Here in France, as a contractor, if I bill a client 100 000€ annually and decide to get as much as possible in personal income, 30 000€ will go as social taxes (health, retirement ...) and for the remaining 70 000€ you will have to pay around 25% as income tax (if you don't have any children).

You will have an income of ~52 000€ for 100 000€ billed during the year. You're not earning millions and yet around 50% of revenue was paid for tax purposes.

In the US as a contractor making $100,000. You would pay $15,000 in social taxes. Around 25% in income tax depending on which state you lived in and still need to pay for health insurance. So taking home 50% of your pay after taxes and insurance is about what you would expect.

1099 income works roughly the same way in the states.

25% is what I would expect. You're getting some of the other expenses back eventually (hopefully) in form of pensions, unemployment (if you ever need it) etc. Health itself is a service you are buying. I wouldn't call it a tax despite it being mandatory. I think taxes are too high and the system needs to be redesigned but I just think we need to be exact on our figures when we discuss this stuff.

You can expect whatever you want, but no middle class person pays as little as 25% in Europe, only the wealthy and the desperately poor get away that cheap.

Unless you do not mind moving every 7-10 years.

I'm middle class and that's about what I pay (effective tax rate) in Germany. It's a bit less actually.

As I wrote elsewhere, if you make below 50 k in Germany and your wife isn't working, I don't think that's a very comfortable life style.

I want for nothing.

Edit: I just want you be clear here. I think the tax rate is way too high even at 25% effective tax rate. The system is overburdening poor people no doubt about it but I also think we should not fudge the numbers by claiming we pay the top tax band rates as effective rate because it invalidates whatever else we say after that. It’s dishonest. IMO effective tax rate should be <5% and actually 0% for most of us.

As I wrote somewhere, most middle class people people in Europe pay way more than 25%, the average in Denmark being 45%. With payroll tax it would be more like 55%, and it really makes no sense NOT to count payroll taxes.

And 5% is not realistic, even if you eliminate all the pork, corruption and inefficiencies. You can't provide education and healthcare and maintain infrastructure for 5%.

I hate paying taxes but 20% would definitely not feel unreasonable for all those things, I'd pay that happily.

You get the money from other places than income tax on the poor

The poor are already an insignificant tax base, I thought you meant 5% for the middle class.

Middle class are the richer cohort of working class but they are still poor. We have a capitalist system. Unless you don’t have to trade time for money (ie are wealthy) you are poor. You might have a nice lifestyle but you have zero flexibility and options.

I get what you're saying, it's not strictly income tax, but the end result is the same : it's a mandatory tax, based on what you earn. As for getting these expenses back, I hope I will have work and be healthy for as long as possible, and I'm happy to pay these taxes for poorer people to get access to healthcare or unemployment benefits. But I sure feel ~50% of my income is going into taxes without being a millionaire.

His numbers aren't false for France. I don't have my last payslip on hand right now but it show cost for employer and it's roughly the double of what you get after taxes. Something like 3k€/month before tax turn into around 2100€ for you but your boss have social charges on top of it so for him it's more like a 4k€ cost.

it sure feels like taxes because it is based on your pay. In other countries like Switzerland it costs the same if you earn 5 or 10 k CHF.

In Germany health insurance for example is also based on income but it's capped. My point is that it is more nuanced than 40%. No one counts the money they get back from these programs when they need to use them in their calculation etc

Or you live in Europe. The _average_ Danish taxpayer pays 45% in income tax. This is not counting payroll taxes that the company pays on top of that, or of course 25% on everything you buy. So the overall effective tax rate is more like 75% than 50%.

There used to be a slogan in Sweden, "half left", meaning people wanted to keep at least half of their gross pay.

https://www.usnews.com/news/best-countries/articles/2016-01-...

As an American citizen who paid $30k for healthcare last year and looking at college for two kids in less than a decade, I'd take the Danish deal laid out in that article pretty happily.

I live in Denmark, and frankly speaking I think most Europeans view the US as a kind of developing country. It can be nice if you're well off, but so can Rio or Capetown. Thinking about it Capetown is much nicer than most US cities.

People like to complain about taxes here, a lot, but where would we get the standard of living without it? Seems there is a disconnect. In the US, where, by the way, you pay quite a lot of tax still, you can end up living in a box or get worse health treatment even then. We do not get things for free: we pay taxes for it. It can be lower because we could cut corruption and inefficiency but it would still be a lot and people will still cry in forums.

I pay an effective income tax of 45% (14.1% "arbeidsgiveravgift"[1] and 36% income tax after deductions).

And when I buy stuff I then have to pay 25% VAT (12% on groceries). So the effective tax is 59% except for groceries.

[1]: https://www.skatteetaten.no/en/rates/employers-national-insu...

Do you get payments from the Statoil?

Not directly, no. Gov't uses parts of the oil tax money to fund budget deficits, but they've limited themselves to how much.

https://www.regjeringen.no/no/tema/okonomi-og-budsjett/norsk...

I was under the impression you also got a dividend/basic income of a few thousand a year like in Alaska?

No, nothing like that.

Though you can get support if you're temporarily without a job[1], sick[2] or declared permanently unable to work[3].

These programs are of course partially funded by the oil tax money, by virtue of being part of the government spending.

[1]: https://www.nav.no/no/person/arbeid/dagpenger-ved-arbeidslos...

[2]: https://www.nav.no/no/person/arbeid/sykmeldt-arbeidsavklarin...

[3]: https://www.nav.no/no/Person/Pensjon/Uforetrygd

I pay easily 40%+ effective tax on my income in NL. Not sure why you’re so dismissive of the poster.

Because many people in Western countries do not fully appreciate how well off they are in global terms.

https://www.icalculator.info/netherlands/income-tax-rates/20...

   37.35% Income from €0.00 to €68,507.00

   49.5% Income from €68,507.01 and above

Therefore if you are (for instance) paying 40+% effective tax on your income in the Netherlands you're clearly earning north of €70k a year. To put that in context – “You Are The 1%: If You Make $35K/Year Income” https://www.diygenius.com/the-global-inequality-problem/

So that other person is being dismissive (though dismissive is the wrong word) of the poster because generally at these sorts of rates you're earning greater than 99% of the people on the planet.

If you're earning greater than 99% of the people on the planet and you simultaneously think there's an injustice being done to you by the tax man then I would humbly submit that you could do with a reality check.

And we're not just talking about in comparison to the so-called global south here, there are many many people in the EU and around greater Europe who would be thrilled to be earning north of €70k a year.

Income is usually relative to the person’s location. It’s not very useful to compare my situation to that of a person in the global south. Income correlates closely to cost of living.

I fully appreciate that I make more money than “a lot of the world”. But I don’t think it’s wrong to ask that corporations and high-net-worth individuals, also pay their fair share and not just leave the burden to people like me.

That is more the issue, well for me anyway; taxes are fine and the height is not really relevant but I do not want to be holding the bag here. If someone who earns a billion pays 5% why would I pay 40%? That is my only real complaint about taxes and I hear this from wealthy people: why would they if their friends do not? It is tax, not charity: except yes it is a lot of charity but it is anonymous so you cannot get charity kudos. So those who can avoid and you have a problem. Not sure how big the problem is in money, but I think many people would have a better feeling about forking over 40% if they knew the billionair around the corner is paying 60.

You can pay tax at a high rate and still be well off, there is no contradiction. In fact the highest tax rates tend to be in the most comfortable countries, in Northern Europe.

Nobody is saying "I would rather move to Sudan and lower my tax rate".

Congrats you are earning a lot. You should be grateful to be in such a privileged position few can dream of.

Not really, I wish I were. Here’s the NL tax brackets:

* € 0 - 68.508 37,10%

* € 68.508+ 49,50%

There is no tax free allowance in NL? Do you pay extra for healthcare or is it paid for out of that amount?

Healthcare is paid from post-tax income. As a single person, I pay approx. €150 monthly. There is also a deductible of €385-885, and choosing a lower amount means you pay more per month too.

There is no tax free allowance. There is general/labor tax credit, but it’s incredibly minimal and reduces with income:

* €2.837 for those with a taxable income under €21.043

* €2.837 - 5,977% x (taxable income - €21.043) for people with an income between €21.043 to €68.507

* €0 for people with an income over €68.507

TIL. I thought absurdly high tax rates were a nordic specialty. NL seems very wealthy whenever I visit. Are median incomes substantially higher than surrounding countries?

The Netherlands is a tax haven for corporations. Individuals bear the brunt of ensuring a high QoL. Median income in 2021 is €36.500, so quite low tbh.

The only kind of income you can avoid taxes on is capital gains - i.e. investing in stocks or real estate. Obviously this is not feasible for the general population, and as such, most people spend their entire monthly income on rent/mortgage, kids, and living expenses. There is no concept of saving, because the assumption is that you can accumulate enough pension to live off of.

I have known many Dutch people over the years who have gotten a lot of benefits from the state from unemployment to housing. Some of it clearly fraudulently too. Seems to be unsustainable.

While I do not condone benefits fraud, it’s just a drop in the pond.

Government projects are quite corrupt, and often go way over budget. Of course, this is a global problem as well.

The main problem is corporate tax evasion. Pretty much every multinational funnels money via NL, while paying almost nothing.

For example - IKEA, Walt Disney, FAANG, Uber, and innumerable more are all Dutch BVs for most global activities.

Sorry I agree with you. I didn't mean fraud was a big cost, only that social spending (including non-fraudulent) seems to be very high and not tightly controlled (which as a side effect allows for easy fraud). From the outside society seems very stratified. Plenty of Telsa's in Amsterdam and people with expensive tastes. NL is obviously a very wealthy place even compared to neighbouring countries but also has a large less wealthy population. This is another angle to the problem (in addition to the corp tax regime) because it unfairly puts the tax burden on people like yourself.

Social spending is quite high, but I’d like to believe that atleast it’s enriching the average person and not only corporate execs.

The reason there’s so many Teslas is because up until 2021, you could get significant tax benefits, if you purchased an electric car via your employer for “work”. If you look past Teslas, you’ll see that most people own average family cars.

Amsterdam does have people with “expensive tastes”, but that’s not representative of the rest of the country. It’s similar to what you’d see in New York or London vs. the rest of their respective countries.

Most of the wealthy people I know own businesses (and as such benefit from the lower taxes), or own lots of rentable real estate.

>you could get significant tax benefits

This is a significant piece of information in this discussion.

Well, again, this only really helps people who are able to swing such an expensive car as a “work expense”. In absolute numbers, Teslas are a minority of 0.4% in the NL car market.

source - https://www.statista.com/statistics/780316/market-share-of-t...

€150/month for healthcare? Ya, that could work lost tax. Switzerland also pays for health insurance premiums post tax, but they are nowhere that cheap.

How much would you pay as a single person? And what does it cover? If you have a family, premiums increase significantly.

In NL, €150 doesn’t cover emergency care, dental, eyes, or various specialists. Medicines and treatments are also part of the deductible.

400 CHF/month. If it doesn’t cover emergency care, then what good is it? You can’t really call it health insurance.

Wow, 400 CHF is a lot! NL does guarantee emergency treatment will be provided, and the excess above the deductible will be paid by the insurer.

Aside, I’ve had friends who moved and found that Swiss income taxes are also much lower than NL in most cantons. Is that true in your case too?

I haven’t lived in Switzerland for awhile but ya, their taxes are somewhat low, though I think their VAT must be high (hard to tell if it’s taxes or just a high COL).

As an American, it gets harder to live in Switzerland because of the lower tax rate and high COL once you break through the foreign earned income exemption.

We pay for healthcare.

There is a free allowance for "foreign skilled workers". They pay 0 income tax over the first 30% of their income. It's total and utter bs. So if you earn 90K, you get 30K net, and get taxed as if you earned 60k

Society should be grateful he/she is so productive as to deserve it.

What a load of horseshit, just take a look at a bunch of western european countries.

https://taxfoundation.org/taxing-high-income-2019/

Then there's a 21% sales tax for everything but food and medicine in the Netherlands aswell

Yup, it’s easier to just look at total tax revenue as a percent of GDP.

https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rev...

It’s not perfect as not all taxes are borne by the individual, but it’s gives you a ball park.

Netherlands 39%

Switzerland 29%

For fuel it's insane. We pay €1.80 // $2 for a liter of fuel. That's $7.5 per gallon. This includes:

- VAT - Excise - Kwartje van kok (was supposed to be temporary, already > 20 years there)

Check Austria. Without any expenses a dev with a US salary will pay more than 40% in taxes and social benefits. Let's say you have 250k EUR, 12% of it you can take without any taxes (given no expenses, which is ~25k EUR), but then on 225k you pay 112.5k to the government. That's it. Then you take into account VAT and you realize they are really sucking you dry but all of the giants in collusion with Austrian banks avoid taxes easily.

Of course, you can game the system with fictitious useful expenses (travelling but saying you went to a dev conference etc.) but it's hard to really accumulate much if you live a somewhat normal life.

https://en.wikipedia.org/wiki/Taxation_in_Austria

In the UK, if you're a contractor caught by IR35 and earn £600 per day, your effective tax rate is 40% if the client allows you to engage using your Ltd. company. If you use an umbrella you'll be even worse off. Net income from the arrangement would be £69,925 based on 190 days billed.

Yes, it's very hostile to independent contractors, especially with the new rules this year.

I'm not a conspiracy guy, but it's amusing to note that Rishi Sunak, under whom the changes came in this year, is related (son-in-law) to a cofounder of IT consulting behemoth Infosys.

What's the effective tax burden on a self-employed single person making $300k in, say, Massachusetts (5% income tax; not exactly the highest in the US)?

Based on 2020 US tax brackets, standard deduction, including the both sides of FICA (capped at the social security cap for the social security part) and the medicare extra tax they are paying, I am ending up at ~37-38% effective (not marginal; marginal is 43.8%) tax or so. This individual would in my mind be excused for claiming that they pay "40% in income taxes" and is not making "millions" (though obviously is not suffering financially).

In the UK you pay a flat 40% over around £45k, no ambiguity whatsoever, then 45% over £150k. Not exactly millionaire status.

150k sounds very low when you take into account this tax rate and the property prices in London.

London property is considered abnormally expensive in the U.K., and £150k is only slightly less than the £157k which the Prime Minister earns.

Median U.K. income is £29,400: https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom

To be fair, though, the prime minister's salary is generally a drop from whatever job they would be doing instead (making no comment on whether that's right or wrong). Same with judges, I believe.

You also lose your personal allowance between £100-125k, which bumps up the effective tax rate.

They are surely talking about Europe. Not US.

I live in Germany and pay between 20-25% of my income in income tax depending on how much I bill. I easily support a family of 4 on this. Rent, car, holidays, the lot.

I believe, when you are employed, you must also pay pension insurance, unemployment insurance, health insurance and other. No way you will be at 20-25 percent in Germany.

When you count employer contributions, then you are quite close to 50%.

According to Wikipedia, if you pay 25% income tax in Germany you make €50 k, which doesn't sound like a very comfortable family income, unless you live in the country side perhaps.

In the Netherlands:

70k -> 24k tax / 34%

90k -> 35k tax / 38%

120k -> 51k tax / 42%