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I understood this sentence, and I think it's the most likely explanation, that the total tax pressure is 47.62%. That lower brackets are taxed lower doesn't mat
by roel_v 16y ago
I understood this sentence, and I think it's the most likely explanation, that the total tax pressure is 47.62%. That lower brackets are taxed lower doesn't matter. As one makes more, the total tax pressure will approach the tax rate of the highest bracket; in other words, if the lower brackets are a marginal amount of the total, the lower brackets don't matter very much are more.
I'm just waiting for someone to calculate his total gross income last year from that figure. Some journalist from the NYT living in the Netherlands did a long article on the Dutch tax system a while ago, expressing surprise at the total tax percentage he paid. He was quite surprised when I emailed him back with a calculation illustrating the errors in his article, and at the same time deriving his gross income (which was only just within the highest tax bracket, 52%, btw - so his complaint how he was 'paying more than half of his income in taxes! omg!' was totally wrong).
That said, I don't think this error was made in this article, and that the 47.62 is the net, effective tax burden.