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I've looked into this and it seems the biggest difference is where the brackets are. They're much higher in the US, even if the marginal tax rate for high earne

I've looked into this and it seems the biggest difference is where the brackets are. They're much higher in the US, even if the marginal tax rate for high earners in California is not much lower than Germany.

sethammons 5y ago
curious, did you then add medical insurance in? My understanding is that at the highest marginal rates, the two countries are similar, but then you consider that those in the US are also paying additional health insurance premiums.
- jandrewrogers 5y ago
  The people in the US making enough money to pay top marginal rates are not paying for health insurance in any meaningful way. It is paid for by the company as a benefit and very high quality. Even if that wasn’t the case, if you are paying those kinds of tax rates then the cost of the very best insurance is essentially inconsequential relative to your income. An experienced software engineer might take home, after taxes, $15-20k/month in my US tech city. High-quality health insurance for an entire family is on the order of $1-2k/month, assuming you had to pay for it yourself. If you are a FAANG-level engineer, not only are you not paying for that but you are being paid twice as much. The cost of health insurance in the US is a real concern for the lower half of the middle class. Software engineers live in a completely different universe of concerns.
  - sethammons 5y ago
    I'll take your numbers at face value though they seem high to me as take home pay. So $15k/mo at around 35% taxes, and let's skip marginal rate, as that will round numbers in favor of health insurance being negligible. So total pay around $240k/yr. I spend $600/mo or around $7k/yr on health insurance. 7/240 ~= 3%. So even for a very well paid software engineer, health insurance could effectively push you up 3% as your effective tax rate. Plus all the headaches that go with it.
- deleted 5y ago
  [deleted]

sethammons 5y ago

curious, did you then add medical insurance in? My understanding is that at the highest marginal rates, the two countries are similar, but then you consider that those in the US are also paying additional health insurance premiums.

jandrewrogers 5y ago
The people in the US making enough money to pay top marginal rates are not paying for health insurance in any meaningful way. It is paid for by the company as a benefit and very high quality. Even if that wasn’t the case, if you are paying those kinds of tax rates then the cost of the very best insurance is essentially inconsequential relative to your income. An experienced software engineer might take home, after taxes, $15-20k/month in my US tech city. High-quality health insurance for an entire family is on the order of $1-2k/month, assuming you had to pay for it yourself. If you are a FAANG-level engineer, not only are you not paying for that but you are being paid twice as much. The cost of health insurance in the US is a real concern for the lower half of the middle class. Software engineers live in a completely different universe of concerns.
- sethammons 5y ago
  I'll take your numbers at face value though they seem high to me as take home pay. So $15k/mo at around 35% taxes, and let's skip marginal rate, as that will round numbers in favor of health insurance being negligible. So total pay around $240k/yr. I spend $600/mo or around $7k/yr on health insurance. 7/240 ~= 3%. So even for a very well paid software engineer, health insurance could effectively push you up 3% as your effective tax rate. Plus all the headaches that go with it.
deleted 5y ago
[deleted]