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July 06, 2007

Who pays what (edited to correct the numbers)

Avedon Carol (of the The Sideshow ) linked to a study of the relative tax burdens in France, the UK, ad the US (using Tennessee as the example state, for secondary taxes).

Facing South did the work.

They did it in relation to Sicko, but the real point is that the tax burdens in those, "Socialist" countries, the one's we are told we are better than, because we pay less in taxes, is equivalent, and might be less (esp. for people at the bottom of the scale).

It also shows that being wealthy isn't punished; unless of course you think the sort of wealth disparity we have now is a good thing. 

Me, not so much.  The French Revolution came about because of that sort of disparity (as well as no evidence that anyone who was in a position to do anything about it cared to.  The alleged quotation of Marie Antoinette is mistranslated as, "let them eat cake." The French versions I've seen were even worse, in context.  When told the peasants didn't have any bread she said, "well, don't they have brioche?"  It's apocryphal, but illustrates the lack of empathy which was seen as rampant in l'ancienne regime.

Here's the number which tells the tale.

A person making $50,000 in the Tennessee (which has no income tax), has $2,000 more, after taxes, than does the resident of UK.  They do, however, also pay taxes on food, which adds about nine percent to the cost.  Add in the cost of healthcare (Kaiser's cheapest individual plans run about $150 a month x 12 + the cost of drugs = not less than $1,800, if you never have to buy any drugs).

If one lives in state with income tax, the bite is greater, because sales taxes (in most states) added to income taxes, combined with the cost of health care (or the gamble of not having health care and needing treatment) will wipe out at least the difference between take home pay in the two coountries.

 

So the UK resident has health care, and a more solidly built social safety net.

We pay more, and don't get any of that.  So what's wrong with "socialism"?

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Comments

I have a feeling I'm missing something, but one of the tables at Facing South doesn't seem to add up. The $50K take-home pay table shows, for Gringolandia, the following:
Payroll Tax $3750
Income Tax $6945
Take-home $30,855

These three add up to just $41,550, not $50,000. I can't figure out where that other $8,845 is subtracted. It doesn't appear to be healthcare costs, and if it has something to do with sales tax that's not made explicit.

Am I wrong, or is the table off in some way?

I'm not sure. I suspect (though I can't prove) that the missing money is a combination of sales tax and state income taxes (which vary).

Further up they have a table which lists payroll taxes, and income tax (on $50,000) and that totals $14,445. That closes the gap some.

On the flip side, the threshold for owing money, in the first place, is higher in the UK, so the folks below $50,000 are probably doing even better.

I'm not sure. I suspect (though I can't prove) that the missing money is a combination of sales tax and state income taxes (which vary).

That may well be the case; if so, I wish the math were more transparent. The conclusion is entirely dependent on the calculations, so I'd like to have more confidence in the calculations before endorsing the conclusion.

I agree. That makes it difficult.

On the flip side, I'm willing to pay that extra money, to see to it that everyone has adequate health care.

I've been to Britain, people there seem more cheerful, less burdened by unstated anxiety. I'm willing to spend some money to make that happen.

In the US, payroll taxes are only half paid by employees. Employers pay the other half. The other half of the payroll taxes doesn't effect the nominal take home pay of the employee.

On the flip side, I'm willing to pay that extra money, to see to it that everyone has adequate health care.

Agreed.

I recently toured the squalid socialist hellhole of Denmark. Don’t visit if you have a weak stomach. On every street one sees yet another grisly tableau of wretched survivors vainly straining to eke out a desperate, hardscrabble semblance of an existence. Every last man, woman, and child is beset with a crushing burden of unrelenting toil and heartbreak. Utterly bled of all hope, there is nothing for any Danish citizen to look forward to but crippling, confiscatory taxes brutally levied by a rapacious and heartless government. How do we know life in Denmark is grim? It’s immediately apparent: no one’s fat and they have all their teeth. Clearly they’re getting so little to eat they have nothing even to chew. Denmark is a repellant society of brainwashed robots where no one seems to understand just how tragically debased they’ve become. I couldn’t fathom why they didn’t all want to leave and go to the USA. I know I was glad I could. North Korea, Scandinavia; what’s the difference?

Free livers for drunks from the Inner Cities! Everybody twist!

Not only is the U.S. number off by close to ten thousand dollars, but the Canadian tax figures appears not to have taken into account the relatively brutal provincial taxes charged by all provinces. Most provinces charge income tax as a percentage of the final federal bill. Example: you owe $9,000 Canadian in federal taxes, your province has a "50%" tax rate, you owe $13,500 net of credits and withholdings.

To compare, Rhode Island uses a "25%" bracket rule based on income as previously taxed by the federal government before the Bush cuts. Canadian "piggy-back" tax rates can almost double the effective rates, especially in rapacious Quebec, which does not use a "piggy-back" system but just brutalizes Quebecers' paychecks under a provincial rate system more than any other province dares to do.

Finally, the article did not note the single biggest difference between Canadian and U.S. taxation: the deductions for home mortgage interest and local income, sales and property taxes, which shield most parts of most Americans' income. A person making 50K in Memphis might not be able to afford a house, but one in rural Tennessee could, and probably would. This skews the numbers further but the study did not mention, let alone include, that factor. Canada has no such deductions as present.

The $9,000 figure is nice, but mendacious.

The actual tax, at $50,000 is, in "rapacious Quebec", apparently, $12,212 http://www.taxtips.ca/tax_rates.htm>Canadian Tax Tables, with Provincial rates

Qubeccers, however, get a 16 percent abatement of the federal tax, so the total might be less. Not being Canadian, I can't say, but that's what it looks like on the http://www.taxtips.ca/qctax.htm>Quebec rate page.

Simple math: I would (literally)be dead without the Canadian health care system, and life is priceless.

According to Forbes "tax misery index", Canada doesn't do all that badly compared to the USA. For instance, with 50,000 gross pay (they adjusted all currency to Euros) a single person in Ontario does slightly better on their net pay than a New Yorker, slightly worse than those in Texas or Illinois; married with that amount of money in each country slants more toward the USA. The differences are, however, a few thousand (3-4) at most which if you then include cost of medical insurance would pretty much wipe out any USA advantage; in fact, with many medical plans in the USA there's copayments which alone could easily wipe out this difference even if medical was otherwise free.

When you get to the rich folk the differences are bigger. People who have million dollar salaries, for instance. Maybe... okay, this is radical I know, but maybe, just maybe, we in the USA should stop writing our tax codes to benefit the rich at the expense of the middle class and poor.

You should probably correct this post to reflect the corrected numbers on Facing South. And btw, there's no state income tax in Tennessee, because it's forbidden in the state constitution.

Well, sure, these places all give their residents medical care and a social safety net. But you have to remember, people in these other countries can't brag about subsidizing Halliburton while destabilizing large nations and causing the deaths of many of their residents for no particularly good reason. Well, maybe the folks in the UK, to some extent. But they have car bombs.

The question I'd like answered is "How does France provide healthcare and retirement income with a 14% wage tax, when the US has a 15.3% wage tax to provide retirement income only?"

Lindsay, still not getting it, I see.

pecunium,

Facing South made a mistake, and corrected it; the US take-home pay is $39,305, rather than the prior (mistaken) $30,855.

Where are you getting this figure? I still don't think yours matches up, after the correction.

aeroman


You're right. I did the math backwards. Take home pay is 2,000 more for Tennessee.

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cfrost...that was hilarious :)

I think the main problem with the US is simply the utter waste on frivolous things we don't need, like the military industrial complex, along with the huge defence budget spending for not only DoD, but DoJ and DHS. It's fine to pay taxes, but to pay for things which a majority of the population doesn't benefit is wastefull. The sad thing is that a much of the money we spend in these areas simply ends up in some corporate CEO's bank account.

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