The tax man gets his one way or another. Imagine the shock of an American living without sales tax when they go to Germany and everything has a 20% government markup...
In Germany, the net average tax rate on a worker is 37.4%, in America it is 24.8%. That's a dramatic difference in taxation!
Anyone living in California or NYC and making mid six figures and up is easily paying more than German tax rates then. You’re paying almost 50% around high six figure range.
I’ve never quite understood why people think the US is a low tax country.
>You’re paying almost 50% around high six figure range.
That's a gross oversimplification and thus very misleading. While your marginal tax rate on taxable income (not gross income) might be close to 50%, if you are married filing joint, a homeowner, and have children, you are not paying anywhere near 50% effective tax rate[0] on your total income, due to deductions and exemptions, credits, tax-deferred retirement contributions, tax-free health insurance, and progressive tax brackets.
[0] "effective tax rate" does not have a universally agreed single definition, but the statement holds for most reasonable definitions.
Depends on your definition of "mid six figures" and your source, but it at least doesn't appear very misleading. At $450k it looks like the federal effective tax burden is 35% and the New York tax burden is at least ~16% (the data are not broken out by income).
Not really. 20-30% effective on income including CA's 9.4% at ~40k, plus 10-20k in property taxes, 10%+ in sales taxes, excise taxes on everything from gasoline to alcohol, and various "fees" that are really taxes including auto registration, building permit fees, DMV charges, ride share fees, motor oil and battery disposal charges. Also, some cities (e.g. NYC) have a personal income tax.
Obviously you're right that marginal != effective, but Americans really do pay a LOT in taxes, when you add it up, for a relatively middling level of services (e.g. no public healthcare, no subsidized daycares, marginal-quality public schools)
The US is a very low tax country for the bottom 50% of income earners compared to many countries.
From a quick Google: The US federal income tax rate for low earners is something like 12%. In the UK it's 20%. In Sweden it looks like the municipal tax is 32%. The few other countries I looked up had complicated tax systems that made it hard to compare, not that the above examples (and the US) aren't missing their deductions.
Oh, my bad, you actually included all of California in your quote. I corrected it to SF because most people understand that California is absolutely massive.
The median household income in California is $80k and of the 40 million in California, very few work in tech.
California actually has extremely progressive tax laws and extremely low property taxes, so while you're right that the actually wealthy folks do pay a European-level of taxation, the working class actually pays a dramatically tax rate than their counterparts in Europe.
Anyone with any knowledge of California knows all of this, so when you made such odd points that seemed to challenge it, I tried to help you by assuming you meant SF.
Point is: the vast majority of Americans pay vastly less taxes than Europeans and no weird focuses on outliers is going to change reality.
Funny side note: I still am the only person who posted OECD apples to apples data, which you have rejected un-critically with no sourcing and nothing but hand waves about your feelings. Hmmm.
There’s 50M-60M people between California and NYC.
At this point making “mid six figures” hardly makes you rich. You don’t have to be the top 1% to see a tax rate higher than the one you stated.
Point is arguing that Americans are low taxed when the highest paying jobs are concentrated in high tax states and cost of living is much higher ignores reality for many Americans who pay as much or more than Europeans.
I was surprised when I went to the US and had to pay taxes on everything I bought. On a logical level, I know I pay sales tax in Europe too, but it’s all integrated into the price tag of items so on a more psychological level it doesn’t really feel like the tax is there. Compare that to the US where you pick up a few items in a store, mentally add up an approximate price you have to pay and the cashier asks for significantly more. I’ve also noticed some products sold internationally will have very similar prices in the US and EU, probably because the company wants to hit some certain price for marketing reasons, but the EU price has the taxes included in it.
To be fair, we (US) outsource much of our taxation to the private sector, so that basics like healthcare fees/taxes are routed through private companies. If it comes out of your check before you get it, and it's not going into your 401(k), it might as well be a tax.
In Germany, the net average tax rate on a worker is 37.4%, in America it is 24.8%. That's a dramatic difference in taxation!