Hacker News Reader

Comment by eulji | Hacker News Reader

I would be more interested in data that shows how much money an engineer takes back home (net income) compared to the rest of the world.

eg Software Engineer from Atlantis earns 100 000 USD but pays 55% of tax so takes home only 45000 Software Engineer from Middle-Earth earns 60 000 USD but pays 10% tax and takes home 54000

etc

View on HN

It's very hard to make these kinds of comparison (take a look at the Economist's Big Mac index which attempts to illustrate relative buying power in different places). Similarly income tax may be low (e.g. Texas) but property taxes, sales tax, and tolls may be high (e.g. Texas) and social services may suck (e.g. Texas). There are some cost of living calculators around which try to calculate equivalent salaries around the US but they have not been more accurate than guesswork in my experience.

We're not quite there yet with the data we have :). Anecdotally though, it seems like companies in Europe pay less and take out more taxes.

Maybe, but on the flip side, I finished Uni with about £20k debt, in the most benign from that debt can take, and working in software I immediately earned more than that per year. I also never had to care about medical bills (still don't) because of the NHS.

Just want to point out that there is a good reason for the higher taxes.

I'm from the UK and now live in California. Income tax rates aren't very different.

As a proportion of GDP, Government spending in the US is only a couple of percentage points lower than the UK. The US actually spends slightly more on public healthcare than the UK, 7.9% vs 7.3%.

Of course healthcare here is so horrifically inefficient that another 8.5% of GDP is spent privately...

http://stats.oecd.org/index.aspx?DataSetCode=HEALTH_STAT

Not to mention the higher level of vacation time. Starting allocation in the UK is about 25 days plus 11 bank holidays. In the USA its typically 10 days plus 9 public holidays.

The legal minimum in the UK which just about everyone is entitled to is 28 days paid holiday assuming a full time job [1]. That can include bank holidays which are 8 per year for the vast majority of the population (1 or 2 more for Scotland and Northen Ireland I think).

For example, my first job was 25 days + 8 days of bank holidays and then you could earn up to 5 extra days if you stayed with the company long enough. Other jobs were all 22 + 8.

[1] https://www.gov.uk/holiday-entitlement-rights/entitlement

It's almost as if standard and cost of living are incredibly complex equations that you can't boil down into an HTML table.

Let's throw schools in there... no use taking a 20k raise to move to Chicago if you have a child for instance. You'll pay more than that for the cheapest private school. If you want to use neighborhood schools you can move to Oak Park... and pay 20k in taxes instead...

When I have a 200k income, I don't really care about getting welfare, and I can probably pay healthcare myself. But I don't have that kind of income, and then healthcare, pension and social benefits really count.

We may pay more tax, but I'm glad we have the backup system that keeps you going when you're sick or unemployed.

Healthcare is actually a macro economic question. The private American system is much worse, and more expensive than the British public, universal system which is free at the point of delivery for everyone. Americans spend 17.9% of their GDP on healthcare, while the British only spend 9.6%. Americans are being ripped off by the American healthcare industry.

Personally, I rather pay a 10% tax to cover healthcare rather than 20% of my salary to insurance premiums.

https://docs.google.com/a/hackbinary.com/spreadsheets/d/1aMx...

http://www.theguardian.com/news/datablog/2012/jun/30/healthc...

The sad reality is if your employed, you have good health insurance, and if your not, your visa isn't there either and your back to europe/canada with social services anyway :/

American also has Social Security & 401k (pensions) and health care for the old (medicare) / poor (mediCAL, medicaid), and some social services (public school, various state programs in california)

Comparing pensions does get tricky very quick. In Canada for example there is a deduction from your paycheque for Canada Pension Plan (CPP) (assuming you don't live in Québec), but many employers will also have matching-contribution RRSP (same as a 401k) plans. So when you retire you get government pension plus private sector pension (which would be a mix of what you contributed and what your employer matched). The UK is similar where you get a government pension plus many employers have a tax-deferred retirement savings plan they will contribute to.

I am from the ostbloc som my taxes are are being spent on bribing, corruption etc. We might not be paying that huge taxes but it's still a lot.

I am less compassionate than the other folks in Europe and would really prefer a more capitalistic system at least in my country. But we Europeans are....ehhhh.

Corruption is a problem by itself - it doesn't make the social democracies wrong.

And expect corruption in the private system, too. There's no other explanation for $500 aspirins :-)

A free market is denoted by the absence of intervention by government, price-setting monopoly, or other authority. Under what circumstances are these $500 aspirin being purchased? I have a strong suspicion that some sort of cartel is involved. If not, I'd be happy to supply the market for far less.

Cartel, like in a corrupt system, right? Maybe just what I've said?

If you can get in the healthcare industry in the US you'll be a genius. Or probably a criminal, there's no legal way to get out of the current status quo without government intervention.

I like the free market, but you're oversimplifying reality.

There's another explanation (among many) for $n aspirin, that is to cover shortfalls from public health program reimbursements. It's a similar story with life flights. Not exactly a problem borne out of the private market, unless you're arguing that government intervention is corrupt?

Yep cut the compensation by about 50% and increase the taxation by 50% :)

Yeah but healthcare education and pensions ;)

That tax is buying us stuff.

You could buy it yourself for a lot cheaper than you pay for it in taxes. The taxes you pay are buying healthcare for people who cannot afford it.

(EDIT: I'm certainly not saying this is a bad thing.)

> The taxes you pay are buying healthcare for people who cannot afford it.

Which makes it worth it, imho.

>The taxes you pay are buying healthcare for people who cannot afford it.

That's great! I wouldn't way to be one of the few people able to afford healthcare in a world full of sick people who can't afford to get well...

Of course, the USA is an example of that

Except it isn't, anything you want to do there is ridiculously expensive

In the USA, Obamacare has increased the price of healthcare so much that you might effectively pay a penalty for purchasing your own healthcare.

Healthcare costs were already high in 2008. Setting aside the issue of how much impact the ACA had, the period following the passage of the ACA saw lower price increases than the period before. Last year prices increased at a higher rate again.

I think it's not true that the ACA caused that reduction (the recession is probably a much bigger factor), but it also didn't cause prices to increase faster than they were prior to the ACA.

Ineffectively and for core vote base, not you. This is an old debate.

Regardless of what one thinks of the tax it's clear one can't compare salaries after taxation. Fact is I don't spend anything on healthcare. In the US I would need insurance. I don't save for my kids university education because it will be free. In the US I would have to.

Comparing pre tax income is more useful, by and large.

For what it's worth, I'm almost certain that every company in this survey provides health insurance at no additional cost (or maybe a small cost, but probably not) to all of the employees surveyed.

Insurance in the us is also cheaper in paying 2300 a year for private insurance (AXA) so I won't have to deal with the NHS on every silly issue.

No it's not. Public healthcare spending in the US is higher, per capita, than spending on the NHS.

And how the buggery are you managing to spend £2300 a year on health insurance in the UK? That's crazy expensive. Ok, it's less than people in the US pay, but it's still mad for UK.

2300 isn't that expensive BUPA would cost you nearly double also please don't compare the public healthcare spending it has nothing to do with the actual prices you end up paying.

The health care expenditure in the US is the biggest in the world but that's including all the prices that insurance companies pay for treatment and services. If the US stops charging 3000$ for an MRI scan it's expenditure will go down drastically (an MRI costs about 300$ in most European countries) but it might not have any affect on what the individual ends up paying.

I last looked about 6 years ago, right enough, but then £120 a month was the maximum charge I could find, that was with zero excess and get paid money for any nights in an NHS hospital, etc etc. I'm not sure what I'd need to add on to get it up to £200 a month - a free chauffeur for any time spent sick? ;-)

I suppose prices could have increased a fair bit since then. Also, I note you're in London. I'm in Scotland, so we actually have a different NHS, and it does generally get rated higher than NHS England.

I can compare public healthcare spending as that's the money that comes out of your taxes. Americans are taxed more for their public healthcare than we are in the UK for the NHS. They also pay more for private healthcare than we do in the UK. So your claim that it's more expensive here is simply wrong.

As a counterpoint to this post, I have free private insurance with work and never bother using it because the NHS works so well for day to day things.

NHS is good when you are bleeding and need to go to the emergency room. Preventative medicine and specialist care is horrible under NHS at least in inner London, why would I want to wait 6 weeks to see an orthopedist?

Why does loction matter? Are you prohibited from seeing a doctor outiside of inner London?

Yes that definitely sounds about right. :)

Very true. But the cost of living is much cheaper (comparative to where Google/FB are HQ'd).

You also have to take into account things like quality of life in the city vs a long commute if living in the suburb.

Right. But a country as a whole is what I am interested in.

I mean iphone costs about the same anywhere in the world ( okay it's sometimes more usually not less (Brazil?)) so there's that...

iPhone-like items are a very small part of anyone's annual budget. What matters are housing costs, transport costs, healthcare costs and quality of life. All of which are highly variable depending on location.

The iPhone itself may be a small part (depending on your budget) but wireless plan costs also vary widely. I know that UK/EU plans are substantially cheaper than the US where many pay $150+ per month for a couple lines.

Wireless prices in the USA are higher than any other country I've been to, developed or not. Nevermind the absurd contracts.

In Taiwan, for example, I got a 3G phone plan for $40 month-to-month, unlimited data, and consistently ~20mbps download speeds.

In developing countries like Thailand or Central America, I can get a 3G card for 60 days and 1-2GB for less than $10. Speeds obviously aren't as good as Taiwan, but the basic access to Internet is way cheaper.

LOL come to Canada. Our wireless prices are 4x worse than USA

You can't do that really. Taking the UK, the cost of living in London is absolutely incomparable to say, Sheffield.[0]

[0]http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...

I don't think electronic gadgets are a good item for this comparison.

You might want to take a look at the Big Mac Index, which tries to give some measurement of how much your money is worth in another currency or country.

You're not wrong, but tax is certainly one of the easier first steps as part of trying to compare salaries.

Right, but easier doesn't mean useful. E.g. One of the easiest steps in comparing salaries across countries is exchange rate, but it's not nearly as useful as a list of local prices for commonly needed stuff. E.g. In Singapore when I last visited (quite a while back) car registration cost about $30,000 per year.

And things like quality of life in the suburb vs the polluted air and noisy bright nights if living in the city.

It's will be almost impossible to compare at that level since there are so many contributing factors that affects much one gets taxed. How much does the employee contribute to 401K, does he have dependents, medical claims?

Reply on news.ycombinator.com