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Why higher-income workers in California may get surprised by tax hike in 2024

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Re: Why higher-income workers in California may get surprised by tax hike in 2024

#21

Post by gmerc »

personomas wrote: post #9
grecy wrote: post #4

Earlier quoted context omitted.

A decade or so ago I read an article titled something like "If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets". My tin foil hat theory as to why I can't find it is because it was removed in hopes of preventing those riots. It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.

Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes. Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).

As a young person it may be trivial but health related bankruptcy in the US tells another story overall

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#22

Post by gmerc »

raesene9 wrote: post #10
gamblor956 wrote: post #6

Earlier quoted context omitted.

It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note tha…

Do you have a citation for the idea that wealthy Europeans are getting the bulk of their treatment in the US? I can't say I've ever come across that idea at all. I've heard of people paying for private medical care, to supplement their free healthcare, but not traveling to the US for it.

European Health and Dental Tourism is Korea and BKK these days, nobody in their right mind would go US unless it’s a very specialized condition.

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#23

Post by olddustytrail »

refurb wrote: post #17
Reubend wrote: post #3

Earlier quoted context omitted.

That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…

European marginal tax rates that high kick in at a way lower income, resulting in a far higher tax burden on the middle class. France is 41% at 78k EUR. UK is 40% at 37k GBP, Netherlands is 50% at 73k EUR. Then add on top the VAT which is high teens. You’d need to earn over $200,000 to get to a >40% marginal rate in CA, with the standard deduction and SALT it’s probably closer to $300,000. Europe taxes the middle cla…

That's incorrect for the UK, though the gov page is confusingly worded. The basic rate is applied to £37,700 of income but you have to add the tax allowance of £12,570 onto that, so the 40% rate kicks in at £50,270.

Edit: plus it's not exactly the UK since Scotland has different tax rates and services but I think it's confusing enough already.

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#24

Post by broken-kebab »

dukeyukey wrote: post #15
personomas wrote: post #9

Earlier quoted context omitted.

Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes. Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).

Worth pointing out that lots of Europe doesn't really have property taxes, something that is common in the US.

Really? To the best of my knowledge all the EU members have property taxes.

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#25

Post by profeatur »

gamblor956 wrote: post #6
Reubend wrote: post #3

Earlier quoted context omitted.

That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…

It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note tha…

This is generally true, except that it’s not necessary to travel to the US. You can see a local private doctor or dentist (often accredited by a US university, using US developed medical technology) locally.

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#26

Post by infinityio »

nly wrote: post #18
Reubend wrote: post #3

Earlier quoted context omitted.

That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…

Highest marginal in the UK is technically 47%, but for certain bands and life situations it can be as high as 80% (loss of certain benefits phased in at certain income thresholds)

Can you provide an example of this for an employee of a company? I can't figure out a way of making that the case - even inside the "60%" (in relative terms) band - at £125k your actual tax burden is 36% (44% incl. employer contributions)

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#27

Post by personomas »

gmerc wrote: post #21
personomas wrote: post #9

Earlier quoted context omitted.

Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes. Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).

As a young person it may be trivial but health related bankruptcy in the US tells another story overall

EU health care is horrible - absolutely horrendous. It's very difficult for a young, working individual to get quality health care in a reasonable time - actually, almost impossible. I would definitely rather take the US health care situation over EU health care. Doctors are muchmore competant in the US, and they are much more likely to go out of their way to help you. One reason surely because EU doctors are unbelievably overwhelmed, working in health care in the EU must be really really horrible.

In my opinion, if the EU social benefits are even a little bit better than in the US, it's definitely because of other factors, not at all because of health care.

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#28

Post by personomas »

meetingthrower wrote: post #19
personomas wrote: post #9

Earlier quoted context omitted.

Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes. Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).

Your perspective depends on your income, obviously. If you are a truly middle class income (say $70K which is median household income in US), the benefits you get are HUGE relative to the taxes you pay. Not to include the insecurity of being one health event away from bankruptcy...

Total disagree. See my comment up above (1). Health care is horrible in the EU. At least in America you can choose to go bankrupt in exchange for quality health care treatment. In the EU, if you ever even get Doctor time, it's always rushed, and very often misdiagnosed. This is coming from an American living in Germany.

(1) https://news.ycombinator.com/item?id=37809938.

Re: Why higher-income workers in California may get surprised by tax hike in 2024

#30

Post by infinityio »

olddustytrail wrote: post #23
refurb wrote: post #17

Earlier quoted context omitted.

European marginal tax rates that high kick in at a way lower income, resulting in a far higher tax burden on the middle class. France is 41% at 78k EUR. UK is 40% at 37k GBP, Netherlands is 50% at 73k EUR. Then add on top the VAT which is high teens. You’d need to earn over $200,000 to get to a >40% marginal rate in CA, with the standard deduction and SALT it’s probably closer to $300,000. Europe taxes the middle cla…

That's incorrect for the UK, though the gov page is confusingly worded. The basic rate is applied to £37,700 of income but you have to add the tax allowance of £12,570 onto that, so the 40% rate kicks in at £50,270. Edit: plus it's not exactly the UK since Scotland has different tax rates and services but I think it's confusing enough already.

to summarise this - in practice, a person earning £50,270 under 1257L is paying 24% of their income as tax. Ever £1 they earn above this value is taxed at 40% up to £125k (although there are also some losses of benefits at £100k)
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