Means at the moment until salaries get inflation adjusted that we pay a premium price for everything.
I’ve literally never used my health insurance. I expect the vast majority of people are in the same boat.
I never used medical care in my 20s. In my 30s, my wife and I needed a bit. In my 40s, slightly more.
On average Americans use a lot of health care.
For example, people I was paying $190k in the USA were making around $110 in Europe and this was well before parity - $1.25 per euro, etc.
It’s probably around 50% of an Americans salary today or there about.
Then many states do not have income taxes, Washington, Nevada, Florida and Texas for example.
Sales tax is also not that high, topping around 10% for the most expensive of cities, but as low as 5%.
Then on income tax, we have very favorable tax brackets that allow us to reduce our tax liabilities. Someone making 250K w/ an LLC can easily drop their bracket to as low as 13%.
As an American, we have pros. You being an European, you have pros - but if you're experienced in the game and have time - there is a reason why USA can have very favorable tax, income
Now if you talk about your public transit, rails and trains - yes I'll concede and say that is much much ahead of USA. :)
Bit of an unusual thing to include weekends to make 20 actual vacation days sound 40% better than it is.
Edit: to be clear, in my experience, when someone in Europe says “4 weeks holiday” they mean 28 actual vacation days, not including weekend days.
VAT is broadly much higher than sales tax, property taxes are not exactly unknown in Europe, and if you are an employed professional, your health insurance burden is typically pretty close to zero.
If you live in a no-income-tax state like Washington or Texas, and you are single making $200,000 a year, your effective (not marginal) tax rate, including FICA, is around 26%. I doubt that anywhere in Europe comes close.
The flip side is that poor people in America absolutely get shafted.
The 26% figure above does include the FICA payroll tax.
Will richer EU country and US companies pay you better than your local wage bracket in the EU? How do you find that? This sounds like the best of both worlds. I'm guessing its tricky?
Of course. Competition to find better remote talent.
> How do you find that? This sounds like the best of both worlds. I'm guessing its tricky?
You have less bargaining power because you are competing in a bigger pool of remote workers. There is a little problem with timezones. But you can get $100K+. If you're good and got connections you can get SF/NY wage wherever you are.
I know those are difficult questions to answer but I want to put themnout there
I simply only apply to jobs where I work on my timezone. We have some meetings that end at 6PM locally.
> 2) tax: should I take my earning into a personal account in the US/EU?
Depends on your residency. And depends on the law of the country you end up residing in.
> Or alternatively start a corp and do corp to corp without and only pay myself minimum amount? 3) tax: do I pay taxes in the US and in the EU? Do they go after my US corporate?
You'll maybe need a VISA on the new country were you reside. Easiest would be a working visa. The country may have an agreement with USA where they run a sql-query to find tax-evaders and join it with a table of residents.
You might be found out. The USA may come after you for taxes on revenue of I believe +$150K/year. The USA has some fancy global taxation.
As a US citizen, you still have to file taxes. But can save a bunch depending on your situation.
I'm curious are you an EU citizen already? If not I believe you would need a US company that has an EU entity which could supply you with Blue Card in order to work in the EU.
I would guess my effective tax rate including sales and local and healthcare and everything else is ~40%
Being able to save 50% of your income is a level of privilege many don't have regardless of effective tax rates.
- Working professionals making low 6 figures (espicially in states with income taxes) pay much closer to EU taxes than most people think.
- Non professional jobs (service industry and blue-collar) are taxed very lightly, but have worse benefits, less job protection, and an extremely limited social safety net.
- Government jobs have better benefits than other non-professional jobs, but often the pay is not great (I suspect no better than EU, but honestly have no clue what e.g. a postal worker in the EU makes).
- The very wealthy are taxed very lightly compared to the EU.
Not sure what you mean by the last point, though, it kind of conflicts with your first point. And in e.g. France the capital gains rate is 19% I believe vs 20% in the US. Various countries in Europe have experimented with a wealth tax, but they've now all gotten rid of it. In what ways are the very wealthy taxed heavier in the EU?
> the main gap is just that for working-aged people there is no universal healthcare in the US
What about those who have health insurance but have huge medical bills?
Most upper middle class jobs offer different plans with different maximums and monthly payments.
No way. It's almost impossible to become homeless in Sweden while you have the entire homeless villages everywhere. People with disability get paid a living income and are allowed to save money, which they aren't in the US. Then we have tons of other services like child care, health care and universally just way better everything regarding infrastructure and social service. I've lived half my life in each place and honestly the difference is Grand Canyon sized. Even Portugal, one of the poorest still has great free healthcare and all kinds of social safety net sand services.
You might get two or three days or something like that, and then everyone pats themselves on the back saying how progressive we are.
It's absolutely horrific when you consider people may have medical issues which cause them to need to take a bit more time off.
But guess what, you now have insane medical bills, and pressure to get back to work. It's not unheard of for a woman to just get fired if she takes off too much time for a pregnancy.
Sure, that's illegal, but workers are treated so horribly in America. You're lucky to get your paycheck half the time.
For Sweden it's close to 100%.
https://www.bbc.com/worklife/article/20210624-why-doesnt-the...
https://en.m.wikipedia.org/wiki/List_of_countries_by_homeles...
edit: Digging into the sources, the US has 6.4 unsheltered homeless per 10k, but Sweden doesn't even track unsheltered homeless, the most acute category (at 4.5/10k) also contains people in immediate access shelter/hospice.
I think a more general statement could be made. It's nearly useless to make comparisons between countries. The United States cannot adopt Swedish policies and expect to achieve Swedish outcomes. I'd much prefer we discuss policies for our countries in our own contexts rather than introducing comparisons between them.
The parent comment introduced a comparison, though. So, I think it's only fair to introduce some form of statistics.
Thanks for providing a more founded empirical interpretation of the facts! It seems Sweden has some edge on the USA, but the original claim (that it's almost impossible to be homeless in Sweden) still seems as unfounded as I expected.
As another commentator noted, I think climate is something to consider. I expect that you'll find higher concentrations of shelter-less people in more temperate (or at least warm) places. Cultures will evolve to prevent people from needlessly dying, but we aren't inclined to give more than the bare minimum.
And this isn't what anyone seriously proposing for the US to take control of its social issues to do. The mention of other countries usually is just to show it can be done, to be inspired by it and forge your own way to solve social issues.
I don't know why it's usually taken in this absolutist view, where solutions should be implemented as-is because it worked somewhere else. It worked, get inspired by it and figure a way out of the hole in your own local environment...
Yeah, Sweden and the US are different, people are still people and have some overlapping needs, learn how others have done instead of this hubris of "we're different". Everyone is.
GP probably meant it's almost impossible to become homeless in Sweden because of a lack of a social safety net alone.
And one bit of Swedish society that is a bit invisible to the outside: it has an extremely draconian approach to drug abuse. Even though it's a Nordic country and touted for being socially progressive, drug policy here is extremely regressive when compared to Portugal or the Netherlands.
So usually the homeless I see in Stockholm are addicts (alcohol, heroin, amphetamines) that fall through the cracks of the system as they won't stop abusing substances which Swedish policies have no way around to help them, it's extremely punitive for drug use, as even use is a criminal offence. In the case you are taken in custody by the police they may force a drug test and if detected you'll be punished.
This all compounds to leave a marginalised population that has inadequate support to fight their addictions (usually caused by mental health issues) and kept in limbo between the streets and courts to be ordered to get clean.
Sweden: 36 homeless + 7 incarcerated per 10k
U.S.: 17 homeless + 64 incarcerated per 10k
All that list means is the US vastly under-counts actual homeless people. This is the same well known effect we see in suicide statistics: Sweden just keeps far more accurate statistics.
For example, I used someone in New Jersey (a US state known to be high-tax) vs France at a salary of 100K (which is the same in Euros now!): In NJ, including Federal, state and sales taxes, total tax is $27K. That seems to be a far cry from the $41K (sorry, Euro) I get in France from a very basic calculator that only includes country-level taxes AFAICT.
At that level you will pay 800€ per month for public health insurance (it's a percentage up to about 65K income, then capped). Public health insurance allows you to cover children and non-working spouses for free.
If you are curious about US insurance plans, here is California website for estimating insurance costs. Basically the costs scale with income, number of individuals and their age and their desired level of coverage.
For comparison, Germany is at 51%, UK at 50%, Netherlands at 47%.
Belgium is close to France at about 61%...
The US (not in Europe, obviously) is at 46%.
And Switzerland at 36%; this is the European outlier in the opposite direction from France.
But a priori, just from this data I would expect French taxes to be about 1.4x US taxes and Dutch taxes to be similar to US ones...
For example, in Estonia the minimum you have to pay per month just to health insurance is 201.20 EUR and this barely covers anything except extreme injuries, so on top you add a private insurance :|
You can very much opt out from the "public system" in Germany. I'm privately insured.
Although I pay most of my urgent stuff in cash, and get it back later (not everything), because otherwise I have to wait 3 months + for a simple scan :/
Like Public health insurance being mandated, or the GIS.
That is a system I want to live in. Since the locust capitalists took over (11th January 1987!) it is going downhill though.
Of course I can afford one of best health care, for me, but I want a social system, not an asocial one.
I think that the downwards movement is more based in the population aging though.
And the reason I hate it, is literally because there is no opt out at all. Hell, I'd use the public option if there were an opt out because it works well enough for me.
Leading my own company I hate having to pay the Wirtschaftskammer a mandatory fee.
I don't need those lobbyists!
Yeah, from what I've read, they are pretty awful in terms of costs/benefits.
I am curious about the 300-500. If this is per house hold or per employed adult.
Estonia seems like a tax haven in comparison.
- the state & local taxes (can be as high as 12-15%)
- social security (6.2%, tapers off after 150k)
- medicare (2% generally)
- net investment income tax (3.8%)
- different tax treatments of short and long term capital gains
Sure, if you just look at the federal rate, the US tax rate does seem a lot lower...
VAT are generally higher in Europe though. Even in the "high sales tax" areas in the US, you'd typically get ~10% compared with 22% in Europe.
Why "have to"? Because it's by law forbidden to bully employees into taking money instead of going on vacation. To never have to deal with this, most employers are very strict wrt vacation days :)
Health insurance (for dumb, path dependent, historical reasons) for individuals and their families are not taxable, haven't been since WW2.
What you may have seen is the AMA line item that just tells you how much your employer spent on your healthcare. This is a weird attempt to get people to realize how much their employers are paying (much more than the premiums people generally think of as covering their health insurance).
If your employer happened to pay you more than the maximum allowable cost per employee, then your employer had to pay a 40% excise tax on the amount above the limit, but even then, it wouldn't be taxable to you. The roll out of this tax was delayed several times, it may have been repealed, I wasn't paying attention during the pandemic.
20% (assuming that's what it is) is still no small amount but I'm personally doubtful there would be some sort of sea change in what's possible if it were cut in half or even eliminated.
We can’t even afford what we’ve got now.
The tax brackets in the US tend to be much progressive though, so for people earning lower salaries their taxes in the US are much lower.
At $600k, it's 37% effective tax rate (again, with zero deductions).
You have to make $817k, with zero deductions, before you'll pay 40% effective tax rate in California.
None of this includes sales tax, which is 10-11% depending on municipality in California. Europe's lowest VAT is 17% in Luxembourg.
It is not my impression that "a lot of people" in tech are making that much, even by the extreme standards of the Bay Area these days.
So yeah it's not the majority of people in the Bay Area paying 40% but if both spouses are working at big tech companies and they're more than a few years into their career then they will likely be somewhere in this range and paying close to 40%
A single earner (again, with the unusual state of no deductions) has to make $690k to reach 40%.
For a dual-high-income earner households I concede 40% effective isn't going to be uncommon.
A tech worker in Silicon Valley will easily hit >40% income tax (30+ federal, 10 Cali). Sales tax is up to 10%. Many places have affordable property tax due to American laws on home ownership. California may be a state with laws closer to Europe than many other American states (eg texas). Massachusetts/New England generally have “better” laws too (eg MA has stronger healthcare protections than most states).
Not sure what ordinary Europeans actual pay, but an internet search says German taxes go up to 40s, which seems pretty inline with Cali.
Obviously a tech worker in SV will be top few % for American salaries, but you need to be a well paid urban worker in America to be able to get healthcare and an income that affords college for children and good public transit and other things Europeans get from their governments.
Using https://www.arbeitnow.com/tools/salary-calculator/germany and https://smartasset.com/taxes/income-taxes#9jiRJIN31w
In Berlin, 200k nets you 113k after taxes
In California, 200k nets 132k after taxes
That is 43.5% vs 33%
But there are differences in sales taxes/VAT, property taxes (and deductions for such), mortgage interest deduction, etc.
A $1M mortgage loan at 3% could reduce your taxable income by 30k, saving you almost 10k in taxes per year in the US.
The calculator I used also included payments for social security and medicare contributions, which you would use if you eventually fell below security security income bracket (knock on wood) or if you need medical as a senior (I believe age 65+)
For other health coverage, that is paid for by the employer so also wouldn't come out of your compensation.
Which is fine if you're comparing equivalent "headline" numbers. But for other purposes the ratio of take-home pay to what the employer has to pay out (so including all the employer-side taxes) might be more relevant in terms of determining your likelihood of receiving a certain level of take-home pay.
And yet incomes are much higher in the US than in Germany.
I think headline numbers are the only useful thing to compare here.
Which leaves base pay, I assume the 200k in Berlin were choosen to make the comparison easier. On the surface, lower base pay in Berlin is offset by lower living costs, especially housing (I am aware Berlin is getting more expensive, it is still far from SV so).
Just shows that money isn't everything.
As for health and unemployment insurance, both of those are paid for by the employer in the US.
And now that buys less and less.
We can't afford to be playing world police or pretend to be the world's refuge.
In developed countries, the majority of the costs for goods and services (and taxes) come from labor, which means they're not affected by currency fluctuations too much.
Not a good time to vacation to the US, nor is it a good deal for Americans working in the EU and paid in Euros who need to pay past bills back in the US
This isn't true. A certain well-known politician made this claim, but it turns out she counted everyone who had medical debt when they declared personal bankruptcy as a "bankruptcy caused by medical debt." If someone gambled away their home and incidentally had an unpaid doctor's bill, it's a stretch to call that a medical bankruptcy.
https://www.theatlantic.com/business/archive/2009/06/why-eli...