Comparing Tax Rates Across Countries: The Impact on Income and Deductions

[ShawnD]

It seems like comparing countries, especially when it's against the US, always comes down to taxes. Why no health care? Taxes. Why is military big/small? Taxes. Public education? Taxes!

This thread is really simple. State where you live and how much of your paycheck, as a percent, is jacked. Include all deducations. If your income is $3000 and you only took home $2337, count the entire $663 as taxes.

I live in Edmonton, Canada and I pay 22.1% tax.

 

[JasonRox]

It seems like comparing countries, especially when it's against the US, always comes down to taxes. Why no health care? Taxes. Why is military big/small? Taxes. Public education? Taxes!

This thread is really simple. State where you live and how much of your paycheck, as a percent, is jacked. Include all deducations. If your income is $3000 and you only took home $2337, count the entire $663 as taxes.

I live in Edmonton, Canada and I pay 22.1% tax.

As a student, I guess I pay nothing and will for awhile to come.

I'm not sure how much I would pay though, but I'm guessing 22% or so.

Although I don't pay taxes now, I'd be fine with paying an extra 10% and not getting my tax return if only we had a better health care systerm. Unfortunately, the government is too corrupted to do this and others wouldn't agree because they think it should be free.

 

[Evo]

I'm in the 28% tax bracket. That's just Federal, I also have state income tax.

 

[Moonbear]

About 21% if you include the FICA and Medicare taxes as Federal taxes. Plus, there's an approximately 4% state tax. Sales tax is 6% here. Thankfully, I no longer live in a city, so don't have to pay city taxes too.

 

[Chi Meson]

With a new mortgage and three kids, I've got no federal liability at all (deduction of mortgage interest plus child tax credit actually gives me back more than was withheld). Still with Connecticut income, sales, plus local taxes (Property, sewar, fire district, car fees) I pay just over 15%.

God help those who rent.

 

[Anttech]

20% is nothing, in Belgium the top bracket is > 50%. However this includes a whole bunch of social benifts..

Anyway we are talking about income tax right? Because we all pay much much more in hidden taxes.

If you are clever, especially in Europe, there are many legal ways to pay loads less VAT and Income taxes, using the structure and financial relationships between European countries :)

 

[chroot]

When it's all said and done -- federal and state taxes -- I end up paying about 34%. I really need to buy some property.

- Warren

 

[arildno]

I live by the motto: Don't ask, don't tell.

 

[Pengwuino]

I refuse to pay taxes.

And I am a student. My income is such that i can live by that motto for a few more years

 

[Moonbear]

When it's all said and done -- federal and state taxes -- I end up paying about 34%. I really need to buy some property.

- Warren

Yeah, I'm going to take a real hit this year for renting. But, I'd have probably just spent the difference in my rebate on hiring people to do the yardwork I don't have time for anymore, so I probably break even anyway.

 

[TuviaDaCat]

heh, capitalists... i do not know the numbers per paycheck, but my parents pay about 60%, its the highest tax, i don't know my parents paycheck, but we are not rich or something that we get such tax...
though if you don't get a high income the payment will be much lower.

its crazy i know, its a theaft...

 

[K.J.Healey]

60%?? What country are you from? The highest federal tax bracket for the US is 35% I do believe. What scales is what bracket you fall into based on income and marriage status.

Though doing research it seems that back in 1993-2000 the maximum bracket was 39.6%.

 

[turbo]

When it's all said and done -- federal and state taxes -- I end up paying about 34%. I really need to buy some property.

- Warren

You're getting off cheap. Don't move to Maine, unless you can either make lots of money or be self-sufficient. Anything in between, and you're getting shafted. I worked as a technical service/sales rep for an out-of state company for 9 months, until they were bought up by a competitor with a duplicate technical/sales structure that got rid of all of us in a mass layoff. After being out of work from September until April, I found out that the idiots in payroll (who asked how my State sales taxes should be deducted when I was hired), never actually deducted and submitted them. I never noticed it, because each paycheck came attached to a complex statement of activities in all the accounts in my territory. I owed over $6000 of state income taxes for 9 months of employment because of that oversight. Maine is one of the most heavily taxed states in the US, and the idiots in Augusta don't seem to know how to rein the spending into give us a break. You have to hold your nose while voting every year - the difference between the Dems and the Reps don't amount to a warm bucket of spit. The main difference between them is who they want to give my tax money to and who they expect their bribes from.

 

[TuviaDaCat]

60%?? What country are you from? The highest federal tax bracket for the US is 35% I do believe. What scales is what bracket you fall into based on income and marriage status.

Though doing research it seems that back in 1993-2000 the maximum bracket was 39.6%.

im just 19 years old, i was talking about my parents... i think they get like 4000 to 5000 a month, but its a wild guess. my father is an engineer has his own small company producing a product he developed. and my mom works at SAP, she has a good position in a sub company of SAP("SAP manage").

oh, and i live in israel, in america you don't get same services like here... here we have "free" medical care, pension, army, 12 years in school, money to the unimployed(for a certain time), aid to the sick and crippled, old people, and all this stuff.
though there is a lot of money going to the very wrong places.

 

[Monique]

I pay 29.7%, that includes money for my retirement fund (8%). Sales tax is 19%.

 

[ShawnD]

I pay 29.7%, that includes money for my retirement fund (8%). Sales tax is 19%.

I can't understand how a country can have 19% sales tax without the economy completely crashing. Buying a new car would actually be cheaper if you bought it in another country and drove it back.

From the looks of it, Canada's taxes aren't too bad. Most of you guys are paying way more than me, and Chi is paying less simply because he has kids and I don't.

 

[chroot]

Well, in the US, mortgage payments are tax-deductible. Buying a house is a simple way to cut your taxable income in half, and simultaneously put yourself in a lower tax bracket.

Unfortunately, I live in California, where a modest house runs half a million dollars and requires a $3,000/mo commitment... so I'm still saving up my pennies to buy, and getting the hell taxed out of me in the meantime.

- Warren

 

[arildno]

I can't understand how a country can have 19% sales tax without the economy completely crashing. Buying a new car would actually be cheaper if you bought it in another country and drove it back.

It works splendidly!
In Norway, the sales taxes are typically in the range 23-25%
(on tobacco and alcohol, about 70%)

The income tax level is typically somewhat below 30%

 

[Monique]

I can't understand how a country can have 19% sales tax without the economy completely crashing. Buying a new car would actually be cheaper if you bought it in another country and drove it back.

haha, you are kidding me right? When we buy a new car, we pay 19% sales tax, PLUS 45.2% tax over the car itself (if you don't believe it, here it says so: http://www.autobelastingen.nl/text.php?t_ID=2); that is 65,8% tax on a new car. It would be nice to just buy the car abroad, but you can't drive it here with a foreign license (only if you have business or house abroad).

We don't pay 19% on everything, I believe food-items are 6% sales tax. I don't know what the taxes on fuel and tobacco are, but they are high.

 

[ShawnD]

In Norway, the sales taxes are typically in the range 23-25%
(on tobacco and alcohol, about 70%)

Canada is a big scam like that on alcohol as well.
You can buy 85% ethanol 15% methanol from a chemical company for something like $2/L including the cost of the barrel, yet somehow a 1L bottle of 40% alcohol is $26 at the liquor store? It's all tax. That alcohol and water by itself only costs $2, the remaining $24 is tax making it about 1200% tax.

 

[Anttech]

I can't understand how a country can have 19% sales tax without the economy completely crashing. Buying a new car would actually be cheaper if you bought it in another country and drove it back.

From the looks of it, Canada's taxes aren't too bad. Most of you guys are paying way more than me, and Chi is paying less simply because he has kids and I don't.

Never heard of import tax?

 

[Moonbear]

My numbers were based purely on payroll withholding. I don't have the inclination to dig up tax records to figure out what the real percentage I pay is, but this year, without a mortgage, it's probably fairly close to the actual taxes (i.e., not likely to get much of a refund this year).

And, just in case anyone wants to be nitpicky (I guess that I'm doing just that), entire mortgage payments aren't tax deductible, but the interest paid on the mortgage is. Depending on how long you've held the mortgage and how much principle remains to be paid off, that can be a pretty high percentage of the payment anyway. I think that's generally understood in the US, but since we have non-US citizens reading along, I thought I'd clarify that in case anyone cares.

And, yes, once you have kids in the US, there are lots of other deductions one can take to get more back on their taxes. Those of us without dependents are not very representative of the average population in terms of taxes paid.

 

[Anttech]

It works splendidly!
In Norway, the sales taxes are typically in the range 23-25%
(on tobacco and alcohol, about 70%)

The income tax level is typically somewhat below 30%

Norway has the hightest taxes rates in Europe, and they are the richest. I have a good friend from Oslo, we often talk about Politics and such. I remember asking him about unemployment in Norway, and he answered, Unemployment? what's that, the only people in Norway who are unemployed are people who want to be! :)

Nice country, shame about the weather! (ohh and stop stealing our fish!) hehe

 

[arildno]

The Swedes have higher income taxes than we do.
However, they have a lot less sales tax than us, so quite a few Norwegians drive over to Sweden to buy quality meat, tobacco at half-price and so on.

 

[Monique]

Tax on fuel has ranged from 72.8% in 2004, to 64.1% in 2005. On cigarettes that is at least 57%, after which 19% sales tax still needs to be paid.

 

[ShawnD]

When we buy a new car, we pay 19% sales tax, PLUS 45.2% tax over the car itself (if you don't believe it, here it says so: http://www.autobelastingen.nl/text.php?t_ID=2); that is 65,8% tax on a new car.

Does Europe even have rich people? It seems impossible to become wealthy or even not-poor if everything is taken away like that. A $30,000 mid-size sedan becomes $50,000; on top of that your income tax is twice as high. That seems incredibly unfair.

I might be missing something though. What kind of services does your government provide? You probably get free health care, but then so do I. Do parents get free child care? Is university free? Are roads and public transportation of very high quality? Are police and fire services absolutely top notch?

 

[Moonbear]

We don't pay 19% on everything, I believe food-items are 6% sales tax. I don't know what the taxes on fuel and tobacco are, but they are high.

Wow! I knew taxes were high there, but had no idea how high. We don't pay any sales tax on food. Some states also don't have sales tax on clothing.

Alcohol, tobacco and fuel are done differently, so we don't see the actual tax rates on those because it's already calculated into the price when we buy those, not added on at the register like other sales taxes.

 

[Anttech]

The Swedes have higher income taxes than we do.
However, they have a lot less sales tax than us, so quite a few Norwegians drive over to Sweden to buy quality meat, tobacco at half-price and so on.

Really? I have another friend, ex-colleague that works in Denmark, but lives in sweden, for the exact reason that taxes in Sweden are less. I guess what he is doing tho is working a % of time in both countries (On the books) so you can reduce your taxes...

 

[ShawnD]

Never heard of import tax?

Nope, such a tax does not exist here. If I drove my car to the US and decided to hang around for a while, the US tax man won't come to my door demanding I pay them taxes on a car I already own.

 

[Moonbear]

Nope, such a tax does not exist here. If I drove my car to the US and decided to hang around for a while, the US tax man won't come to my door demanding I pay them taxes on a car I already own.

If you register the car in the US, you most certainly will pay a tax based on the value of the car at the time you register it. The states I've lived in have all closed that loophole that allowed you to buy a car out of state and drive it home and avoid paying taxes. It's a state tax, not a federal tax, but tax nonetheless.

 

[Anttech]

Nope, such a tax does not exist here. If I drove my car to the US and decided to hang around for a while, the US tax man won't come to my door demanding I pay them taxes on a car I already own.

But if you were resident in the US and drove to Canada, bought a car then drove back, you would have to 'import' it back and pay tax for the privaledge.

We can do the same as you are suggesting here. On my street here there are cars licensed in France, Netherlands, UK, Poland, and Germany. This is normal.

 

[arildno]

Really? I have another friend, ex-colleague that works in Denmark, but lives in sweden, for the exact reason that taxes in Sweden are less. I guess what he is doing tho is working a % of time in both countries (On the books) so you can reduce your taxes...

Well, Denmark is also a lot cheaper than Norway, so quite a few Norwegians take the ferry over there to buy inexpensive quality food there as well.

 

[Anttech]

Last time I was in Oslo, I spent 25E on 2 Big mac meals. Any economist here can do a comparison using the 'Big Mac' Scale and see exactly how expensive Norway is..

 

[arildno]

Electricity is cheap, though. It has been at less than half the average European price for a number of years.

 

[ShawnD]

Wow! I knew taxes were high there, but had no idea how high. We don't pay any sales tax on food. Some states also don't have sales tax on clothing.

Canada is a bit like that too but I'm not exactly sure how it works. For example, bread, milk, and whole chickens are tax free. Packaged hotdogs do have taxes. Deli meat does not have tax. It seems almost random how they pick what has taxes and what doesn't.

 

[Anttech]

Electricity is cheap, though. It has been at less than half the average European price for a number of years.

Probably because you have all the oil. Denmark must be kicking themselfs :)

 

[arildno]

Probably because you have all the oil. Denmark must be kicking themselfs :)

Nope. Mainly, it is due to our waterfalls.
Of course, Sweden and Denmark haven't got any waterfalls either.

 

[Anttech]

Anyway, in europe typically Taxes are higher than in the US. But we have a far better 'social' well fair infrastructure. In Europe the rule, 'more money u have the less tax you pay' as a percentage holds true, regardless.

Plus we have many tax havens here, and MASSIVE VAT loopholes, due to the EC attempting to converge the tax system, but the indivual countries not wanting to give Budgeting powers to Brussels.

 

[Monique]

I might be missing something though. What kind of services does your government provide? You probably get free health care, but then so do I. Do parents get free child care? Is university free? Are roads and public transportation of very high quality? Are police and fire services absolutely top notch?

Everyone is obligued to insure themselves, I pay about 115 euros a month for my insurance, which I think is too much (that comes on top of the 29.7% tax), the prices will probably be increased next year. But it means that everyone has a basic insurance for hospitalization etc.
Child care is not free, but parents receive government money for every child to buy clothes, help pay for school etc. University is also subsidized, students receive money to pay for tuition and living expenses and tuition is low: 1500 euros a year. Roads are very good quality, public transportation is good too. Police and firemen are also good (although the police never has time when you need them).
When you become unemployed out of your own fault or by some kind of injury (like a bad back) you will receive income by the government.

 

[Anttech]

Nope. Mainly, it is due to our waterfalls.
Of course, Sweden and Denmark haven't got any waterfalls either.

And fish

 

[ShawnD]

If you register the car in the US, you most certainly will pay a tax based on the value of the car at the time you register it. The states I've lived in have all closed that loophole that allowed you to buy a car out of state and drive it home and avoid paying taxes. It's a state tax, not a federal tax, but tax nonetheless.

That's so weird because Canada has nothing like that, and Canada's system seems very backwards of what you would expect. First you buy a car, and you get a bill of sale. You don't take this bill of sale to the government, you take it to an insurance company. You buy insurance and they give you a pink card. You take your pink card and your bill of sale to the government and they will give you a registration card and a license plate if you ask for one. I did this whole process about 4 weeks ago so I can tell you how much it all cost.
Car = price of car, sales tax, tire tax, AC tax, delivery fee ($24,000 for a $20,000 car)
Insurance = price of the insurance (no extra fees here)
Registration = $56, not including license plate since I already owned one (making the plate invalid for the previous car)

The government will not register the car to your name unless you have it insured.

 

[Anttech]

Everyone is obligued to insure themselves, I pay about 115 euros a month for my insurance, which I think is too much (that comes on top of the 29.7% tax deduction), the prices will probably be increased next year. But it means that everyone has a basic insurance for hospitalization etc.
Child care is not free, but parents receive government money for every child to buy clothes, help pay for school etc. University is also subsidized, students receive money to pay for tuition and living expenses and tuition is low: 1500 euros a year. Roads are very good quality, public transportation is good too. Police and firemen are also good (although the police never has time when you need them).
When you become unemployed out of your own fault or by some kind of injury (like a bad back) you will receive income by the government.

Yeap, in the netherlands, you can *actually* see where the tax money goes, in Belgium you can't ;) The Transport infrastructure in NL is great, very good engineers.

 

[arildno]

And fish

And the Danes haven't got any extensive woodlands either.
(For the record, the municipality of Oslo consists of about 60% lake&woodlands regions open for the public. That beats Brasilia, I think. )

 

[Anttech]

And the Danes haven't got any extensive woodlands either.
(For the record, the municipality of Oslo consists of about 60% lake&woodlands regions. That beats Brasilia, I think. )

And 100% is covered with snow for 6 months :) hehe.

I like Norway its a nice country, been there a few times. Oslo airport looks like it was carved from one massive tree...

 

[arildno]

And 100% is covered with snow for 6 months :) hehe.

You had to bring that up, didn't you?
Still, even though we "hate" the winter when it is upon us, we panick when the snow melts in the lowlands around Easter time.
So, what do the fool Norwegians do?
They flee spring and run up in the mountains to ski some more..

 

[Anttech]

I know in Lapland in Finland they have ski resorts at 300m. I thought that was cool, you could almost ski to the 'beach' :)

Do you have anything like that in Norway?

 

[arildno]

There aren't any beaches in Norway*. Just rocks.





*Poetic license

 

[TuviaDaCat]

I can't understand how a country can have 19% sales tax without the economy completely crashing. Buying a new car would actually be cheaper if you bought it in another country and drove it back.

From the looks of it, Canada's taxes aren't too bad. Most of you guys are paying way more than me, and Chi is paying less simply because he has kids and I don't.

well actully they would just make a tax for buying things in high sums from foreien counties...

here its 17% for sales, and 50% for cars, they say its for roads funding, but i yet find traffics every day in the morning and in the evening... so god knows who gets the money...
though if the viechle is used for work, it costs no tax i thing...
its crazy i know... think of it.. a doubled price for a car, and ordinary car here would cost 20000 to 30000 dollars...

btw, i have a question, universities here costs 2200 dollars a year, it that considered to be a good price for a social democraic country?

 

[brewnog]

Think I pay something like 32% for tax and national insurance, with more compulsory student loan deductions.

 

[ShawnD]

btw, i have a question, universities here costs 2200 dollars a year, it that considered to be a good price for a social democraic country?

I paid $3,200 Canadian for last year's tuition; not including books. It's way more expensive in the US. 2200 seems reasonable as long as foreigners don't get that same discount rate.