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Comment by joshuaheard | Hacker News Reader

You pay higher taxes in Australia which probably offsets the cost of the "free" health insurance you receive.

Isn't the cost of healthcare (whoever ends up paying for it, whether it's tax, national insurance, medical aid, self pay) is cheaper in any country compared to the US?

Yes. It's what I call the "corporate tax" in the States, and here I'm not referring to the taxes corporations pay. I'm referring to the non-tax tax imposed on citizens of the United States which are effectively taxes, but which are paid to private companies, e.g. private health insurance costs. If you factor in all kinds of these infrastructure costs which are dumped on people in with actual gummint taxes, you'll see that living in the States is a hell of a lot more expensive than people want you to believe.

Yes. Americans pay the most of any first world country, with worse outcomes. [1] [2] [3]

[1] http://www.slate.com/articles/health_and_science/new_scienti...

[2] http://www.pbs.org/newshour/rundown/health-costs-how-the-us-...

[3] http://www.cnbc.com/2015/10/08/us-health-care-spending-is-hi...

It sure is! The US even outmatches Switzerland, the most crazy-expensive country in Europe![1] We're #1! Go America!

[1] Well, ok, maybe Luxembourg or Monaco are more crazy-expensive, but those are freak countries.

Australians pay a 2% payroll tax to fund Medicare (which provides universal coverage). I'm betting you (or your employer) pay more than 2% for health insurance...

Here's a good primer on Australia's healthcare system:

https://www.youtube.com/watch?v=ylsO0VVy29U

The Medicare levy in Australia is effectively an extra 2% income tax. Of course that levy doesn't cover all the costs of the public health system; the vast majority of the rest of the cost comes from state budgets which is largely funded by GST (VAT or sales tax as it called in other places).

Somewhere around 20% of the cost (the total cost, not just the cost leftover after the levy) is covered by fees paid for services.

The taxes are not higher than CA or NY or similar states. Why do Americans think their taxes are low? You also pay a shitload of property tax in most states of the US.

Oh, bonus, if you're not employed you still get to receive medical care!

And most Australians carry private cover anyways. It's better, easier to use and still so much cheaper than US insurance.

Regardless of funding source, the US spends dramatically more per capita on healthcare than the rest of the developed world.

Australian healthcare costs half of what American healthcare does - $4,420/person in 2015 versus $9,451 in the US. Given that we don't see substantially better outcomes for that doubling of costs, we're getting absolutely hosed.

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

Someone living in California making $100k pays:

Federal income tax: $18,047 State income tax: $6,288 Payroll tax: $7,650 Total tax: $31,985

Someone living in Australia making $100k pays:

Income tax: $24,632 Medicare levy: $2,000 Medicare levy surcharge (?): $1,000 Total tax: $27,632

Unless I've missed a tax (I looked at payroll tax rates too but it looks like those are only paid by the employer?), it seems like the Australian actually pays less tax unless you live in the US in an income tax-free state. But then once you add in the cost of health care, Australia ends up cheaper again...

Are there no provincial or city income taxes?

It's the CA income tax that distorts the comparison. Had you chosen TX or WA (for example), they are lower than Australia.

There are no state or municipal income taxes on individuals. The major state taxes are on property conveyance, payroll, automobiles, gambling.

Note that a direct comparison by salary at $100k is potentially misleading due to exchange rates, differences in wage distribution, cost of living &c.

I think it's better interpreted as comparing effective tax rates, i.e. 27.6% vs 31.9% of gross income. You're right that the salaries not directly comparable for the reasons you listed, but it's also pretty clear that they're not that far apart. Certainly not enough to conclude that Australians are "paying higher taxes to offset the cost of health care". By examining the numbers it's pretty clear that we're paying more for health care in the US and getting less for it.

As far as I can tell, there's no state income tax in Australia. Not sure about city taxes.

I did mention that even if you live in a tax-free state in the US, the tax savings is essentially wiped out by having to pay for your own health care. Especially if you have a spouse and kids, between monthly health care premiums and deductibles that's probably another $10-$15k out of pocket, if not more.

Edit: Just ran a family of 4 (30 year old parents, 5 year old kids) through an ACA calculator. A silver plan runs around $800/month, with a total out-of-pocket max of $14,300. So, up to $25k/year in extra health care costs. It's absurd.

> Are there no provincial or city income taxes?

no. there are "rates" paid to city/town for garbage collection, etc, but that would be on the order of $2000 more, for home owners only, for the nicest parts of cities.

The VAT in Australia is 10% while the average sales tax in the US is 5%, so that's an extra $5,000 in your example. Also, the payroll tax is over 5%, no matter who pays it (taxes are paid by people, not "employers"), so that's another $2,000. So Australians pay roughly 10% more in taxes.

If you're going to count the employer side of the payroll tax, you have to do so for the US too. Total payroll tax in the US is 15.3% (of which the employee pays half and the employer pays half). So go ahead and double that payroll tax to $15,300.

VAT is based on spending, so you can't assume that $5k is actually being spent on VAT. Besides, many cities in the US tack on their own sales tax and it gets close to 10% anyway (Seattle is 9.6%, Los Angeles is 9.5%, San Francisco is 8.75%)

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