4 ms·

It's not necessary about amount, but about distribution. Let's say a medical tax in Germany is 14.6% (correct me if I'm wrong), my medical insurance here in the

It's not necessary about amount, but about distribution. Let's say a medical tax in Germany is 14.6% (correct me if I'm wrong), my medical insurance here in the US for a family of 2 is around 14% (yes, it's paid by my employer, but there is no free lunch and I consider it _my_ tax). The only problem here is that payment is fixed, so if I had 50% of what I have now (and that would be a median salary in my state) it would be 28%. Also if I lose my job I will have to pay it in full myself, from after-tax money. Unlike Germany. Oops. So I'm already paying on par with Germany (when I'm employed), and I would pay twice, of even triple of that if I was an average worker.

pclmulqdq 4y ago
The tax rate in Germany is 42% on income over 62000 euros. That covers everything, but doesn't include any local or municipal taxes. The VAT is 19% on top of that. In other words, a 42% federal income tax plus (roughly) a 20% federal sales tax.
- vc8f6vVV 4y ago
  You are conveniently leaving out payroll taxes which constitute another ~35%. So 42% becomes ~77%. 19% doesn't technically apply to the payroll, but it does apply when you buy something.
  - vc8f6vVV 4y ago
    Here's some comparison, but it is misleading when it comes to the US. Technically medical insurance (de facto mandatory) can be from ~15% to >25%, depending on the income. It's not reflected on the picture, so in reality tax burden in the US might even be more than in Belgium (VAT aside). https://upload.wikimedia.org/wikipedia/commons/4/49/Payroll_and_income_tax_by_country.png https://upload.wikimedia.org/wikipedia/commons/4/49/Payroll_...
  - qwertfisch 4y ago
    There seems to be a misunderstanding. The maximum payroll tax is 42% for incomes above 62k Euros. The part of income below has a tax excempt amount of ~10k, then a linear progressive tax. (There is an rate of 45% for incomes over 250k, but let’s skip that for the argument.) There are also some tax reducing things, but let’s say you have a taxable gross income in the range of 60k. The deductions are as follows: - 25% payroll tax (which is the tax _average_, only the amount above 62k is taxed with 42%) - 7.3% healthcare (or 14.6% if you are self-employed) - some percentage for other public insurances Gives you around 65% net income, from which you pay 19% VAT for most things you buy as consumer. But e.g. rent doesn’t have a VAT. If your income is higher (as I wrote in my other comment), the healthcare / public insurance cost is capped, so every Euro above 62k is taxed with 42 (or 45) percent. If your income is lower you simply pay less taxes (relatively) and might have 80% or more net income. Edit: forgot about tax average …
    - vc8f6vVV 4y ago
      Yep, but you need to count employer paid taxes too to get the whole picture. Tax base will be different (+ 7.3% healthcare + 9.3% pension + 1.5% unemployment), so if your base is ~1.17 of your "official" base, the effective tax becomes (0.35 + 0.17) / 1.17 = 45% (leaving you with 55%). Which is in line with the chart I posted. Now here's how it works in the US. Let's take my $170K household income (it's 2x of state median in Massachusetts, but 1x in my town). My effective tax rate (without medical insurance and without employer part of payroll taxes) is 33%, but with employer taxes and after tax base adjustment it's going to be (0.33 + 0.08) / 1.08 = 38% (I'm ignoring social security cap here, but it won't make a big difference). But we left out a very important part, and it's medical insurance. Let's add 24K/year (14%) to the mix, then it becomes (0.33 + 0.08 + 0.14) / 1.22 = 45%. Oops! Sounds like I'm paying the same percentage as in Germany. Sure, I have 2x of median, but for 1x things are getting even more ugly, because 24K will stay the same, and while the income tax is lower, medical will take its part and more. Of course I still bring home more than an average German family, yet expenses are different too so it's hard to compare. Sure, I can buy more junk, and I have a bigger home so I still have some place to live after I placed all that junk :) But to the original comment: > The American lower and middle classes pay a lot less of their incomes - that would be the group that would have to pay for an American welfare state. That won't go over well... No, American lower and middle class doesn't pay "a lot less of their incomes", it's simply not true.
- deleted 4y ago
  [deleted]
qwertfisch 4y ago
The public healthcare rate is indeed 14.6% but half of that is paid by your employer. Of course in the end it doesn’t matter, just that only 7.3% from your gross income will be reduced (also there are rates for nursing care insurance, pension insurance, unemployment insurance – a middle-class income pays 35–50% for tax and insurance). Public healthcare is obligatory for all employees except you’re earning more than ~65000€/year or are a civil servant. In which case you are entitled for private health care which might be (or in fact is) more expensive but has more options for treatments and some prioritizing on waiting lists and doctor’s appointments. Family (husband, wife and children) is always insured for free except they are also employed. Children have to pay seperately after reaching age of 25, and if they still study they pay only a low flatrate. The rate is always 14.6% of gross income except for very low incomes, in which case the employer pays everything, or very high incomes. There is a cap: everything above 65k is not rated – which seems unfair to me.

pclmulqdq 4y ago

The tax rate in Germany is 42% on income over 62000 euros. That covers everything, but doesn't include any local or municipal taxes. The VAT is 19% on top of that. In other words, a 42% federal income tax plus (roughly) a 20% federal sales tax.

vc8f6vVV 4y ago
You are conveniently leaving out payroll taxes which constitute another ~35%. So 42% becomes ~77%. 19% doesn't technically apply to the payroll, but it does apply when you buy something.
- vc8f6vVV 4y ago
  Here's some comparison, but it is misleading when it comes to the US. Technically medical insurance (de facto mandatory) can be from ~15% to >25%, depending on the income. It's not reflected on the picture, so in reality tax burden in the US might even be more than in Belgium (VAT aside). https://upload.wikimedia.org/wikipedia/commons/4/49/Payroll_and_income_tax_by_country.png https://upload.wikimedia.org/wikipedia/commons/4/49/Payroll_...
- qwertfisch 4y ago
  There seems to be a misunderstanding. The maximum payroll tax is 42% for incomes above 62k Euros. The part of income below has a tax excempt amount of ~10k, then a linear progressive tax. (There is an rate of 45% for incomes over 250k, but let’s skip that for the argument.) There are also some tax reducing things, but let’s say you have a taxable gross income in the range of 60k. The deductions are as follows: - 25% payroll tax (which is the tax _average_, only the amount above 62k is taxed with 42%) - 7.3% healthcare (or 14.6% if you are self-employed) - some percentage for other public insurances Gives you around 65% net income, from which you pay 19% VAT for most things you buy as consumer. But e.g. rent doesn’t have a VAT. If your income is higher (as I wrote in my other comment), the healthcare / public insurance cost is capped, so every Euro above 62k is taxed with 42 (or 45) percent. If your income is lower you simply pay less taxes (relatively) and might have 80% or more net income. Edit: forgot about tax average …
  - vc8f6vVV 4y ago
    Yep, but you need to count employer paid taxes too to get the whole picture. Tax base will be different (+ 7.3% healthcare + 9.3% pension + 1.5% unemployment), so if your base is ~1.17 of your "official" base, the effective tax becomes (0.35 + 0.17) / 1.17 = 45% (leaving you with 55%). Which is in line with the chart I posted. Now here's how it works in the US. Let's take my $170K household income (it's 2x of state median in Massachusetts, but 1x in my town). My effective tax rate (without medical insurance and without employer part of payroll taxes) is 33%, but with employer taxes and after tax base adjustment it's going to be (0.33 + 0.08) / 1.08 = 38% (I'm ignoring social security cap here, but it won't make a big difference). But we left out a very important part, and it's medical insurance. Let's add 24K/year (14%) to the mix, then it becomes (0.33 + 0.08 + 0.14) / 1.22 = 45%. Oops! Sounds like I'm paying the same percentage as in Germany. Sure, I have 2x of median, but for 1x things are getting even more ugly, because 24K will stay the same, and while the income tax is lower, medical will take its part and more. Of course I still bring home more than an average German family, yet expenses are different too so it's hard to compare. Sure, I can buy more junk, and I have a bigger home so I still have some place to live after I placed all that junk :) But to the original comment: > The American lower and middle classes pay a lot less of their incomes - that would be the group that would have to pay for an American welfare state. That won't go over well... No, American lower and middle class doesn't pay "a lot less of their incomes", it's simply not true.
deleted 4y ago
[deleted]

qwertfisch 4y ago

The public healthcare rate is indeed 14.6% but half of that is paid by your employer. Of course in the end it doesn’t matter, just that only 7.3% from your gross income will be reduced (also there are rates for nursing care insurance, pension insurance, unemployment insurance – a middle-class income pays 35–50% for tax and insurance). Public healthcare is obligatory for all employees except you’re earning more than ~65000€/year or are a civil servant. In which case you are entitled for private health care which might be (or in fact is) more expensive but has more options for treatments and some prioritizing on waiting lists and doctor’s appointments. Family (husband, wife and children) is always insured for free except they are also employed. Children have to pay seperately after reaching age of 25, and if they still study they pay only a low flatrate. The rate is always 14.6% of gross income except for very low incomes, in which case the employer pays everything, or very high incomes. There is a cap: everything above 65k is not rated – which seems unfair to me.