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Considering how everything is rigged in favor for the rich I don't have high hopes for this. But it would be great if they really come up with a system that mak

by rckt 1y ago

Considering how everything is rigged in favor for the rich I don't have high hopes for this. But it would be great if they really come up with a system that makes sense and offers equal tax regimes for everybody. Right now if I'm not mistaken in Spain the most taxed people (in terms of ratio) are those who earn < ~300K per year.

diggan 1y ago
> Right now if I'm not mistaken in Spain the most taxed people (in terms of ratio) are those who earn < ~300K per year. You are mistaken. Currently, the higher income you have here, the higher tax rate you have, where the highest tax rate on income sits at 47%, which you get hit by when your income is above 300K/year. People between 60K and 300K sits at 45%. And then there are regional differences, someone in Andalucía don't pay the same amount of taxes as someone who lives in Catalunya for example, where the top tax rate is 50%. Even taking into account other taxes we have, you still end up paying more in taxes the more you earn, unless you start engaging in schemes to lessen your tax burden, obviously. Although the social security is capped, so it does increase slower once you go beyond the cap, but it doesn't start regressing which your comment hinted at. Edit: important to note that the tax rates are all marginal tax rates, maybe that was a bit unclear.
- foota 1y ago
  Wow, a 45% tax starting at 60k is kinda unreal.
  - diggan 1y ago
    Why is that? Sure, not all of it goes directly to people who need it, but I generally feel fine paying that amount of taxes, because I myself got helped by others paying taxes when I was dirt-poor but still needed to go to the hospital. If/once you reach that point (+60K/year), you already live a above-average life, why not share some of that with others who aren't as good/lucky as yourself? Seems like a no-brainer to me, but I might be too European to really grasp the problem.
    - Nextgrid 1y ago
      60k/year doesn't feel above-average considering the rent in Barcelona for example. I wonder, have there been any studies/considerations for making rent tax-deductible for individuals? That would address this problem for example. There probably is a good reason for not doing it, but I wonder what it is.
      - diggan 1y ago
        > 60k/year doesn't feel above-average considering the rent in Barcelona for example. Barcelona (and Madrid) are extreme examples though, not "average" by most measures. Take a look at houses/apartments just 30 minutes outside of Barcelona (not too familiar with Madrid) and it's way easier to find affordable places, and it's easy enough to get into the city with trains and buses.
        rsanek 1y ago
        I don't know if I'd say "extreme example", >10% of the entire country lives in one of those cities.
        diggan 1y ago
        Some quick "on top of my head" math tells me ~10% of the population in Spain lives in Madrid or Barcelona, so that pretty much makes it a minority in my head. Put another way, the majority (90%) of the Spanish population lives somewhere else than in Madrid or Barcelona. Even if you count the greater metropolitan area (where I'm part of the Barcelona one myself, although I live 30 minutes away from the city), you only get up ~20% of the population living in either Madrid or Barcelona. Even then I'd say we're in minority compared to the people who don't live in either those "metropolitan" areas.
      - eithed 1y ago
        Accounting for wages being influenced by cost of living of the place you're registered in when determining tax bracket seems like a solution (but it's just my naive thinking)
  - beAbU 1y ago
    60k in Spain goes a relatively long way.
  - exe34 1y ago
    It's only 45% on money above 60k, it's not the entire paycheck.
    - deleted 1y ago
      [deleted]
  - lynx97 1y ago
    See, nobody really wants to pay taxes, neither the rich nor the poor. Which makes them equal at least in this regard. Frankly, I don't even know what my gross earnings would be, simply because the number is irrelevant and only makes a bad mood. All I consider is net income. This way, I dont have to be sour about taxes....
    - junga 1y ago
      > See, nobody really wants to pay taxes Then my name must be Nobody.
      - consp 1y ago
        And the OP is the cyclops. Guess who wins in the end. (Sorry for the Homeric reference, couldn't let it go)
  - Andrew_nenakhov 1y ago
    That's socialism for you.
    - diggan 1y ago
      Yeah, it's great :) Me, with high income, can help those with lower income and even those that cannot work, and I don't have to do anything more than filling out some papers once a year. I wouldn't want it any other way.
      - Andrew_nenakhov 1y ago
        Move to Cuba then. It's like a little part of the USSR in a time capsule. Quite a surreal place for people like me who were born in the USSR.
        Philpax 1y ago
        Why would they do that when they're doing fine in Spain?
        Andrew_nenakhov 1y ago
        Because they won't be fine for much longer under their socialist government. Look at Spanish economy: high public debt, high unemployment, low productivity growth. All this results in low competitiveness, and will inevitably lead to the necessity to get off the train of taxing everyone into prosperity.
        diggan 1y ago
        > Because they won't be fine for much longer under their socialist government How long would a state required to be socialist before you consider it to not be in a perpetual state of "this will fail tomorrow"? Since you consider Spain socialist, that means you probably consider Sweden socialist as well then, since it's more "socialist" on basically every metric I can think of? If so, Sweden been socialist close to 100 years (about 3 times longer than Spain), is Sweden also about to go down the drain then because of the welfare policies? > Look at Spanish economy: high public debt, high unemployment, low productivity growth Good example. For the last 10 years, debt is slightly worse, unemployment is dramatically better and the productivity remains unchanged. Yet, we have public health care. So seems socialism might not actually be so bad after all.
  - ta1243 1y ago
    That's about 3 times median income in Spain. In California someone on the median personal income of about $50k pays 18% income tax. In Spain (Madrid) someone on the median income of about €23k pays 19% income tax. Double the median income and it's 27% in California and 27% in Spain Four times median income and 33% California, 34% Spain
  - jonathanlydall 1y ago
    I'm surprised that you seem to be surprised. In South Africa it's not super far off from that. Ignoring smaller tax brackets, income in the bracket of USD 48,500 to 102,900 is taxed at 41% with any higher earnings taxed at 45% [0]. On top of that we have 15% VAT on essentially everything we buy. Also, any "luxury" imported item, including all electronics, also has an additional substantial import tax on top of that, e.g. an iPhone is something like 9%. It gets even worse though, if I want decent quality health care, education and security I have to pay for all of those privately. Between my wife and 2 small kids, we pay at least USD 10,200 extra each year, and that's not including occupational, speech and physio therapy my now 5-year old, but prematurely born, is needing at the moment. An "advantage" for someone like me though is that a very large portion of our population is very poorly educated and thus cannot demand much of a salary, meaning that the domestic cleaner/child minder I employ is very affordable. Just the other day someone pointed out that the middle class here might not get much for their taxes (as we're essentially subsidizing the majority who are poor such that they tend to pay nothing except VAT) but on the flip side we wouldn't have domestic workers and gardeners be as affordable. [0]: https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-for-individuals/#elementor-toc__heading-anchor-2 https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-fo...
  - HamsterDan 1y ago
    It's a monstrous disincentive to increased productivity. If you're a smart, ambitious person who wants to work hard and advance your lot in life, are you really going to stay in Spain knowing that the government is going to take half of everything incremental thing you do? This is basically inviting your best and brightest to move to the US and other low tax countries.
    - disgruntledphd2 1y ago
      > This is basically inviting your best and brightest to move to the US and other low tax countries. If you're in tech, you'll want to move to California, where you'll end up paying around 50% marginal, which is much the same as lots of Western Europe. So yeah, you'll make more money but you won't get significantly lower tax rates.
    - phil21 1y ago
      I looked into this a long time ago, it’s only gotten “worse” since then as far as I know. Assuming your money comes via income and you are not doing anything exceptional to optimize taxes, you are around that 50% or so rate on incremental income nearly anywhere you’d be able to make such incomes in the western world. Normalize for things like health insurance and it’s really not worth even considering a move for tax purposes in most cases. The US is known as low taxes, low services - but it’s really within about 5% for high earning professional workers compared to even most social democracies. It’s a decidedly high tax low services place to live. The largest difference in taxes in the US vs rest of the developed world seems to be the high tax brackets start much earlier on the income scale. It’s much better (for taxes at least) to be in the US as a median wage earner and it’s usually not remotely close. Where things decouple is how capital and other forms of investment income are treated. That gets too complicated for me to understand, but it’s clear to me that a charitable take would be tax code has not kept up with how the wealthy increasingly earn their income.
    - diggan 1y ago
      > If you're a smart, ambitious person who wants to work hard and advance your lot in life, are you really going to stay in Spain knowing that the government is going to take half of everything incremental thing you do? I'm smart (anecdotal, but still) and ambitious, and I moved to Spain, and I'm planning to stay here, yeah. Yes, I'm OK with the government taking the excess profits us "rich" people earn so others who cannot work still can survive and even get health-care, like the rest of us. > This is basically inviting your best and brightest to move to the US and other low tax countries. If that leads to all the soulless money-chasers move to the US, then that sounds like a positive to me. I prefer a society where everyone gets equal chance and a good life, regardless of income, and the ones who want to ruin that can continue to build their utopia in the US.
  - disgruntledphd2 1y ago
    Try Ireland, 48% starting at about 45k. Fun fact, Ireland has one of the most unequal distributions of income in the EU pre transfers/taxation, and one of the most equal distributions of income after taxes and transfers. So this stuff sortof works. More generally, taxation of wealth is generally a good idea, but it needs to be over as many countries as possible to avoid people just moving. You can accomplish most of the same goals by taxing property, as that's most of global wealth and it's harder to move. You also need to handle the extreme top of the distribution through some kind of taxation on stocks/investments but property tax gets you most of the way there.
  - swat535 1y ago
    > Wow, a 45% tax starting at 60k is kinda unreal. Most people don't understand how taxation works; in many places, there is progressive tax, which means you are not taxed at 45% or 50% or whatever, but only on the portions you make above certain thresholds.
  - WinstonSmith84 1y ago
    "kinda unreal" and still real - that's what's wrong with European countries in general. It's a lifestyle Europeans have chosen where you don't need to work a lot, everything is paid for you but don't expect to get rich either. This is a mentality deeply ingrained in people where there is little incentive to work. If you've ever been to Spain, you will have certainly noticed these graffitis "tourists go home" a bit everywhere, whether in Valencia, Sevilla, Barcelona or other touristic cities. That's really interesting to see, you've a lot of people there who just don't get it that a lot of the economy is based on tourism. Anyway, ambitious entrepreneurs don't start business in Spain, they emigrate to countries with low tax rate where the chances are much higher that they won't go bankrupt after a year, and it's a vicious circle. Of course, the reaction now is that there are populists in Spain and elsewhere trying to dictate to other countries what their "wealthy" people shall pay in taxes :-) Despite all the flaws of the US, let alone the ones of the current administration, keeping the economy competitive is the one thing that all US administrations have understood correctly, whether Dems or Reps or MAGA
    - diggan 1y ago
      > It's a lifestyle Europeans have chosen where you don't need to work a lot, everything is paid for you but don't expect to get rich either. That some chose, true. Europeans have a choice if to "work and still have a life" or "work a bit more, have a bit less free-time", but just like in many other places, if you put in the time and effort, you can get "rich" too, if that's so important for you. > If you've ever been to Spain, you will have certainly noticed these graffitis "tourists go home" a bit everywhere That is true, you go to the hotspots of tourism in Spain, you'll notice that people are being fed up with it. If you visit the rest of 80% of Spain, you'll notice they aren't overloaded by tourists, and the sentiment is different. Next time, try visit less popular places, it'll be more unique and fun too :) > ambitious entrepreneurs don't start business in Spain We absolutely do, the work/life balance is unmatched, and living in a state that actually cares about its people makes it better for everyone, not just "The Poor". There are no "vicious circles" of going bankrupt because of taxes, if you have friends where that commonly happens with their companies in Spain, they're doing something seriously wrong. > keeping the economy competitive is the one thing that all US administrations have understood correctly, whether Dems or Reps or MAGA I don't know if you're American, keeping up with American politics or what's going on, but "economy competitiveness" is clearly off the table with the current administration, I think if anything is clear that's the thing. They're just starting to see the effects of their choices, but maybe it'll also be clear to you in a bit.

by rckt 1y ago

diggan 1y ago

> Right now if I'm not mistaken in Spain the most taxed people (in terms of ratio) are those who earn < ~300K per year. You are mistaken. Currently, the higher income you have here, the higher tax rate you have, where the highest tax rate on income sits at 47%, which you get hit by when your income is above 300K/year. People between 60K and 300K sits at 45%. And then there are regional differences, someone in Andalucía don't pay the same amount of taxes as someone who lives in Catalunya for example, where the top tax rate is 50%. Even taking into account other taxes we have, you still end up paying more in taxes the more you earn, unless you start engaging in schemes to lessen your tax burden, obviously. Although the social security is capped, so it does increase slower once you go beyond the cap, but it doesn't start regressing which your comment hinted at. Edit: important to note that the tax rates are all marginal tax rates, maybe that was a bit unclear.

foota 1y ago
Wow, a 45% tax starting at 60k is kinda unreal.
- diggan 1y ago
  Why is that? Sure, not all of it goes directly to people who need it, but I generally feel fine paying that amount of taxes, because I myself got helped by others paying taxes when I was dirt-poor but still needed to go to the hospital. If/once you reach that point (+60K/year), you already live a above-average life, why not share some of that with others who aren't as good/lucky as yourself? Seems like a no-brainer to me, but I might be too European to really grasp the problem.
  - Nextgrid 1y ago
    60k/year doesn't feel above-average considering the rent in Barcelona for example. I wonder, have there been any studies/considerations for making rent tax-deductible for individuals? That would address this problem for example. There probably is a good reason for not doing it, but I wonder what it is.
    - diggan 1y ago
      > 60k/year doesn't feel above-average considering the rent in Barcelona for example. Barcelona (and Madrid) are extreme examples though, not "average" by most measures. Take a look at houses/apartments just 30 minutes outside of Barcelona (not too familiar with Madrid) and it's way easier to find affordable places, and it's easy enough to get into the city with trains and buses.
      - rsanek 1y ago
        I don't know if I'd say "extreme example", >10% of the entire country lives in one of those cities.
        diggan 1y ago
        Some quick "on top of my head" math tells me ~10% of the population in Spain lives in Madrid or Barcelona, so that pretty much makes it a minority in my head. Put another way, the majority (90%) of the Spanish population lives somewhere else than in Madrid or Barcelona. Even if you count the greater metropolitan area (where I'm part of the Barcelona one myself, although I live 30 minutes away from the city), you only get up ~20% of the population living in either Madrid or Barcelona. Even then I'd say we're in minority compared to the people who don't live in either those "metropolitan" areas.
    - eithed 1y ago
      Accounting for wages being influenced by cost of living of the place you're registered in when determining tax bracket seems like a solution (but it's just my naive thinking)
- beAbU 1y ago
  60k in Spain goes a relatively long way.
- exe34 1y ago
  It's only 45% on money above 60k, it's not the entire paycheck.
  - deleted 1y ago
    [deleted]
- lynx97 1y ago
  See, nobody really wants to pay taxes, neither the rich nor the poor. Which makes them equal at least in this regard. Frankly, I don't even know what my gross earnings would be, simply because the number is irrelevant and only makes a bad mood. All I consider is net income. This way, I dont have to be sour about taxes....
  - junga 1y ago
    > See, nobody really wants to pay taxes Then my name must be Nobody.
    - consp 1y ago
      And the OP is the cyclops. Guess who wins in the end. (Sorry for the Homeric reference, couldn't let it go)
- Andrew_nenakhov 1y ago
  That's socialism for you.
  - diggan 1y ago
    Yeah, it's great :) Me, with high income, can help those with lower income and even those that cannot work, and I don't have to do anything more than filling out some papers once a year. I wouldn't want it any other way.
    - Andrew_nenakhov 1y ago
      Move to Cuba then. It's like a little part of the USSR in a time capsule. Quite a surreal place for people like me who were born in the USSR.
      - Philpax 1y ago
        Why would they do that when they're doing fine in Spain?
        Andrew_nenakhov 1y ago
        Because they won't be fine for much longer under their socialist government. Look at Spanish economy: high public debt, high unemployment, low productivity growth. All this results in low competitiveness, and will inevitably lead to the necessity to get off the train of taxing everyone into prosperity.
        diggan 1y ago
        > Because they won't be fine for much longer under their socialist government How long would a state required to be socialist before you consider it to not be in a perpetual state of "this will fail tomorrow"? Since you consider Spain socialist, that means you probably consider Sweden socialist as well then, since it's more "socialist" on basically every metric I can think of? If so, Sweden been socialist close to 100 years (about 3 times longer than Spain), is Sweden also about to go down the drain then because of the welfare policies? > Look at Spanish economy: high public debt, high unemployment, low productivity growth Good example. For the last 10 years, debt is slightly worse, unemployment is dramatically better and the productivity remains unchanged. Yet, we have public health care. So seems socialism might not actually be so bad after all.
- ta1243 1y ago
  That's about 3 times median income in Spain. In California someone on the median personal income of about $50k pays 18% income tax. In Spain (Madrid) someone on the median income of about €23k pays 19% income tax. Double the median income and it's 27% in California and 27% in Spain Four times median income and 33% California, 34% Spain
- jonathanlydall 1y ago
  I'm surprised that you seem to be surprised. In South Africa it's not super far off from that. Ignoring smaller tax brackets, income in the bracket of USD 48,500 to 102,900 is taxed at 41% with any higher earnings taxed at 45% [0]. On top of that we have 15% VAT on essentially everything we buy. Also, any "luxury" imported item, including all electronics, also has an additional substantial import tax on top of that, e.g. an iPhone is something like 9%. It gets even worse though, if I want decent quality health care, education and security I have to pay for all of those privately. Between my wife and 2 small kids, we pay at least USD 10,200 extra each year, and that's not including occupational, speech and physio therapy my now 5-year old, but prematurely born, is needing at the moment. An "advantage" for someone like me though is that a very large portion of our population is very poorly educated and thus cannot demand much of a salary, meaning that the domestic cleaner/child minder I employ is very affordable. Just the other day someone pointed out that the middle class here might not get much for their taxes (as we're essentially subsidizing the majority who are poor such that they tend to pay nothing except VAT) but on the flip side we wouldn't have domestic workers and gardeners be as affordable. [0]: https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-for-individuals/#elementor-toc__heading-anchor-2 https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-fo...
- HamsterDan 1y ago
  It's a monstrous disincentive to increased productivity. If you're a smart, ambitious person who wants to work hard and advance your lot in life, are you really going to stay in Spain knowing that the government is going to take half of everything incremental thing you do? This is basically inviting your best and brightest to move to the US and other low tax countries.
  - disgruntledphd2 1y ago
    > This is basically inviting your best and brightest to move to the US and other low tax countries. If you're in tech, you'll want to move to California, where you'll end up paying around 50% marginal, which is much the same as lots of Western Europe. So yeah, you'll make more money but you won't get significantly lower tax rates.
  - phil21 1y ago
    I looked into this a long time ago, it’s only gotten “worse” since then as far as I know. Assuming your money comes via income and you are not doing anything exceptional to optimize taxes, you are around that 50% or so rate on incremental income nearly anywhere you’d be able to make such incomes in the western world. Normalize for things like health insurance and it’s really not worth even considering a move for tax purposes in most cases. The US is known as low taxes, low services - but it’s really within about 5% for high earning professional workers compared to even most social democracies. It’s a decidedly high tax low services place to live. The largest difference in taxes in the US vs rest of the developed world seems to be the high tax brackets start much earlier on the income scale. It’s much better (for taxes at least) to be in the US as a median wage earner and it’s usually not remotely close. Where things decouple is how capital and other forms of investment income are treated. That gets too complicated for me to understand, but it’s clear to me that a charitable take would be tax code has not kept up with how the wealthy increasingly earn their income.
  - diggan 1y ago
    > If you're a smart, ambitious person who wants to work hard and advance your lot in life, are you really going to stay in Spain knowing that the government is going to take half of everything incremental thing you do? I'm smart (anecdotal, but still) and ambitious, and I moved to Spain, and I'm planning to stay here, yeah. Yes, I'm OK with the government taking the excess profits us "rich" people earn so others who cannot work still can survive and even get health-care, like the rest of us. > This is basically inviting your best and brightest to move to the US and other low tax countries. If that leads to all the soulless money-chasers move to the US, then that sounds like a positive to me. I prefer a society where everyone gets equal chance and a good life, regardless of income, and the ones who want to ruin that can continue to build their utopia in the US.
- disgruntledphd2 1y ago
  Try Ireland, 48% starting at about 45k. Fun fact, Ireland has one of the most unequal distributions of income in the EU pre transfers/taxation, and one of the most equal distributions of income after taxes and transfers. So this stuff sortof works. More generally, taxation of wealth is generally a good idea, but it needs to be over as many countries as possible to avoid people just moving. You can accomplish most of the same goals by taxing property, as that's most of global wealth and it's harder to move. You also need to handle the extreme top of the distribution through some kind of taxation on stocks/investments but property tax gets you most of the way there.
- swat535 1y ago
  > Wow, a 45% tax starting at 60k is kinda unreal. Most people don't understand how taxation works; in many places, there is progressive tax, which means you are not taxed at 45% or 50% or whatever, but only on the portions you make above certain thresholds.
- WinstonSmith84 1y ago
  "kinda unreal" and still real - that's what's wrong with European countries in general. It's a lifestyle Europeans have chosen where you don't need to work a lot, everything is paid for you but don't expect to get rich either. This is a mentality deeply ingrained in people where there is little incentive to work. If you've ever been to Spain, you will have certainly noticed these graffitis "tourists go home" a bit everywhere, whether in Valencia, Sevilla, Barcelona or other touristic cities. That's really interesting to see, you've a lot of people there who just don't get it that a lot of the economy is based on tourism. Anyway, ambitious entrepreneurs don't start business in Spain, they emigrate to countries with low tax rate where the chances are much higher that they won't go bankrupt after a year, and it's a vicious circle. Of course, the reaction now is that there are populists in Spain and elsewhere trying to dictate to other countries what their "wealthy" people shall pay in taxes :-) Despite all the flaws of the US, let alone the ones of the current administration, keeping the economy competitive is the one thing that all US administrations have understood correctly, whether Dems or Reps or MAGA
  - diggan 1y ago
    > It's a lifestyle Europeans have chosen where you don't need to work a lot, everything is paid for you but don't expect to get rich either. That some chose, true. Europeans have a choice if to "work and still have a life" or "work a bit more, have a bit less free-time", but just like in many other places, if you put in the time and effort, you can get "rich" too, if that's so important for you. > If you've ever been to Spain, you will have certainly noticed these graffitis "tourists go home" a bit everywhere That is true, you go to the hotspots of tourism in Spain, you'll notice that people are being fed up with it. If you visit the rest of 80% of Spain, you'll notice they aren't overloaded by tourists, and the sentiment is different. Next time, try visit less popular places, it'll be more unique and fun too :) > ambitious entrepreneurs don't start business in Spain We absolutely do, the work/life balance is unmatched, and living in a state that actually cares about its people makes it better for everyone, not just "The Poor". There are no "vicious circles" of going bankrupt because of taxes, if you have friends where that commonly happens with their companies in Spain, they're doing something seriously wrong. > keeping the economy competitive is the one thing that all US administrations have understood correctly, whether Dems or Reps or MAGA I don't know if you're American, keeping up with American politics or what's going on, but "economy competitiveness" is clearly off the table with the current administration, I think if anything is clear that's the thing. They're just starting to see the effects of their choices, but maybe it'll also be clear to you in a bit.