You're double counting the "Federal double tax." Also, the marginal Social Security tax is $0, since it phases out long before you hit those marginal rates.

That being said, the reason France can offer robust services while California cannot, even though tech worker taxes are similar between the two countries, is because France taxes everyone that way. In France, the 41% tax bracket (just a little lower than the top bracket of 45%) kicks in at 71,000 Euros (about $80,000). The U.S. federal rate in that bracket is 25%. Then there is the 20% VAT paid by even the lowest income people.

Yep, you're absolutely right, I did double-count the double-tax. Your comment had me re-run the numbers, and this is what I came up with. You are correct that Social Security goes down to $0.

Medicare contributions have no cap, and are 1.45% by both the employer and employee and the 0.9% Obamacare surcharges on the employee only portion (until 2035) kicks in over $250,000 also. Therefore, social insurance contributes a marginal 3.79%

So, the numbers to the best of my knowledge should have been:

13.3% of all income (State) +

39.6% of all income (Federal, including the Donny double-tax) +

2.34% of all income (Medicare, Obamacare - Employee Contributions) +

1.45% of all income (Medicare - Employer Contributions)

=====

56.69%

Then you still have to deal with the fixed portions, the $19,616 [1] in healthcare premiums, the $7,347 you'd have paid in social security tax and the $7,347 your employer would have paid in social security tax. [2]

[1] https://www.kff.org/health-costs/report/2018-employer-health...

[2] https://www.bizfilings.com/toolkit/research-topics/managing-...

None of that is on all income; base Medicare is only on labor income, the Medicare surtax is on either (specifically, the lesser of) labor income or net investment income above certain thresholds, and the rest is on “normally taxed” income (but not, e.g., long-term capital gains, or gifts and inheritances—which, even when beyond the enormous exempt quantities, aren't taxed as normal income for the recipient, but to the giver or estate, and in California at a lower combined maximum state and federal rate than normal income tax, 40% federal and no state.)

And NSO stock options, which is likely very relevant to this audience.

> France can offer robust services while California cannot,

France offers much more social security than whole US.

Most of the US has much lower taxes than California.

The top marginal tax bracket in CA is for single people making $1M+, and higher if married. That's a lot, even for software engineers.

A more realistic total combined tax for most people is well under 50%.

For the UK with the NHS that figure would be 32% for most single people and less for those with kids.

You've excluded employers national insurance contributions here, which is 13.8% of total pay. That makes the true "main" marginal rate c.44% (20% tax + 12% employee national insurance + 13.8% employers NI / 113.8%).

Most higher earners in e.g. tech or professions will be in the 40% band at least, where the true marginal rate is c.49% (40%+2%+13.8% / 113.8%).

The "top" marginal rate is c.53% (45% tax+2% employee NI+13.8% employer NI / 113.8%) although the highest marginal rate comes between £100k and c.£123k as the personal allowance (bottom 0% band) gets withdrawn making the effective rate (40%+50%x40%+2%+13.8% / 113.8%) = c.65%. (And at the very low end of the scale, as benefits get withdrawn the marginal combined rate of tax and benefit withdrawal is also extremely high).

We don't allow joint filing for married couples which is a significant benefit, especially for single earner couples with high earnings, in the USA.

Then we have mandatory minimum private pension contributions (given these all go into a defined contribution scheme, it's just pay by another name), the apprenticeship levy, etc etc.

Overall, I'd say the UK and "high-tax" parts of the USA (California, New York etc) are similarly taxed at least as far as income is concerned.

Adding the employers contribution to calculate marginal rates for employees is not how its calculated.

Do you think any employer in the uk would magically give you the 13.8 if employers ni went away.

And most STEM jobs including tech don't get into the higher band at 46,350 I think you ignored the tax free band.

Yes I do think it would be likely to end up in employees pockets for many actually, over time (but probably only for a few overnight). This is what has largely happened with employer pension contributions which were capped first via the lifetime allowance and then the taper down from 40k to 10k for income over 150k. Most employers now offer a cash (ie salary increase) alternative at neutral cost to the employer.

Not including employers contribution when comparing countries is just non-sense to me: the only number that matters is the total cost per added employee for a business, and on the other side for the employee the after-tax money that remains after everything is deducted. And then you can put the services you get for the money (i.e. yes taxes are higher in France for instance, but the state provides also much more).

Withdrawal of child benefit puts a 60% or more marginal rate from £50k to £60k (plus the 12% employer ni)

The professionals in the UK work on a b2b basis because with current salaries and taxes it makes no sense to be an employee. Still you get taxed highly, but it is slightly better. Sadly the Tories are turning left and they look into taxing professionals too. I would be looking into leaving the country if they do.

And it's the third biggest economy in the world. My conclusion is that having a huge healthy educated talent pool is more important to companies than taxes.

I agree completely.

California is an outlier!

After taxes, insurance and maxing out my 401k (i.e. all the stuff that comes out of my paycheck) I take home 56% on the East coast (in a high tax state no less). I also pay less sales tax and transportation costs than I would in CA and I can afford a house with less than six figures (gross) household income.

You make paying 45% for France's system sound like a deal for a lifetime.

45% is only the (higher bracket) "federal taxes" (France isn't a federal country) that don't include all the welfare contributions which are taken from your salary (22% IIRC) and also the higher employer contributions.

Edit, FYI: - 14% from 9 964 € to 27 519 € - 30% from 27 519 € to 73 779 € - 41% from 73 779 € to 156 244 € - 45% beyond 156 244 €

And the table here for the social contribution that are taken out of your pay before the taxes above are applied: https://fr.wikipedia.org/wiki/Cotisations_sociales_en_France...

I left those out of my headline numbers too though.

Yeah I just clarified because of the part that said "for France's system", this part of the tax is not what's paying for the welfare part of the "system". According to https://argent.boursier.com/impots/analyses/ou-va-largent-de...

- 23.5% for tax credit for other people (i.e. think about solar panels, etc.)

- 15.7% for primary/secondary education (i.e. from kindergarten to 12th)

- 13.6% for counties and other local / regional structures.

- 11.5% for interest on the debt.

- 9.35% for the Defense budget.

- 6.35% for Universities (education and research) => This is paying for ~ free education!! Probably the best deal in the French system compared to the USA.

- 5% for Europe

- 4.3% Police

- 1.9% Judiciary

You aren’t paying the top marginal rate unless you make over $600k as a couple or $500k as a single.

Also the top marginal rate is 37%, not 39.5 (Thanks Donny.)

And SALT? Rather than “thanking” Donnie for the reduced deductibility, perhaps complain that they are so high as to exceed the allowable cap in the first place?