressively in the US, although there are lots of ways for wealthy people to avoid taxes on capital. it's hard to compare apples-to-apples though because the middle and lower classes in europe receive much better public services.
annoyingnoob 7y ago
In the US taxes are complicated. How much income you have matters, also the source(s) of that income make a difference, and finally investment losses make a difference. So if you are Donald Trump, and you've had massive losses, you can pay virtually no taxes on your investment income based on your investment losses. If you have very low income you probably pay no taxes and might be eligible for subsidies. If you are single and making very high wages from labor but not from investments then you will pay the highest tax rate. If you can flip your income from labor to investments you can really save a lot in taxes. Your effective tax rate completely depends on your situation. https://taxfoundation.org/how-much-do-people-pay-taxes https://taxfoundation.org/how-much-do-people-pay-taxes
deleted 7y ago
[deleted]
FabHK 7y ago
In some countries, top income tax rates are low (for example HK 16%, Russia 13%), and you get a decent level of public services (cheap universal healthcare, good public transport). In some countries, taxes are high, and you get good public services and a comprehensive social safety net (most of Europe). The US is exceptional in having high taxes and mediocre (at best) public services (plus a huge army and health care for the elderly - at least something).
- orthoxerox 7y ago
  The employer pays a lot of "non-taxes" on top of your gross salary in Russia: social security, healthcare and retirement funds are not funded from your 13% income tax.
- oddx 7y ago
  Just want to add to @orthoxerox comment that Russia 13% tax often isn't understanded correctly, effective tax rate for wages closer to 45% (while many it components not called taxes).
  - FabHK 7y ago
    Thanks for the correction. Then put Russia in the middle category or the last (with the USA), depending on how extensive public services are…
refurb 7y ago
It's pretty easy to see the difference in taxation by just looking at taxes versus GDP. The US floats around the mid 20% range, while Europe is mid-30% up to 50% (Sweden).[1] [1]https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_to_GDP_ratio https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...

by GuiA 7y ago

axlee 7y ago

It is very often Americans themselves who seed the "low tax meme" in order to criticize European social democracies. Those profiles tend to be right-wing. They have drunk their own kool-aid.

AndrewUnmuted 7y ago
Well, if you’re referring to places like Denmark, it is true that most Americans pay nowhere near those income tax rates. I can’t see a lot of right wingers in the US suggesting we have low taxes. Conservative talking points frequently address the desire to lower tax rates in the US because they claim they’re too high as it is.
umanwizard 7y ago
Left-leaning Americans do the same thing. “Why don’t we just tax the rich, like they do in Europe, so that the government can provide services!” which doesn’t recognize that the problem is actually different and more complicated. “The US wastes massive amounts of resources for very poor levels of service, and nobody has any idea how to fix it” isn’t as nice of a sound byte.
- thebooktocome 7y ago
  Not being able to recover revenue from wealthy people who can afford to bend or break the tax code is a problem. The IRS can effectively make money for the federal government simply by auditing the rich (I seem to remember that the marginal dollar spent on enforcement returned six dollars in revenue), but they don't because politics.
leetcrew 7y ago
there's some truth to it. in general, european countries have less progressive tax regimes than the US, both directly through income tax (the middle class in particular pays a lot less in the US) and stuff like high VAT, which is very regressive. the average tax burden is similar, but the distribution is very different. people with high income are taxed aggressively in the US, although there are lots of ways for wealthy people to avoid taxes on capital. it's hard to compare apples-to-apples though because the middle and lower classes in europe receive much better public services.

annoyingnoob 7y ago

In the US taxes are complicated. How much income you have matters, also the source(s) of that income make a difference, and finally investment losses make a difference. So if you are Donald Trump, and you've had massive losses, you can pay virtually no taxes on your investment income based on your investment losses. If you have very low income you probably pay no taxes and might be eligible for subsidies. If you are single and making very high wages from labor but not from investments then you will pay the highest tax rate. If you can flip your income from labor to investments you can really save a lot in taxes. Your effective tax rate completely depends on your situation. https://taxfoundation.org/how-much-do-people-pay-taxes https://taxfoundation.org/how-much-do-people-pay-taxes

deleted 7y ago

[deleted]

FabHK 7y ago

In some countries, top income tax rates are low (for example HK 16%, Russia 13%), and you get a decent level of public services (cheap universal healthcare, good public transport). In some countries, taxes are high, and you get good public services and a comprehensive social safety net (most of Europe). The US is exceptional in having high taxes and mediocre (at best) public services (plus a huge army and health care for the elderly - at least something).

orthoxerox 7y ago
The employer pays a lot of "non-taxes" on top of your gross salary in Russia: social security, healthcare and retirement funds are not funded from your 13% income tax.
oddx 7y ago
Just want to add to @orthoxerox comment that Russia 13% tax often isn't understanded correctly, effective tax rate for wages closer to 45% (while many it components not called taxes).
- FabHK 7y ago
  Thanks for the correction. Then put Russia in the middle category or the last (with the USA), depending on how extensive public services are…

refurb 7y ago

It's pretty easy to see the difference in taxation by just looking at taxes versus GDP. The US floats around the mid 20% range, while Europe is mid-30% up to 50% (Sweden).[1] [1]https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_to_GDP_ratio https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...