No, they're not. You start as a self-employed person with the basis of 30% - because employees are subsidized by their employers, you have to pay both shares. That 30% is Federal, FICA, and SS, doesn't include practically any services you can use or that will protect you as a young person.
Then there's state tax. And oh yes, if you move overseas, you have to be very careful in arranging your affairs if you no longer want to pay state tax. If you want to vote, for example, you must have residence in a state. If you have residence in a state that has state tax, you have to pay.
So we're looking at a base mix of say 35%-45%, depending on how tax-crazy your (former) state is...
And for that, what do you get? Nothing. Not healthcare. Not unemployment insurance.
In Austria, we pay about 55% - but! - that includes very good healthcare, unemployment insurance (even for self-employed), guaranteed maternity/paternity leave, guaranteed housing if necessary (in a place you'd be happy to live in, with gardens and trees), pension, free higher education including in the fields of medicine and law (student housing and stipends!), and a lot more awesome stuff.
I used to pay $600 a month for my American health insurance and still ended up paying $2k when I sprained both my ankles and required several braces, crutches, an ER visit (which took HOURS), and physical therapy. Having used the Austrian system extensively since I got here, I can say that it is better in absolutely every way, even compared to the experience a moderately rich American can buy in the US.
Of course both countries allow substantial tax deductions for the self-employed. Deductions in the US are marginally better.
Oh, and what if you want to start a company? Or especially if you're unemployed? It's easier in the US, right?
Actually, Austria will extend your unemployment benefits and suspend your social insurance payments for an additional 6-18 months if you want to start a business.
The myth of American tax superiority is untrue, except for large corporations, and people who can afford and have the balls to maintain genuine tax shelters.
Oh yeah. And if you are an Austrian citizen who leaves the country? You don't have to pay taxes. Not even to vote.
US taxes are about as low as it gets for the 1st world.
Taxes in the US are bracketed. If you are poor in the USA you pay essentially no taxes (if you do pay, you get it all back in a refund). Welfare benefits in the USA are also for the poor, whereas in western europe there are more benefits available to the middle class. On the other side, if you are rich in the USA your taxes are much lower than if you are rich somewhere else.
The taxation pain point in the USA occurs when you make about $85-$100K (the same salary range as most nerd jobs). You get taxed the same as someone who makes $170K but definitely do not feel like you have the same spending power. It's also a bracket that is not a much lower tax rate than someone who makes $370K. There aren't that many visibly obvious social services available to someone who makes $85K so the taxes can seem like a rip-off.
The poverty line in the US is ludicrously low when basic health insurance costs $300-400 a month for the not-fucking-your-life plan, birth control isn't covered, and a gallon of milk costs $5.
In Austria, a person doesn't even pay taxes until they earn over 1200 euros a month. Until the whole silly Greek affair, that was the equivalent of $21,000 USD for an individual.
And... they still get retirement, maternity leave, unemployment insurance, free childcare, and great health care.
Not to mention, despite a 20% sales tax, raw food ingredients in Austria cost less than the equivalent I paid in Maryland 2 years ago when I left.
Additionally: Healthcare in the US is a hidden tax.
Yet more, how many people do you know who receive social benefits in the US? I have known quite a few, most notably a woman who was deeply involved in an abusive church and marriage and had 10 children with her husband before realizing she was in a very bad situation. Her family and his family disowned her, and what did the government do? Denied her food stamps. A woman who hadn't worked since she was 18, had no college, and 10 children!
So yes, I think paying 50% to Austria is actually cheaper than paying 40%+ to Uncle Sam, while also having to pay $600/mo for COBRA because I was denied by private insurance, and still hoemmorhaging money when I hurt myself. US taxes? Really not that low.
Except, as I said, for the very rich, and the large corporations, and people who can afford/have the balls to maintain genuine tax shelters.
Average, sure. But the federal tax poverty line doesn't vary by state, does it?
When I was leaving MD, after I'd emptied my cabinets of everything, a friend got sick and I wanted to make him cookies. The ingredients for cookies from scratch - a pound of sugar, flour, butter, baking soda, baking powder, 6 eggs, milk, chocolate chips and 1 pack of jell-o vanilla instant pudding mix and one 20 oz bottle of Diet Coke cost me $57.81. At SAFEWAY. Not Whole Foods, Graul's or any fancy store. SAFEWAY.
I still have the receipt, pinned up as a reminder.
So what I'm getting from this is that US taxes are lower than Austrian taxes (you say it right there). Which doesn't exactly disprove my statement that US taxes are low. It doesn't matter that you claim Americans are getting a bad deal on their taxes.
I think the point was that (a) in absolute terms US taxes are not low and (b) in relative terms they can appear low, but the appearance is misleading. You can disagree with (a) by defining "low" differently, and you can disagree with (b) by valuing highly what you do get in return for your US taxes (roads, police, military, and so on).
Then there's state tax. And oh yes, if you move overseas, you have to be very careful in arranging your affairs if you no longer want to pay state tax. If you want to vote, for example, you must have residence in a state. If you have residence in a state that has state tax, you have to pay.
So we're looking at a base mix of say 35%-45%, depending on how tax-crazy your (former) state is...
And for that, what do you get? Nothing. Not healthcare. Not unemployment insurance.
In Austria, we pay about 55% - but! - that includes very good healthcare, unemployment insurance (even for self-employed), guaranteed maternity/paternity leave, guaranteed housing if necessary (in a place you'd be happy to live in, with gardens and trees), pension, free higher education including in the fields of medicine and law (student housing and stipends!), and a lot more awesome stuff.
I used to pay $600 a month for my American health insurance and still ended up paying $2k when I sprained both my ankles and required several braces, crutches, an ER visit (which took HOURS), and physical therapy. Having used the Austrian system extensively since I got here, I can say that it is better in absolutely every way, even compared to the experience a moderately rich American can buy in the US.
Of course both countries allow substantial tax deductions for the self-employed. Deductions in the US are marginally better.
Oh, and what if you want to start a company? Or especially if you're unemployed? It's easier in the US, right?
Actually, Austria will extend your unemployment benefits and suspend your social insurance payments for an additional 6-18 months if you want to start a business.
The myth of American tax superiority is untrue, except for large corporations, and people who can afford and have the balls to maintain genuine tax shelters.
Oh yeah. And if you are an Austrian citizen who leaves the country? You don't have to pay taxes. Not even to vote.