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> Not to mention the classic error you’ve made Actually I didn’t error. This is the total tax paid expressed as a percentage. It is not the marginal tax rate.

> Not to mention the classic error you’ve made Actually I didn’t error. This is the total tax paid expressed as a percentage. It is not the marginal tax rate. See the link I provided as evidence (add total deductions + employers NI together).

avianlyric 3y ago
> add total deductions + employers NI together Why would anyone do this? Employers NI is a business tax, why would consider that a tax paid by individuals? If you’re gonna start attributing employer taxes to individuals, then why not start including business rates and other random taxes, then you can gin up any level tax burden you want.
- yardstick 3y ago
  It’s a direct tax on your employment, and if you are self employed then you also have to pay it. Likewise if you have options/shares as part of remuneration it is often specified that the employee pays the employers NI for it. Honestly it’s just a cheeky way for the govt to hide income taxes. Why not include business rates? Because it’s not linked to the employees salary. It doesn’t change based on the employees salary.
- sokoloff 3y ago
  It’s value that you created for your employer by your work and that you didn’t receive after taxation. The fact that it was taxed above some line rather than below it doesn’t matter. (Of course that means it needs to be added to both the numerator and denominator when calculating the total tax burden, something that is often skipped.)
  - vidarh 3y ago
    By that argument you might as well add VAT paid by your employers customer as well. It's a specious argument, because these amounts are not part of what you negotiate or put in your contract, and when these rates change your employer is on the hook for them, not you. It further only tend to be included when complaining about high tax countries, and conveniently forgotten when people compare w/e.g. US taxation. Nevertheless, even with them included, only a few European countries have total tax wedges above 50% for more than small portions of the population.
    - sokoloff 3y ago
      > By that argument you might as well add VAT paid by your employers customer as well. If you make money by your labor hours directly being billed and the buyer of those hours pays VAT on that labor, then I agree. So long as there’s a direct and 100% link between your labor and the taxed amount, it’s value you created and was taxed away, without regard to who stroked the check to the tax authorities.
      - vidarh 3y ago
        Why caveat it like that? Why not include other taxes paid by the employer, all of which affect what they can afford to pay you. It's irrelevant to me, because it's not a tax on your contracted income. You can make an argument that it is tax.on the value you created, sure, but not on your income because for most employees there is no direct link between value created and income.
        sokoloff 3y ago
        You’re looking at it as tax on contracted income. Which is a consistent lens to use. I’m looking at it as a tax on direct labor. Which is also a consistent lens to use.
        vidarh 3y ago
        That's fine, but in this context the comment I first replied to above talked about tax rates on salary not on labor. However, my initial claim that only a small portion of people in Europe approaches 50% holds for total tax wedge as well.
        yardstick 3y ago
        You misread what I was saying. I’m talking about taxes that have a direct relationship to your income. If your income changes and the taxes paid change in proportion to your income change then that should be counted as taxed against your income. Doesn’t matter if you call it labor, wage, salary.

avianlyric 3y ago

> add total deductions + employers NI together Why would anyone do this? Employers NI is a business tax, why would consider that a tax paid by individuals? If you’re gonna start attributing employer taxes to individuals, then why not start including business rates and other random taxes, then you can gin up any level tax burden you want.

yardstick 3y ago
It’s a direct tax on your employment, and if you are self employed then you also have to pay it. Likewise if you have options/shares as part of remuneration it is often specified that the employee pays the employers NI for it. Honestly it’s just a cheeky way for the govt to hide income taxes. Why not include business rates? Because it’s not linked to the employees salary. It doesn’t change based on the employees salary.
sokoloff 3y ago
It’s value that you created for your employer by your work and that you didn’t receive after taxation. The fact that it was taxed above some line rather than below it doesn’t matter. (Of course that means it needs to be added to both the numerator and denominator when calculating the total tax burden, something that is often skipped.)
- vidarh 3y ago
  By that argument you might as well add VAT paid by your employers customer as well. It's a specious argument, because these amounts are not part of what you negotiate or put in your contract, and when these rates change your employer is on the hook for them, not you. It further only tend to be included when complaining about high tax countries, and conveniently forgotten when people compare w/e.g. US taxation. Nevertheless, even with them included, only a few European countries have total tax wedges above 50% for more than small portions of the population.
  - sokoloff 3y ago
    > By that argument you might as well add VAT paid by your employers customer as well. If you make money by your labor hours directly being billed and the buyer of those hours pays VAT on that labor, then I agree. So long as there’s a direct and 100% link between your labor and the taxed amount, it’s value you created and was taxed away, without regard to who stroked the check to the tax authorities.
    - vidarh 3y ago
      Why caveat it like that? Why not include other taxes paid by the employer, all of which affect what they can afford to pay you. It's irrelevant to me, because it's not a tax on your contracted income. You can make an argument that it is tax.on the value you created, sure, but not on your income because for most employees there is no direct link between value created and income.
      - sokoloff 3y ago
        You’re looking at it as tax on contracted income. Which is a consistent lens to use. I’m looking at it as a tax on direct labor. Which is also a consistent lens to use.
        vidarh 3y ago
        That's fine, but in this context the comment I first replied to above talked about tax rates on salary not on labor. However, my initial claim that only a small portion of people in Europe approaches 50% holds for total tax wedge as well.
        yardstick 3y ago
        You misread what I was saying. I’m talking about taxes that have a direct relationship to your income. If your income changes and the taxes paid change in proportion to your income change then that should be counted as taxed against your income. Doesn’t matter if you call it labor, wage, salary.