Federal income tax in France is greater than 45%[1]. There's nothing cheap about that. I much prefer the freedom of saving my own money, especially when working in something as lucrative as tech.
1.https://tradingeconomics.com/france/personal-income-tax-rate
13.3% of all income (State) +
39.6% of all income (Federal) +
5.3% of all income (Federal double tax on State Tax - thanks, Donny) +
6.2% of all income (Social Security - Individual)
=====
64.4%
Then of course your employer pays another 6.2% of gross earnings on your behalf for social security too. And of course, in tech, your employer has to pay for your healthcare too, an average of $19,616, which also actually comes out of your paycheck. [1] Feel free to work out what percentage of your gross earnings that amounts to and tack that on top also. Good thing we've got the freedom to save the remaining ~33% while people go without basic health cover and social services.
In years I earn a lot, I'd actually be better off in Canada.
[1] https://www.kff.org/health-costs/report/2018-employer-health...
A more realistic total combined tax for most people is well under 50%.
Most higher earners in e.g. tech or professions will be in the 40% band at least, where the true marginal rate is c.49% (40%+2%+13.8% / 113.8%).
The "top" marginal rate is c.53% (45% tax+2% employee NI+13.8% employer NI / 113.8%) although the highest marginal rate comes between £100k and c.£123k as the personal allowance (bottom 0% band) gets withdrawn making the effective rate (40%+50%x40%+2%+13.8% / 113.8%) = c.65%. (And at the very low end of the scale, as benefits get withdrawn the marginal combined rate of tax and benefit withdrawal is also extremely high).
We don't allow joint filing for married couples which is a significant benefit, especially for single earner couples with high earnings, in the USA.
Then we have mandatory minimum private pension contributions (given these all go into a defined contribution scheme, it's just pay by another name), the apprenticeship levy, etc etc.
Overall, I'd say the UK and "high-tax" parts of the USA (California, New York etc) are similarly taxed at least as far as income is concerned.
Do you think any employer in the uk would magically give you the 13.8 if employers ni went away.
And most STEM jobs including tech don't get into the higher band at 46,350 I think you ignored the tax free band.
After taxes, insurance and maxing out my 401k (i.e. all the stuff that comes out of my paycheck) I take home 56% on the East coast (in a high tax state no less). I also pay less sales tax and transportation costs than I would in CA and I can afford a house with less than six figures (gross) household income.
Edit, FYI: - 14% from 9 964 € to 27 519 € - 30% from 27 519 € to 73 779 € - 41% from 73 779 € to 156 244 € - 45% beyond 156 244 €
And the table here for the social contribution that are taken out of your pay before the taxes above are applied: https://fr.wikipedia.org/wiki/Cotisations_sociales_en_France...
- 23.5% for tax credit for other people (i.e. think about solar panels, etc.)
- 15.7% for primary/secondary education (i.e. from kindergarten to 12th)
- 13.6% for counties and other local / regional structures.
- 11.5% for interest on the debt.
- 9.35% for the Defense budget.
- 6.35% for Universities (education and research) => This is paying for ~ free education!! Probably the best deal in the French system compared to the USA.
- 5% for Europe
- 4.3% Police
- 1.9% Judiciary
Also the top marginal rate is 37%, not 39.5 (Thanks Donny.)
And SALT? Rather than “thanking” Donnie for the reduced deductibility, perhaps complain that they are so high as to exceed the allowable cap in the first place?
That being said, the reason France can offer robust services while California cannot, even though tech worker taxes are similar between the two countries, is because France taxes everyone that way. In France, the 41% tax bracket (just a little lower than the top bracket of 45%) kicks in at 71,000 Euros (about $80,000). The U.S. federal rate in that bracket is 25%. Then there is the 20% VAT paid by even the lowest income people.
France offers much more social security than whole US.
Medicare contributions have no cap, and are 1.45% by both the employer and employee and the 0.9% Obamacare surcharges on the employee only portion (until 2035) kicks in over $250,000 also. Therefore, social insurance contributes a marginal 3.79%
So, the numbers to the best of my knowledge should have been:
13.3% of all income (State) +
39.6% of all income (Federal, including the Donny double-tax) +
2.34% of all income (Medicare, Obamacare - Employee Contributions) +
1.45% of all income (Medicare - Employer Contributions)
=====
56.69%
Then you still have to deal with the fixed portions, the $19,616 [1] in healthcare premiums, the $7,347 you'd have paid in social security tax and the $7,347 your employer would have paid in social security tax. [2]
[1] https://www.kff.org/health-costs/report/2018-employer-health...
[2] https://www.bizfilings.com/toolkit/research-topics/managing-...
You pay 0% up to 9807€ of income. Anything above that and under 27086€ you pay 14% on it. Then between that and 72617€ you pay 30% on it. And then between that and 153783€ you pay 41% on it.
Finally, you pay 45% only if you make more than 153783€ per year and again, only on euros that you earn above this threshold.
As an associate professor early in my career my income tax amounts to around 12% of my salary I think.
If you want to account for everything that is removed from your salary between gross cost for the employer and your net after taxes, it will surely be between 50% and 60% in average. But then we can talk about the benefit of all this.
I don't know for you but I strongly prefer that and the ability for everyone to get an education, health, unemployment, retirement, infrastructures, etc. than doubling or even more my own salary. Viruses won't stop spreading if you have money. Health is a social and political issue, not a personal one. I like being able to drive everywhere and not just in cities where people are rich enough to pay for roads. I like that when a friend is fired from their job they can keep their appartement until they find a new job. I like teaching to everyone who wants to learn rather than to the children of people rich enough to pay for tuition fees. I like that my parents will get a retirement salary and won't be in my charge when I may also have kids to take care of.
Now of course our system is not perfect and I largely idealized it here. But it is far better than if everyone would get their gross salary, paid no taxes, and would be able to care only for themselves.
On the contrary, this matches what is "Income tax" in the US.
> If you want to account for everything that is removed from your salary between gross cost for the employer and your net after taxes, it will surely be between 50% and 60% in average. But then we can talk about the benefit of all this.
But that is the discussion, I don't think anyone considered that there are higher taxes in France without any benefit for it.
However, it is far from the whole story: when you get paid, the employer pays taxes, then the employees pays taxes, and only then, you have your income, which is taxed again.
In the end, you get around half of what your employer pays. It means the "more than 45%" is spot on. It works a bit differently for those who are self employed but the numbers are similar.
It is different for civil servants, and as an associate professor, you are probably one. They are taxed much less, which makes sense since they are paid with tax money.
How does saving your own money preclude you from thinking about others?
1. France is not a federal state.
2. Income tax doesn't pay (directly) for health insurance. Income tax also doesn't pay for social security. You're comparing apples to oranges.