What are the tax rates in both?
I estimate my CH tax averages to 20 percent my gross income, which is pathetically low by European standards, and before any of my fellow U.S. countrymen balk at this, consider that we have a working and efficient society here. It is mostly free market with some degree of state-run business. Where the state runs something, it runs it typically better than the private or public sector does in the U.S. All of this is to say, comparing taxes between the two is apples and oranges.
Another consideration: there are stupid voters here like anywhere else; but after they burn their hands on the metaphorical stove once, they recognize their mistakes and attempt to correct. I would give this country a higher social durability rating than any part of the United States. Not having the whole mythology of predestined preeminice shoved down their throats helps.
Last I checked when living in the U.S., my average tax was about 30-something percent when combining federal and state.
CH also has a yearly tax of wealth (property, stock, bank assets, etc.), but it is effectively so miniscule that it remains unnoticed for ordinary people. For me, it would be 0.1 percent on total wealth per annum.
Tax rate is orthogonal to the effectiveness of society, governance, and civil society. A starve-the-beast mentality injures all three of these. Sorry. I hate to put it so bluntly and bust anyone's bubble. You get what you believe in and pay for.
CH:
- 8 million people
- 41’285 km2
- $700 billion GDP
- 25% foreigners (Zürich exceeds 30%)
- Powerful Local Governments (26 Kantone - each managing local immigration quotas)
- Minor Ocean Access (Rhein port in Basel; they have a large merchant marine)
- Majority of residents are renters — independent of wealth.
S.F. Bay Area:
- 8 million people
- 7,384 Km2
- $780 billion GDP
- 37% foreigners
- Powerful Local Governments (NIMBY)
- Major Ocean Access
- Majority of residents are renters — independent of wealth.
Try overlaying CH onto the Bay Area. It's pretty shocking: http://overlapmaps.com/index.php
I lived in S.F. before moving to CH. I always keep the magnitude of these similarities in mind when reflecting on the lost opportunities and potential within the Bay Area. From an efficacy and infrastructure capitalization perspective, they are light years apart (Spoiler alert: CH is in better shape).
Why would a fellow US countrymen balk at this? Aren't taxes there much higher? You have a federal tax, a state tax and sometimes a local city tax, closer to the 30% you mentioned.
Its interesting to me that tax rates are a function of the canton, is there no federal tax then?
Do you wind up paying net 20% in taxes then after the partial credit or is the 20% just the Swiss part of your total tax obligations?
CH VAT on the other hand is high...it's not like Switzerland doesn't have taxes. They are just different.
But if you actually buy things, pay rent, etc...you will spend a lot more than in the states, so it's really a wash. And like I said, Swiss still have taxes, just not high income taxes...again, it's hard to compare.
Disclaimer: I lived in Lausanne, not Zurich, but I expect they are similar.
RE: federal tax — taxed on three levels federal, cantonal, and community. Each has its own scale. Too numerous to enumerate here.
RE: percentage and recipient state — Swiss is equitable. I pay that first. The U.S. fraction is a mess to calculate. I pay a differential of the two with some measure of tax credits and income exclusion, meaning hypothetically a remaining higher marginal percentage to the U.S. There are exclusions and credits, but they only go so far. Often they completely fail in localities where the nominal cost of living and pay is higher than the U.S. Think: Scandinavia and Switzerland. You don't get much sympathy arguing about this with countrymen, because the see the nominal amount and assume you live like a sheikh — until they visit and then comprehend that the economics are vastly different. Frankly it is very peeving since the United States' Revolutionary War motto was, "No Taxation without Representation." Sure we can vote from abroad, but no aspect of the U.S. political system acknowledges us or affords special treatment. Our votes are tied to this vague concept of last state of affiliation. God forbid someone lose a U.S. state driver license abroad and then have to reprove residence to that state for them to issue a new one. Happened to a friend here, and the process would have made Kafka blush. So the Swiss fraction is the base I always pay. I pay some amount extra to the U.S. At least CH has no capital gains taxes! This is one of the big reasons expats are very careful to follow the criteria each U.S. state has to avoid them claiming you were a tax resident and thus be subject to extra taxation without representation. Don't get this wrong. I believe in taxes and happily pay. I just want the society to have collective agreement that we will have successful governance and do something good. This whole half-assed approach the U.S. has been taking for decades makes me never want to return. I feel zero connection to the U.S. body politic. I regard it the same as a fuck up alcoholic relative whom the family has repeatedly helped but who always lets them down. Sorry. Among expats, this is very common theme.
Switzerland 33%
USA 37%
Switzerland 0.7%
USA 3.3%