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That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rat

That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the same price, and missing out on most of the benefits. I don't think this is a good situation, and I don't think it's sustainable. Taxes in the USA have a lot of loopholes for the ultra-wealthy and for large corporations. However, there's not much that "normal" salary earning employees can do to escape these high rates. This ends up putting a lot more pressure on workers to contribute economically, which seems misguided since the corporations could haul their weight more here.

grecy 3y ago
A decade or so ago I read an article titled something like "If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets". My tin foil hat theory as to why I can't find it is because it was removed in hopes of preventing those riots. It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.
- nullc 3y ago
  relatively few Californians pay rates that high, one has to be at >$1m/yr to max out the CA marginal rates.
- personomas 3y ago
  Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes. Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).
  - s1artibartfast 3y ago
    It is actually a lot closer than you think if you add up all the different taxes for each country.
    - refurb 3y ago
      It's actually a greater difference. VAT in the EU is 21% on average. Gasoline taxes are more than double. The easiest way to see the difference is tax revenue as a percentage of GDP. France is 46%, Germany 37%, UK 33%. The US is 27%.
      - personomas 3y ago
        Exactly, very well answered. UK might be higher now that they recently (this year) raised their corporate tax rate by 7%! And certainly this doesn't include the inflation tax either. Governments spend like crazy. No wonder we're not living sustainably! It starts from the top down! That's not corporations, it's the governments!
      - s1artibartfast 3y ago
        That is federal. Add in states and cities and US government revenue is more than 40% of GDP [1]. When you consider actual dollars, not % gdp, Americans pay MORE in actual dollars than many European countries. https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%2C_state%2C_and_local_tax_revenue_as_a_percent_of_GDP.pdf https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%... France gdp/capita is around 43,658.98 USD. 47% is $20.5k/capita. US gdp/capita is around 66,000 USD. 40% tax revenue is $26.5k/capita. The US government brings in 30% more tax revenue per resident than the French government. The differences in social benefits between France and the US are not due to lower taxes in the US. They are due to inefficient spending and systemic economic differences.
        refurb 3y ago
        I have no idea where you data comes from, but the OECD tax data (the one I quoted) includes all levels of government, property taxes and sales tax/VAT. "This indicator relates to government as a whole (all government levels) and is measured in percentage both of GDP and of total taxation." https://data.oecd.org/tax/tax-revenue.htm https://data.oecd.org/tax/tax-revenue.htm The OECD data has the US at 34% and France at 45%. And the idea that "the US pays more taxes doesn't even pass the sniff test. You only need to look at income tax rates, VAT, etc and anyone can tell that's not true at all.
- refurb 3y ago
  Americans don’t pay the same tax as most Europeans. It’s far lower.
- em500 3y ago
  But Americans do not pay the same tax as Europeans. As some others already noted, the high brackets in Europe kick in at much lower incomes (usually around 70k-80k or so). In addition, VAT (sales/consumption tax) ranges from 19%-25%.
gamblor956 3y ago
It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note that in all cases, I am excluding payroll taxes like US SSI or French CSG). (or very cheap) healthcare, cheap university education, and a strong social welfare net The Europeans paying the same marginal rates as their extremely wealthy Californian counterparts generally do not qualify for most of this benefits of the strong social welfare net, and for the most part have chosen to have the bulk of their medical treatment in the U.S., paying out-of-pocket even though they could get the same treatment locally for free or very cheaply.
- pfannkuchen 3y ago
  They do qualify if they suddenly become poor, which is the point of the safety net. > $350k… extremely wealthy In many parts of California this is someone who can buy a just okay house with a long mortgage. Have we redefined the word wealthy?
  - gamblor956 3y ago
    350k is 99th percentile in terms of income, so I'm not the one redfining "wealthy". If you can't afford a nice house with 350k/year, move a mile or two away from your upper class enclave to the middle class neighborhood and live like a king. (Per Nerdwallet, 350k/year is enough to qualify for a mortgage for a $1.35 million property with 20% down. I live in a nice part of LA and places here cost significantly less than 1.35 million.)
    - lesuorac 3y ago
      It's not. 350k is 3% for the entire USA [1]. For somewhere like California if your _household_ isn't making $1M you're not 1% [2]. Even in the poorest state (West Virginia) if you lived alone then you're not even a 1%-er. People really do think of themselves as at the top when they're not. You're very good but not the top. [1]: https://en.wikipedia.org/wiki/Income_in_the_United_States https://en.wikipedia.org/wiki/Income_in_the_United_States [2]: https://www.visualcapitalist.com/mapped-the-top-1-percent-in-each-u-s-state/ https://www.visualcapitalist.com/mapped-the-top-1-percent-in...
refurb 3y ago
European marginal tax rates that high kick in at a way lower income, resulting in a far higher tax burden on the middle class. France is 41% at 78k EUR. UK is 40% at 37k GBP, Netherlands is 50% at 73k EUR. Then add on top the VAT which is high teens. You’d need to earn over $200,000 to get to a >40% marginal rate in CA, with the standard deduction and SALT it’s probably closer to $300,000. Europe taxes the middle class at those higher rates to raise enough income for all those social programs. You couldn’t fund those sort of social programs in CA relying solely on taxes the top 5%
- olddustytrail 3y ago
  That's incorrect for the UK, though the gov page is confusingly worded. The basic rate is applied to £37,700 of income but you have to add the tax allowance of £12,570 onto that, so the 40% rate kicks in at £50,270. Edit: plus it's not exactly the UK since Scotland has different tax rates and services but I think it's confusing enough already.
  - infinityio 3y ago
    to summarise this - in practice, a person earning £50,270 under 1257L is paying 24% of their income as tax. Ever £1 they earn above this value is taxed at 40% up to £125k (although there are also some losses of benefits at £100k)
nly 3y ago
Highest marginal in the UK is technically 47%, but for certain bands and life situations it can be as high as 80% (loss of certain benefits phased in at certain income thresholds)
- infinityio 3y ago
  Can you provide an example of this for an employee of a company? I can't figure out a way of making that the case - even inside the "60%" (in relative terms) band - at £125k your actual tax burden is 36% (44% incl. employer contributions)
resuresu 3y ago
at least in europe the taxes go to something beneficial like college and healthcare for everyone. in CA it just goes to feed bums and beaurecrats.
- sib301 3y ago
  Thats what he was saying…
appplication 3y ago
> Californians at the high end are paying almost the same price, and missing out on most of the benefits. The context behind this statement is that Californians at the high end are also making over $650k/year. That said, I agree with your general point about generally insufficient healthcare and increasing taxes on corporations.

grecy 3y ago

A decade or so ago I read an article titled something like "If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets". My tin foil hat theory as to why I can't find it is because it was removed in hopes of preventing those riots. It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.

nullc 3y ago
relatively few Californians pay rates that high, one has to be at >$1m/yr to max out the CA marginal rates.
personomas 3y ago
Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes. Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).
- s1artibartfast 3y ago
  It is actually a lot closer than you think if you add up all the different taxes for each country.
  - refurb 3y ago
    It's actually a greater difference. VAT in the EU is 21% on average. Gasoline taxes are more than double. The easiest way to see the difference is tax revenue as a percentage of GDP. France is 46%, Germany 37%, UK 33%. The US is 27%.
    - personomas 3y ago
      Exactly, very well answered. UK might be higher now that they recently (this year) raised their corporate tax rate by 7%! And certainly this doesn't include the inflation tax either. Governments spend like crazy. No wonder we're not living sustainably! It starts from the top down! That's not corporations, it's the governments!
    - s1artibartfast 3y ago
      That is federal. Add in states and cities and US government revenue is more than 40% of GDP [1]. When you consider actual dollars, not % gdp, Americans pay MORE in actual dollars than many European countries. https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%2C_state%2C_and_local_tax_revenue_as_a_percent_of_GDP.pdf https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%... France gdp/capita is around 43,658.98 USD. 47% is $20.5k/capita. US gdp/capita is around 66,000 USD. 40% tax revenue is $26.5k/capita. The US government brings in 30% more tax revenue per resident than the French government. The differences in social benefits between France and the US are not due to lower taxes in the US. They are due to inefficient spending and systemic economic differences.
      - refurb 3y ago
        I have no idea where you data comes from, but the OECD tax data (the one I quoted) includes all levels of government, property taxes and sales tax/VAT. "This indicator relates to government as a whole (all government levels) and is measured in percentage both of GDP and of total taxation." https://data.oecd.org/tax/tax-revenue.htm https://data.oecd.org/tax/tax-revenue.htm The OECD data has the US at 34% and France at 45%. And the idea that "the US pays more taxes doesn't even pass the sniff test. You only need to look at income tax rates, VAT, etc and anyone can tell that's not true at all.
refurb 3y ago
Americans don’t pay the same tax as most Europeans. It’s far lower.
em500 3y ago
But Americans do not pay the same tax as Europeans. As some others already noted, the high brackets in Europe kick in at much lower incomes (usually around 70k-80k or so). In addition, VAT (sales/consumption tax) ranges from 19%-25%.

gamblor956 3y ago

It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note that in all cases, I am excluding payroll taxes like US SSI or French CSG). (or very cheap) healthcare, cheap university education, and a strong social welfare net The Europeans paying the same marginal rates as their extremely wealthy Californian counterparts generally do not qualify for most of this benefits of the strong social welfare net, and for the most part have chosen to have the bulk of their medical treatment in the U.S., paying out-of-pocket even though they could get the same treatment locally for free or very cheaply.

pfannkuchen 3y ago
They do qualify if they suddenly become poor, which is the point of the safety net. > $350k… extremely wealthy In many parts of California this is someone who can buy a just okay house with a long mortgage. Have we redefined the word wealthy?
- gamblor956 3y ago
  350k is 99th percentile in terms of income, so I'm not the one redfining "wealthy". If you can't afford a nice house with 350k/year, move a mile or two away from your upper class enclave to the middle class neighborhood and live like a king. (Per Nerdwallet, 350k/year is enough to qualify for a mortgage for a $1.35 million property with 20% down. I live in a nice part of LA and places here cost significantly less than 1.35 million.)
  - lesuorac 3y ago
    It's not. 350k is 3% for the entire USA [1]. For somewhere like California if your _household_ isn't making $1M you're not 1% [2]. Even in the poorest state (West Virginia) if you lived alone then you're not even a 1%-er. People really do think of themselves as at the top when they're not. You're very good but not the top. [1]: https://en.wikipedia.org/wiki/Income_in_the_United_States https://en.wikipedia.org/wiki/Income_in_the_United_States [2]: https://www.visualcapitalist.com/mapped-the-top-1-percent-in-each-u-s-state/ https://www.visualcapitalist.com/mapped-the-top-1-percent-in...

refurb 3y ago

European marginal tax rates that high kick in at a way lower income, resulting in a far higher tax burden on the middle class. France is 41% at 78k EUR. UK is 40% at 37k GBP, Netherlands is 50% at 73k EUR. Then add on top the VAT which is high teens. You’d need to earn over $200,000 to get to a >40% marginal rate in CA, with the standard deduction and SALT it’s probably closer to $300,000. Europe taxes the middle class at those higher rates to raise enough income for all those social programs. You couldn’t fund those sort of social programs in CA relying solely on taxes the top 5%

olddustytrail 3y ago
That's incorrect for the UK, though the gov page is confusingly worded. The basic rate is applied to £37,700 of income but you have to add the tax allowance of £12,570 onto that, so the 40% rate kicks in at £50,270. Edit: plus it's not exactly the UK since Scotland has different tax rates and services but I think it's confusing enough already.
- infinityio 3y ago
  to summarise this - in practice, a person earning £50,270 under 1257L is paying 24% of their income as tax. Ever £1 they earn above this value is taxed at 40% up to £125k (although there are also some losses of benefits at £100k)

nly 3y ago

Highest marginal in the UK is technically 47%, but for certain bands and life situations it can be as high as 80% (loss of certain benefits phased in at certain income thresholds)

infinityio 3y ago
Can you provide an example of this for an employee of a company? I can't figure out a way of making that the case - even inside the "60%" (in relative terms) band - at £125k your actual tax burden is 36% (44% incl. employer contributions)

resuresu 3y ago

at least in europe the taxes go to something beneficial like college and healthcare for everyone. in CA it just goes to feed bums and beaurecrats.

sib301 3y ago
Thats what he was saying…

appplication 3y ago

> Californians at the high end are paying almost the same price, and missing out on most of the benefits. The context behind this statement is that Californians at the high end are also making over $650k/year. That said, I agree with your general point about generally insufficient healthcare and increasing taxes on corporations.