8 ms·

This might be a common myth. The tax levels in the nordic countries might be higher than the US but not by that much. We also have free health care and educati

by Expez 14y ago

This might be a common myth. The tax levels in the nordic countries might be higher than the US but not by that much. We also have free health care and education (university attendance is free) and other benefits included in our taxes. Earning $100k in Norway you'd pay around 32% tax. Edit: We have progressive taxes. To pay over 50% taxes in Norway you'd have to have a regular salary above $551k, with no deductibles. Capital gains are taxed at 27%.

jdminhbg 14y ago
There's also 25% VAT, compared to 0%-8% sales tax in the US (varying by state). I'm not sure why included university attendance is always thrown into the pitch in these conversations -- someone looking for a place to work probably isn't trying to pick up a philosophy degree on the side.
- tow21 14y ago
  Because if you're not a single 20-something, you might be thinking about saving for your children's education. Being sited in a country with free university education means that when you're paying your staff, you don't have to assume that they need to be putting away several thousand a year for a college fund.
  - rb12345 14y ago
    It would also mean that people who are 20-something and educated locally are less likely to have large student loans to repay too. They would pay more tax compared to the US, but need to spend less money after tax so it should even itself out.
    - tephra 14y ago
      This is not necisarilly true. As a student in Sweden I can explain how our system works. The university is free for swedes and europeans (might only be free for schengen countries). In Sweden we have a government agency that controlls student loans and subsidies (the agency is called CSN, Central Study Board). As a Swedish citizen you have the right to a ~2000 SEK (around 300 USD) per month subsidy. So just by attending university you get 2k SEK each month (this is limited to I think 12 terms in total, i.e 6 years), this is something you don't have you pay back. We then also have the right to a student loan which will push up your monthly "earnings" to ~8000 SEK (1200 USD). This loan you obviously have to pay back. The current plan is that every student that took a loan before 2001 have 25 years to repay it. Students that live at home during the duration of their study time can get away with only taking the subsidy. But most student (at least those that I know, including me) have to take the student loan.
      - _delirium 14y ago
        Interesting, that's something that's different in Denmark. The Statens Uddannelsesstøtte (SU) is 5500 DKK (around 1000 USD) per month. You can additionally take loans, but most students don't; they just live within the SU amount, often by living in one of the fairly cheap university dorms. It's getting more common for students to supplement their SU with freelancing or a 1-day-a-week job, though, especially masters students in areas like tech or design.
- deleted 14y ago
  [deleted]
- jonmartin 14y ago
  Regarding Helsinki, ignoring deductions an income of $100,000 (€73,000) would be taxed at 36% with everything included (pension contributions and so forth). You can check yourself at http://prosentti.vero.fi/VPL2013/Sivut/Aloitus.aspx?kieli=en-US http://prosentti.vero.fi/VPL2013/Sivut/Aloitus.aspx?kieli=en... Healthcare is basically free (trivial costs for a visit) and that's for everyone with a work permit, no exceptions. VAT is 24% and food is expensive. Salaries are lower than other big cities but not much and it depends a lot on the exchange rate if making a comparison. When the dollar was getting you €0.63 our salaries looked fine; at €0.73 they look a bit light.
- Mvandenbergh 14y ago
  Agreed, but if you're spending 5-10% of your income every month on repaying student loans that has the same effect as a tax. I think the cost of healthcare is a much better example though.
BHershewitz 14y ago
Not so in Helsinki. In Helsinki, $100k would be in the 40% tax bracket. But the problem in Helsinki is the tax bureaucracy; you have to estimate your income for the year, and the tax office gives you a tax rate. Anything above that level gets taxed at an exorbitant amount (>50% for the 100k$ salary). Plus, yes, there's free healthcare in Finland, but it's only really available for you if you're poor (if you're not a citizen). If you make money, you're expected to use your private insurance, which will be covered by the company. Salaries in Helsinki are about 60% of what they are in SF, but costs are about 80-90%.
- antris 14y ago
  > you have to estimate your income for the year, and the tax office gives you a tax rate. Anything above that level gets taxed at an exorbitant amount (>50% for the 100k$ salary) The higher tax rate is a safety mechanism in case you would fall into a tax bracket with a higher percentage. This does not mean you are necessarily taxed at a higher rate; you are just saving in case you earn so much that your tax bracket will change. If you don't fall into a higher tax bracket, you will get the money back when the tax office checks the numbers afterwards. This system is in place so that you wouldn't get surprised by huge tax deficit when you fall into a new bracket at the end of the year.
  - _delirium 14y ago
    Yes, I had the same thing due to failing to file any kind of form when I first moved to Denmark— they withheld at the top tax rate by default, but then gave me the money back at the end of the year. I didn't have to go through any sort of process to request a refund; it was just automatically deposited in my bank account. They even tacked on 0.5% interest onto the over-withheld amount.
- aapl 14y ago
  In Finland, your income tax rate only depends on your total yearly income. If you estimate your income too low and too much money gets withheld, it will be returned to you the next year. You can also adjust your estimate at any point during the year.
Sharlin 14y ago
However, the employer also pays taxes from an employee's salary, bringing the actual tax rate closer to 50% - if not for those taxes, they could play the employee more in the first place.

by Expez 14y ago

jdminhbg 14y ago

There's also 25% VAT, compared to 0%-8% sales tax in the US (varying by state). I'm not sure why included university attendance is always thrown into the pitch in these conversations -- someone looking for a place to work probably isn't trying to pick up a philosophy degree on the side.

tow21 14y ago
Because if you're not a single 20-something, you might be thinking about saving for your children's education. Being sited in a country with free university education means that when you're paying your staff, you don't have to assume that they need to be putting away several thousand a year for a college fund.
- rb12345 14y ago
  It would also mean that people who are 20-something and educated locally are less likely to have large student loans to repay too. They would pay more tax compared to the US, but need to spend less money after tax so it should even itself out.
  - tephra 14y ago
    This is not necisarilly true. As a student in Sweden I can explain how our system works. The university is free for swedes and europeans (might only be free for schengen countries). In Sweden we have a government agency that controlls student loans and subsidies (the agency is called CSN, Central Study Board). As a Swedish citizen you have the right to a ~2000 SEK (around 300 USD) per month subsidy. So just by attending university you get 2k SEK each month (this is limited to I think 12 terms in total, i.e 6 years), this is something you don't have you pay back. We then also have the right to a student loan which will push up your monthly "earnings" to ~8000 SEK (1200 USD). This loan you obviously have to pay back. The current plan is that every student that took a loan before 2001 have 25 years to repay it. Students that live at home during the duration of their study time can get away with only taking the subsidy. But most student (at least those that I know, including me) have to take the student loan.
    - _delirium 14y ago
      Interesting, that's something that's different in Denmark. The Statens Uddannelsesstøtte (SU) is 5500 DKK (around 1000 USD) per month. You can additionally take loans, but most students don't; they just live within the SU amount, often by living in one of the fairly cheap university dorms. It's getting more common for students to supplement their SU with freelancing or a 1-day-a-week job, though, especially masters students in areas like tech or design.
deleted 14y ago
[deleted]
jonmartin 14y ago
Regarding Helsinki, ignoring deductions an income of $100,000 (€73,000) would be taxed at 36% with everything included (pension contributions and so forth). You can check yourself at http://prosentti.vero.fi/VPL2013/Sivut/Aloitus.aspx?kieli=en-US http://prosentti.vero.fi/VPL2013/Sivut/Aloitus.aspx?kieli=en... Healthcare is basically free (trivial costs for a visit) and that's for everyone with a work permit, no exceptions. VAT is 24% and food is expensive. Salaries are lower than other big cities but not much and it depends a lot on the exchange rate if making a comparison. When the dollar was getting you €0.63 our salaries looked fine; at €0.73 they look a bit light.
Mvandenbergh 14y ago
Agreed, but if you're spending 5-10% of your income every month on repaying student loans that has the same effect as a tax. I think the cost of healthcare is a much better example though.

BHershewitz 14y ago

Not so in Helsinki. In Helsinki, $100k would be in the 40% tax bracket. But the problem in Helsinki is the tax bureaucracy; you have to estimate your income for the year, and the tax office gives you a tax rate. Anything above that level gets taxed at an exorbitant amount (>50% for the 100k$ salary). Plus, yes, there's free healthcare in Finland, but it's only really available for you if you're poor (if you're not a citizen). If you make money, you're expected to use your private insurance, which will be covered by the company. Salaries in Helsinki are about 60% of what they are in SF, but costs are about 80-90%.

antris 14y ago
> you have to estimate your income for the year, and the tax office gives you a tax rate. Anything above that level gets taxed at an exorbitant amount (>50% for the 100k$ salary) The higher tax rate is a safety mechanism in case you would fall into a tax bracket with a higher percentage. This does not mean you are necessarily taxed at a higher rate; you are just saving in case you earn so much that your tax bracket will change. If you don't fall into a higher tax bracket, you will get the money back when the tax office checks the numbers afterwards. This system is in place so that you wouldn't get surprised by huge tax deficit when you fall into a new bracket at the end of the year.
- _delirium 14y ago
  Yes, I had the same thing due to failing to file any kind of form when I first moved to Denmark— they withheld at the top tax rate by default, but then gave me the money back at the end of the year. I didn't have to go through any sort of process to request a refund; it was just automatically deposited in my bank account. They even tacked on 0.5% interest onto the over-withheld amount.
aapl 14y ago
In Finland, your income tax rate only depends on your total yearly income. If you estimate your income too low and too much money gets withheld, it will be returned to you the next year. You can also adjust your estimate at any point during the year.

Sharlin 14y ago

However, the employer also pays taxes from an employee's salary, bringing the actual tax rate closer to 50% - if not for those taxes, they could play the employee more in the first place.