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>I live in Austria. I pay 48% on everything above 60k € and 50% above 90k. While I agree that some taxes are a bit too high and opportunities of building weal

>I live in Austria. I pay 48% on everything above 60k € and 50% above 90k. While I agree that some taxes are a bit too high and opportunities of building wealth without tax evasion are inexistent in Austria, but your tax percentages don't scan for me. If I use the online calculator of the chamber of labor, on a 70k/year gross salary, you take home 45k/year NET, so you pay 25k/year in total combined taxes, meaning approx. 36% of your gross income is the tax load on 70k salary. That's not that terrible, seems in line with most developed EU countries more ore less. The only thing missing is the taxes paid by the employer which also add up and increase the tax load, but are not listed on your payslip, which IMHO is a fault with the system due to this lack of transparency. However, contrary to the title of this topic, it doesn't make "everyone's wealth go faster" it just supports the lower classes from falling into poverty and crime. [1] https://bruttonetto.arbeiterkammer.at/ https://bruttonetto.arbeiterkammer.at/

vidarh 3y ago
> but your tax percentages don't scan for me. They quoted marginal rates, not effective rates, which is usually the case when people start talking about these high numbers.
- FirmwareBurner 3y ago
  >They quoted marginal rates, not effective rates, which is usually the case when people start talking about these high numbers. I'm confused. What's the difference?
  - vidarh 3y ago
    To take a simple example: Let's say a country has only a single 20% tax band that kicks in at 20k. If you earn 40k, your marginal tax is 20%, but only 20k of your earning is above 20k, so you pay 20% * 30k = 4k in tax for an effective rate of 10% (4k of 40k). Most countries will multiple tax bands plus deductions which complicates this, and most places very few people have enough of their income taxed at their marginal rate for their effective rate to approach their marginal rate.
  - MattPalmer1086 3y ago
    Marginal rate is a rate for a band of income. Your effective rate is what you actually pay as a percentage of your total income. So if you have a marginal rate of 50% but it only kicks in when you earn over a certain amount, you will be paying less than 50% overall (your effective rate).
  - sokoloff 3y ago
    Your effective rate is the overall average, while the marginal rate is the amount you paid on the last (or next) dollar. If you made $100k, paid $25K in income taxes, and were in a 33% bracket, your effective rate was 25% and your marginal rate was 33%.
Try1275 3y ago
> your tax percentages don't scan for me What do you mean? I gave you the exact percentages. You can see them on the homepage of the Austrian finance ministry as well: https://www.bmf.gv.at/themen/steuern/arbeitnehmerinnenveranlagung/steuertarif-steuerabsetzbetraege/steuertarif-steuerabsetzbetraege.html https://www.bmf.gv.at/themen/steuern/arbeitnehmerinnenveranl...
Try1275 3y ago
Another interesting clue about this might be when the tax freedom day is each year. In Austria that's 5th of August. The interpretation is that people work until 5th of August for the state. [1] https://worldtaxpayers.org/2019/10/austria-tax-freedom-day-was-august-5th/ https://worldtaxpayers.org/2019/10/austria-tax-freedom-day-w...

vidarh 3y ago

> but your tax percentages don't scan for me. They quoted marginal rates, not effective rates, which is usually the case when people start talking about these high numbers.

FirmwareBurner 3y ago
>They quoted marginal rates, not effective rates, which is usually the case when people start talking about these high numbers. I'm confused. What's the difference?
- vidarh 3y ago
  To take a simple example: Let's say a country has only a single 20% tax band that kicks in at 20k. If you earn 40k, your marginal tax is 20%, but only 20k of your earning is above 20k, so you pay 20% * 30k = 4k in tax for an effective rate of 10% (4k of 40k). Most countries will multiple tax bands plus deductions which complicates this, and most places very few people have enough of their income taxed at their marginal rate for their effective rate to approach their marginal rate.
- MattPalmer1086 3y ago
  Marginal rate is a rate for a band of income. Your effective rate is what you actually pay as a percentage of your total income. So if you have a marginal rate of 50% but it only kicks in when you earn over a certain amount, you will be paying less than 50% overall (your effective rate).
- sokoloff 3y ago
  Your effective rate is the overall average, while the marginal rate is the amount you paid on the last (or next) dollar. If you made $100k, paid $25K in income taxes, and were in a 33% bracket, your effective rate was 25% and your marginal rate was 33%.

Try1275 3y ago

> your tax percentages don't scan for me What do you mean? I gave you the exact percentages. You can see them on the homepage of the Austrian finance ministry as well: https://www.bmf.gv.at/themen/steuern/arbeitnehmerinnenveranlagung/steuertarif-steuerabsetzbetraege/steuertarif-steuerabsetzbetraege.html https://www.bmf.gv.at/themen/steuern/arbeitnehmerinnenveranl...

Try1275 3y ago

Another interesting clue about this might be when the tax freedom day is each year. In Austria that's 5th of August. The interpretation is that people work until 5th of August for the state. [1] https://worldtaxpayers.org/2019/10/austria-tax-freedom-day-was-august-5th/ https://worldtaxpayers.org/2019/10/austria-tax-freedom-day-w...