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> In the US, someone earning $155,000 USD (Equivalent to 125 GBP) will also be paying 6.2% in social security taxes, 1.45% in medicare taxes, and then another 6.2% in social security taxes (employer’s portion), and 1.45% in medicare taxes (employer’s portion).

In the UK, there is also National Insurance tax on top of income tax, which works similarly (but is a bit more complicated.) The employer share is 13.8%, which is a hair below the combined employee + employer share US federal payroll tax.

And there is also a 20% VAT impacting the cost of pretty much anything you might use your after-tax income to buy.

> All-in-all, Americans pay ~26% of their GDP in taxes.

Close: 26.6% (2021, provisional), 25.8% (2020) [0]

> People in the UK pay… ~27% of their GDP in taxes.

Not so close: 33.5% (2021, provisional), 32.1% (2020) [0]

> ‘Americans pay less taxes’ is largely a meme with no basis in reality.

No, the UK has a much higher tax burden; the US is significantly below OECD average, the UK a bit above.

[0] https://www.oecd.org/tax/tax-policy/revenue-statistics-highl...

The overwhelming majority of a person's expenditures (Housing, education, medical, most of the food you buy at the grocery, many forms of transportation) are not covered by VAT. Many forms of energy (residential electricity, gas) are covered at a vastly reduced VAT.

And, again, the giant bugbear that is health insurance rears its ugly head on the US side. See the overall 'Taxes as a % of GDP' comparisons.

Edit: I stand corrected about taxes as % of GDP. You are right, that the UK is at 33.5%. [1] Unfortunately, again, that doesn't include the percentage of US spending on healthcare - which is 17.8% of its GDP, with much of it coming out of after-tax dollars, instead of pre-tax ones. (Medicaid and Medicare make up about a third of that - and are, obviously, financed by taxes.)

[1] https://www.oecd.org/tax/revenue-statistics-united-kingdom.p...

> And, again, the giant bugbear that is health insurance rears its ugly head on the US side

Sure, yes, that's a bigger non-tax expense for individuals in the US. The US having by far the least efficient healthcare system in the world is a huge problem.

> See the overall ‘Taxes as a % of GDP’ comparisons.

Yes, I’ve updated my post to address your wildly inaccurate “Taxes as a % of GDP” comparison, using the most recently published OECD data which shows that you were close for the US, and way low for the UK.

And I've updated my post to point out the mountain of US post-tax healthcare spending, that in the UK, largely comes out of pre-tax pounds.

At the end of the day, Americans still pay, and pay more. 26% in taxes, and then another ~11% in non-government-covered (non-Medicare/Medicaid) healthcare spending.

> At the end of the day, Americans still pay, and pay more

They pay less in taxes, by a wide margin.

They also get less for them, by a wide margin, particularly (but not exclusively) in healthcare.

I've been corrected (my initial data was wrong, I've updated my post), and I agree on both points.

I do, however, posit that when it comes to determining whether an economy/society/??? is healthy (which is the conversation in this sub-thread), we need to look at all of these 'costs of life/business'. So, yes, the sticker price on the UK looks rough, but add it all up... And it comes out to be pretty similar. As it turns out, providing similar forms of services costs... About the same, across the developed world.

Really? I have top of the line healthcare through my employer in the US, which also covers my wife and teenage daughters, which costs me essentially nothing. NHS in the UK is collapsing, but even if it didn't, qualitatively it's orders of magnitude worse than what one would receive in the US through one's employer:

Months to years for an appointment, incompetent doctors and a bureaucracy that puts Kafka to shame.

https://www.economist.com/britain/2022/04/30/the-nhs-is-in-s...

https://www.telegraph.co.uk/news/2023/01/02/collapse-nhs-tra...

Yes US healthcare has issues but it's nowhere near as bad as UK.

So you have an employer paying tens of thousands a year to get you health insurance, leading to a situation where only the most well off can have access to healthcare. The NHS is struggling because there's a shit load of people to treat with very little means. The US healthcare system is doing well because it leeches money off of the most well off and lets the poorest die.

The NHS is struggling because the Tory government is deliberately running it down. You didn’t see the many crises it faces under Labour.

Also yes, starving the beast is their favourite activity.

I think

https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...

combined with ever increasing inequality offers a much better explanation. Inequality is high in the US too but at least they have a lot of growth which means that the bottom 80% or so are at least not getting poorer.

And who's been in power since 2010 in the UK, overseeing all of the growing issues?

This has been the case throughout most Europe. UK seems to be below average though, then again nobody forced them to vote for Brexit…

> money off of the most well off and lets the poorest die.

A very significant proportion of US population is covered by Medicaid and if more if you add Medicare. In fact the US government spends almost 50% more on healthcare than Britain does (and that’s only public spending..). The problem is that the system is simply extremely inefficient.

Just look at Switzerland healthcare is privatized to a much higher degree than in the US yet still more accessible…

That may be the reality that some experience, I obviously couldn't say they are wrong.

But it isn't always the case. Where we live the NHS is excellent, appointments are fine, doctors are competent, and we've had no issues with bureaucracy. There is literally nothing I'd complain about, and we have double-digit interactions with the NHS each year.

The only fly in the ointment is the recent nurse strike happened on a day the wife was scheduled for some surgery, so that was cancelled. But I support them in that, and the rescheduled date is less than a month later.

There are issues everywhere, but there's no way I'd swap any of it for the US version. And always bear in mind that negative talk sells more papers/gets more eyeballs than positive.

> Really? I have top of the line healthcare through my employer in the US, which also covers my wife and teenage daughters, which costs me essentially nothing.

Very few people in the US have top of the line healthcare (hence, why its “top of the line” and not “typical”), and if you do it costs a lot per covered person, even if it is less visible because instead of a salary deduction instead a large chunk of money that the company is willing to pay for your labor just goes straight to an insurer without being part of your nominal pay.

(I, too, as I suspect is fairly common for HN readers given the demographic tendencies, have excellent healthcare in the US, abd most of the cost isn’t a salary deeuction, but the cost is nontrivial.)

> NHS in the UK is collapsing, but even if it didn't, qualitatively it's orders of magnitude worse than what one would receive in the US through one's employer:

Over 1/5th of US workers (not residents, people actually employed) aren’t eligible for any employer health insurance, and for many of the rest it is quite bad, with very high out of pocket costs if you actually need any non-preventice care. NHS may be worse than what you or I have through our employers, but “top of the line” isn’t the usual experience.

> Yes US healthcare has issues but it's nowhere near as bad as UK.

...if you are part of the relatively narrow elite in the US with top of the line coverage, and for that the US pays more than a time and a half what the UK does as a share of GDP, and more than double what the UK does per capita...while leaving over 12% of adults and 5% of children uninsured.

That’s a specific issue caused by the Tories deliberately running it down. Pre-2010, the situation was very different. You didn’t have things like the Annual Winter Crisis (which now extends through to autumn).

Luckily, Labour will win the next GE, so they can start to turn this around.

Pre 2010 (well pre 2008 to be fair) UK had a higher or similar per capita GDP as the US, now it’s not even close. If the current trend continues it will be almost double in a few years.. Other European countries have been doing a bit better but it has clearly been a ‘lost decade’ in most of Western Europe and you can’t really blame the tortes for that.

> Other European countries have been doing a bit better

The UK has had the worst pandemic recovery almost anywhere in the developed world. How many other countries have an annual "Winter Crisis" in their healthcare that's extending into autumn and summer?

The Tories have been in power since 2010. They're the common factor in the many issues the UK is currently facing.

Everything that happened since Brexit is a disaster and it’s mainly the fault of conservative party and their voters (also labor picking comrade Corbyn to be its leader meaning there weren’t really any reasonable alternatives..). Combine that with the overall trend of decline/stagnation across Western Europe and you’ve got something…

Look at Switzerland. Fully privatized (too a much higher degree that the US in fact) very high quality yet significantly cheaper (still much higher total spending than any other European country). Yet the US government alone (so excluding private spending) spends about the same on healthcare (as % of GDP) as Britain but without even basic universal coverage…

> And there is also a 20% VAT impacting the cost of pretty much anything you might use your after-tax income to

Except stuff like food, rent, utilities, small stuff like that.

I'll give you the rest though. The UK is a low-tax country by European standards, and even by developed-world standards, but is above the US quite significantly.

> The UK is a low-tax country by European standards, and even by developed-world standards,

The UK is a bit above average tax burden as share of GDP for the OECD. It is not particularly “low tax by developed world standards”.

The OECD includes countries like Mexico, Turkey, and Colombia that are definitely less developed than the rest of the list. Hell, looking at the IMF figures, half the European countries on that list count as "developing" too, especially the less-taxing ones. Don't think I agree with them, but I'm not an economist so hey.

> > ‘Americans pay less taxes’ is largely a meme with no basis in reality.

> No, the UK has a much higher tax burden; the US is significantly below OECD average, the UK a bit above.

> [0] https://www.oecd.org/tax/tax-policy/revenue-statistics-highl...

Rather than contradict the OP's statement, the above document reinforces it. The document only covers taxes identifies as "taxes", which makes the comparison with US apples to organges.

The two huge elephants in the room in the US are health care and higher education both of which are very high cost in the US and both of which have to be paid separately in the US. Whereas in most other countries these are either fully or partially funded by taxes.

For an apples-apples comparison of out of required pocket expenses in the US vs. other countries you need to include health care and education costs.

If we’re talking about the UK, college has got a lot more expensive there. Cost to run a university is getting more expensive everywhere, the Baumol effect doesn’t discriminate. Some countries subsidize more aggressively than others, but it’s getting harder.

Add pensions to that. Many countries have mandatory state run pension funds (for lack of a better translation, it's late at night here.) People can add their own private pension fund.

Pretending that the employer is paying taxes for the employees is doublespeak popularized by large companies to justify why they want to stop paying it.

It is not taxes. It's a contribution to a functioning society. Otherwise, employers would get access to employees with NHS without putting a penny in.

It is taxes. Taxes are a contribution to a functioning society, though! There's nothing wrong with them when they are used well!

> Otherwise, employers would get access to employees with NHS without putting a penny in.

It doesn't matter how you slice it, the penny still comes out of payroll. It makes zero difference to me if I get paid 50,000, and 10,000 of that goes to taxes, or if I get paid 40,000 and my employer pays 10,000 in taxes. But it sure causes a lot of spilled ink about whether or not its 'really a tax' and 'who pays'.

> It is not taxes. It's a contribution to a functioning society

That’s what taxes in general are, so the second half does not support the first.

> Otherwise, employers would get access to employees with NHS without putting a penny in.

The idea that payroll taxes are a fee that employers pay the State for “access” to workers and that this is a defense rather than a criticism of the scheme is... interesting.

Nope. Words have a meaning. Contributions are dedicated to a specific thing. Nobody can take the money of the Build-Hospitals contribution and use it to Build-Death-Star. Taxes however can go anywhere.

Once again, "payroll tax" is language invented by employers to make it feel like they're being unjustly taxed. Additionally, in the case of Europe, most of these contributions were set up after WW2 because employers were happy enough to collaborate with the occupiers and kept wanting cheap labour without participating in rebuilding nations. So, sorry, I won't cry about them having to pay their fair share.

A person living in NYC making $155k pays 34% effective tax rate. (Or in Seattle: 25%, Chicago: 30%.) This calculator is pretty good: https://smartasset.com/taxes/income-taxes#4RIGzkc2ey

I don’t understand your point about the employer portion — it doesn’t come out of your paycheck, so if you wanted to include it in this calculation, you’d have to say your gross salary was higher.

If I went one state over in any direction from Washington, could I pay an even lower effective tax rate?

I'm not sure where you're getting the $20,000/year healthcare spending number, but that looks like it is too high by an order of magnitude. See e.g. https://www.commonwealthfund.org/publications/issue-briefs/2..., which puts median annual household spending on healthcare between $1,500 and $5,540 in 2019. If you're talking about total annual healthcare spending, that is largely paid by employers so should be accounted for as increased gross earnings for employees, which translates to lower effective tax rates.

And yes, the effective federal rate is not the total blended rate paid in the US, but it's not in the UK, either. For example, far as I know, no US region has a sales tax close to the UK's 20% VAT - sales tax is set locally but in most places is around 5-10%.

This article is specifically limited to people with employer-sponsored healthcare plans. $20k is a reasonable estimate for a family trying to get decent health insurance independently.

You mentioned this earlier

> In the US, someone earning $155,000 USD...

Later you say

> $20k is a reasonable estimate for a family trying to get decent health insurance independently

So are we talking about people who have full time jobs and employee sponsored healthcare or are we talking about people getting health insurance independently?

> $20k is a reasonable estimate for a family trying to get decent health insurance independently.

That's on the low side. I'm currently taking a break between jobs and thus paying for health insurance out of pocket. For a family of 3 in California, I'm paying $42,000 annually.

Good employers usually pay 75% or more. My family health insurance costs $28500.

That median number also includes people without coverage or with Medicare and Medicaid, which aren’t accounted for that way.

>which puts median annual household spending on healthcare between $1,500 and $5,540 in 2019.

I'm guessing that doesn't include employer subsidies. I pay (as an individual) ~$940/month for health insurance, plus a $600 deductible and $40/visit copays for doctors, $150 copay for emergency room visits and $1000 copay for hospital admisisons.

Assuming I don't need an emergency room or a hospital admission, that's over $10,000/year just for healthcare.

> I'm not sure where you're getting the $20,000/year healthcare spending number, but that looks like it is too high by an order of magnitude.

Certainly not by an order of magnitude.

In the US if you are single and work for a well-funded company (e.g. FAANG types) they will probably cover 100% of the health care premiums monthly and your deductibles will be low, so a couple thousand out of pocket is realistic.

Any other scenario though, it's going to be much more. Very few companies cover all the health care costs for the family of the employee. I've paid anywhere between $1K/mo to $2K/mo for full-family coverage while employed, with the employer covering the rest (total cost is over 40K/yr).

> It does get you 11 carrier fleet strike groups, and 5,500 nuclear weapons, though.

Which protect the blanket of freedom under which the UK sleeps.

Other NATO members are really smug about all of this while not spending their 3% obligation on defense, essentially free riding on the US.

Although the UK is one of those countries that:

1. Consistently maintains a >2% of GDP military budget, and

2. Is capable of acting independently (albeit less effectively than part of NATO).

It's also one of those countries reasonably able to defend itself without the US.

huh? even the official UK Forces News youtube channel dedicated an entire episode to how hollowed out UK defense spending is at present

when Queen Liz set out to sea, half of the planes on her deck were F35s from (and staffed by) the US Marines...afaik the UK cannot provide full air wings for their own carriers

> All-in-all, Americans pay ~26% of their GDP in taxes.

It's more like 35%-36%.

The far more accurate picture is that the local + state + federal spending is going to be around $9.5 trillion in 2023. The IMF has the US at an estimated $26.8 trillion GDP for 2023. Beyond the federal government, the US has two other massive layers of government that spend well over $4 trillion each year.

I fully understand the difference between taxes and spending, and that spending comes out of your pocket either directly via taxes or via inevitable currency debasement (look at the enormous value loss in the dollar since the rampaging deficits & later debt monetization began after 9/11). The bill comes due, period.

No it really depends on the state. Washington would get me much closer to 25 percent. Plus as a tech worker you're making at least double what your counterpart in Europe is making (especially considering the insanity of taxes here) so you need to factor in a lot more variables than what I see most commenters doing for total take home.

>It does get you 11 carrier fleet strike groups, and 5,500 nuclear weapons, though.

The majority of government spending is on social services. Defense is usually under 20% of the budget.

These are 2022 numbers, so a bit out of whack from Covid-19, but they get the point across. https://fiscaldata.treasury.gov/americas-finance-guide/feder...

The problem in the U.S. is inefficiency. The U.S. spends more public money per capita on healthcare than most of its peers. Simply nationalizing the healthcare system would quite possibly lead to lower taxes, and would certainly lead to much lower healthcare spending. We know how to make a system that provides for everyone and we know it will save us money, but we can't do it because that would be SOCIALIST!!!

There's no need to slash the defense budget to make the U.S. government function better. All we need to do is jettison the ideologues deliberately sabotaging good government at every turn.

(I do support slashing defense budgets, but that has nothing to do with saving money. I'd support lighting the money on fire rather than spending it on "national security".)

Extremely disingenuous to include employer taxes in personal income taxes to make whatever point you're making. Might as well toss in the costs of accounting in there while you're at it.

Edit: I'm being throttled from posting but response below:

There are a lot of factors that go into deciding the gross pay that an employee receives. What you are doing is muddying the waters to make a point but it just makes it trickier to compare. If you are an employee that is deciding where to live and work, the specific employer taxes make no difference to you -- what matters is your net pay and the services you get for the taxes paid. The rest of the costs, including things like parental leave, time off, and healthcare have already played into deciding your wage.

I'm also not sure why you included health insurance costs for the US total but not the 12-14% regressive UK national insurance tax or the regressive 20% VAT for the UK total unless you're deliberately trying to argue in bad faith. I'm suggesting comparing apples to apples. There's enough to criticize as is.

It's disingenuous to not include it. It still comes out of your paycheck, just because it happens above the fold doesn't mean it's not a real tax burden, equivalent to the one that is listed below the fold.

Splitting it into an 'employer and employee' portion was just an accounting trick to get political buy-in for it. At the end of the day, it's still a regressive 15.3% tax rate that gets slapped onto your wages.