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> 60-70% taxes The highest Dutch tax bracket is 50%, but that only applies to income over 75K EUR. Also, VAT doesn't apply to rent, and it's reduced for food.
by retrac 3y ago
> 60-70% taxes
The highest Dutch tax bracket is 50%, but that only applies to income over 75K EUR. Also, VAT doesn't apply to rent, and it's reduced for food. Housing and food are most household's largest expenses. So the 21% sales tax can be deceptive.
Taxation as a % of the Dutch GDP is 38%. That is to say, taxes take 38% of all the wealth produced in the Netherlands.
For some comparison purposes, the number in the USA is 27%, Japan 31%, Canada 33%, Germany 37%, Finland 42%.
The US does not have uniform tax rates. Taxation as a % of GDP in some of the higher-taxed US states comes in around 35% - quite close to the Dutch number.
It would appear that the typical middle class Dutch family probably pays about 30 - 50% of their income to taxation. The very wealthy might be coming up on 60% or so.
- jdmoreira 3y ago> Taxation as a % of the Dutch GDP is 38% This is not necessarily a good metric for high income right? Companies pay less taxes for sure then a high earning couple.
- throwaway49849 3y agoFor context, 75,518 EUR is $81,014. So if you're a software engineer making $200k, you're paying 37% on the first $81,014, or $30,000, and then 50% on the remaining $118,986, or $60,000. For a grand total of $90k on your $200k salary. Oof. In a modern society, with modern technology, why does the government demand ownership of 30-50% of the value that people generate? That's an enormous amount of free labor.
- bojan 3y agoIt's not a good example as almost no-one has a salary that high. For software engineers you're looking at say 90-100K as an average maximum, with vast majority earning less than that. Edit to cover your edit: it's certainly not free labour, I happily pay my taxes because I believe I'm getting quiet something in return.
- pierat 3y agoIf we're paying 'social democracy sized taxes', you damn straight I demand social democracy policies. But nope, we just get "sell more weapons to Israel and Ukraine", and more class warfare.
- throwaway49849 3y agoIt is free labor. You giving your income to the government is equivalent to doing free work. And of course, some level of that is required. I'm not anti-tax, I'm anti wasteful tax. And to my mind, requiring 30%-50% of everyones created value, just to maintain society, is enormously wasteful. There is no way in hell an efficient society actually requires that level of income tax of everyone.
- sofixa 3y ago> There is no way in hell an efficient society actually requires that level of income tax of everyone If there's no way in hell you can sure back up that claim with sources? I personally cannot think of a single country with what I would consider to be a somewhat efficient society that has a significantly lower tax rate. On the contrary, as established upthread, in the US which many Americans pride themselves on being low tax, the effective tax rate is not far off, and American society is drastically less efficient or comfortable than e.g. Dutch one.
- throwaway49849 3y agoThe burden of proof is on the people claiming that level of taxation is required in the first place. If taxes need to be that high, its on high tax proponents to justify it, not on everyone else to justify why we shouldn't raise them higher. If you stop to think about it, there are only 3 possibilities: 1) Taxes are perfectly calibrated to exactly what they need to be. 2) Taxes are less than they need to be. 3) Taxes are more than they need to be. Perfect calibration is nearly impossible. So that leaves 2 and 3. Which do you think is more likely of a corruption-prone organization that takes income through the implicit threat of physical violence?
- renewiltord 3y agoFor comparison, in California if you're making $1m W-2 income, you'll lose $470k to total taxes (Federal+State+FICA). The difference is not that huge. The difference is what you get for that 47%. Go higher and there's a 1% extra mental health services tax.
- jeffbee 3y agoIs this including federal? State income taxes are nowhere near that high in California.
- renewiltord 3y agoYes, edited to clarify.
- bojan 3y ago> The highest Dutch tax bracket is 50%, but that only applies to income over 75K EUR To make it even clearer, it only applies to the part of income that is over 75K. So if you are earning 76K, the highest tax bracket only applies to that last thousand.
- Aunche 3y agoThe US has one of the most progressive tax rates of any nation. Not only do we not have a VAT, but also the top 10% pay over 70% of all income taxes. I don't think that it's a coincidence that the American government seems especially inefficient at spending money. https://taxfoundation.org/data/all/federal/summary-latest-federal-income-tax-data-2023-update/ https://taxfoundation.org/data/all/federal/summary-latest-fe...
- theossuary 3y agoIncome taxation is not a good proxy for all taxation. If you look at the effective taxation of some of the richest individuals in America, you'll see they pay far less than income tax percentages would lead you to believe [1]. [1]: https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.propublica.org/article/the-secret-irs-files-trov...
- Aunche 3y agoSure, but that just makes it worse for high-salary earners (me and I suspect a lot of HN readers).