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Comment by Reubend | Hacker News Reader

That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates).

My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the same price, and missing out on most of the benefits. I don't think this is a good situation, and I don't think it's sustainable.

Taxes in the USA have a lot of loopholes for the ultra-wealthy and for large corporations. However, there's not much that "normal" salary earning employees can do to escape these high rates. This ends up putting a lot more pressure on workers to contribute economically, which seems misguided since the corporations could haul their weight more here.

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European marginal tax rates that high kick in at a way lower income, resulting in a far higher tax burden on the middle class.

France is 41% at 78k EUR. UK is 40% at 37k GBP, Netherlands is 50% at 73k EUR.

Then add on top the VAT which is high teens.

You’d need to earn over $200,000 to get to a >40% marginal rate in CA, with the standard deduction and SALT it’s probably closer to $300,000.

Europe taxes the middle class at those higher rates to raise enough income for all those social programs. You couldn’t fund those sort of social programs in CA relying solely on taxes the top 5%

That's incorrect for the UK, though the gov page is confusingly worded. The basic rate is applied to £37,700 of income but you have to add the tax allowance of £12,570 onto that, so the 40% rate kicks in at £50,270.

Edit: plus it's not exactly the UK since Scotland has different tax rates and services but I think it's confusing enough already.

to summarise this - in practice, a person earning £50,270 under 1257L is paying 24% of their income as tax. Ever £1 they earn above this value is taxed at 40% up to £125k (although there are also some losses of benefits at £100k)

A decade or so ago I read an article titled something like "If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets".

My tin foil hat theory as to why I can't find it is because it was removed in hopes of preventing those riots.

It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.

But Americans do not pay the same tax as Europeans. As some others already noted, the high brackets in Europe kick in at much lower incomes (usually around 70k-80k or so). In addition, VAT (sales/consumption tax) ranges from 19%-25%.

Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes.

Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).

As a young person it may be trivial but health related bankruptcy in the US tells another story overall

EU health care is horrible - absolutely horrendous. It's very difficult for a young, working individual to get quality health care in a reasonable time - actually, almost impossible. I would definitely rather take the US health care situation over EU health care. Doctors are muchmore competant in the US, and they are much more likely to go out of their way to help you. One reason surely because EU doctors are unbelievably overwhelmed, working in health care in the EU must be really really horrible.

In my opinion, if the EU social benefits are even a little bit better than in the US, it's definitely because of other factors, not at all because of health care.

That’s an odd choice because the US lags Europe in life expectancy, except for in states like CA, which as we’re discussing has just as high a cost but with increased uncertainty.

It's a minor difference (3 years), there are a lot of other reasons that can contribute to difference in life expectancy than health care. Europe is very much, you know, don't do anything, sit at a home all days. Americans are more likely to live their life and get out - which comes with obvious danger, but at least Americans might experience life!

How much is a year of your life worth? A few thousand in taxes a year? The US left expectancy has also been going down even after the worse of Covid while the EU is returning to a slow upward trend.

It’s also that if you lose you’re job you immediately have to think about where you are going to get your healthcare from and changing a lot of paperwork or even providers.

The point is that you can't draw conclusions of quality of health care simply based of one statistic. There so many other reasons to cause difference in life expectancy.

> The US left expectancy has also been going down even after the worse of Covid while the EU is returning to a slow upward trend.

This is complete meaningless non-sense. You can't draw trends from this. And it's not relevant to the discussion anyways!

> It’s also that if you lose you’re job you immediately have to think about where you are going to get your healthcare from and changing a lot of paperwork or even providers.

You think you have lots of paperwork in the US?? Come to Europe man.

Obesity rate in the US is double the EU's. There's no way to overcome that.

That's based on our life habits, not on health care. That's crazy talk.

Right, our life expectancy is shorter because of life choices, so it can't tell us anything about healthcare quality.

Lack of accessible healthcare and medical bankruptcy as one of the primary drivers of financial failure and old age poverty is not life choices.

Gun death as a leading cause of youth deaths is not life choices.

PFAS exposure is not life choices.

A medical system that allows advertisement and more or less open bribery leading to an opioid crisis that’s killing enough people to bring down life expectancy across the midwest is not life choices.

Ineffective pandemic management by the government is not a life choice.

Obesity is a boogeyman, but it has been around for long enough that the recent significant drops in life expectancy cannot be blamed on it. And even obesity is likely not a pure life choice, food quality and regulation of food supply play a vital role.

I always found it amusing that we pump estrogen / hormone affecting chemicals into things and then give people a hard time if they have gender identity challenges and call it a life choice despite all the science to the contrary.

Life choices are a catch all diversion, a fairy tale people tell themselves to feel like they have power to avoid the horror.

Many of these are actually life choices. American addiction to guns tells us nothing about healthcare quality. Either way, I'm not saying our healthcare quality is better than other countries, I'm just saying you can't say it's worse by just looking at life expectancy because of confounders.

Your perspective depends on your income, obviously. If you are a truly middle class income (say $70K which is median household income in US), the benefits you get are HUGE relative to the taxes you pay. Not to include the insecurity of being one health event away from bankruptcy...

Total disagree. See my comment up above (1). Health care is horrible in the EU. At least in America you can choose to go bankrupt in exchange for quality health care treatment. In the EU, if you ever even get Doctor time, it's always rushed, and very often misdiagnosed. This is coming from an American living in Germany.

(1) https://news.ycombinator.com/item?id=37809938.

This sentence is... wow. "At least in America you can choose to go bankrupt in exchange for quality health care treatment."

I'm so glad the founding fathers protected my right to bankrupt myself at the hands of an incredibly profitable healthcare industry. Stupid Euros don't know what they're missing.

Yeah, but at least you can get quality health care in America. That hardly exists in Europe. Free "health" care to shit doesn't do much good.

I have hard to seeing why you think you're worthy of incurring unending health cares expenses on a human health care system that by nature is not unending. If we are human and therefore our system can only by provide limited health care, then consequently you either go bankrupt at some point or you don't get health care. America chooses the former, EU chooses the latter.

And yet European health outcomes are significantly better than American ones across the board.

So what’s missing?

And if you think America doctors are not rushed and often misdiagnose stuff then you’ve probably not been to an American medical facility in quite some time.

> And if you think America doctors are not rushed and often misdiagnose stuff then you’ve probably not been to an American medical facility in quite some time.

Oh, trust me, I'm sure they are, but it's even worse in Europe.

> And yet European health outcomes are significantly better than American ones across the board.

What on earth are you basing this off of?

It is actually a lot closer than you think if you add up all the different taxes for each country.

It's actually a greater difference. VAT in the EU is 21% on average. Gasoline taxes are more than double.

The easiest way to see the difference is tax revenue as a percentage of GDP. France is 46%, Germany 37%, UK 33%.

The US is 27%.

That is federal. Add in states and cities and US government revenue is more than 40% of GDP [1].

When you consider actual dollars, not % gdp, Americans pay MORE in actual dollars than many European countries.

https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%...

France gdp/capita is around 43,658.98 USD. 47% is $20.5k/capita.

US gdp/capita is around 66,000 USD. 40% tax revenue is $26.5k/capita.

The US government brings in 30% more tax revenue per resident than the French government.

The differences in social benefits between France and the US are not due to lower taxes in the US. They are due to inefficient spending and systemic economic differences.

I have no idea where you data comes from, but the OECD tax data (the one I quoted) includes all levels of government, property taxes and sales tax/VAT.

"This indicator relates to government as a whole (all government levels) and is measured in percentage both of GDP and of total taxation."

https://data.oecd.org/tax/tax-revenue.htm

The OECD data has the US at 34% and France at 45%.

And the idea that "the US pays more taxes doesn't even pass the sniff test. You only need to look at income tax rates, VAT, etc and anyone can tell that's not true at all.

Even using your numbers from OECD, US taxes revenues per capita are still higher than France in real dollars ($22k vs 20k)! The US Government doesn't have a revenue problem, it has an efficiency and cost control problem.

For example, The US government healthcare spending per capita is 2.5X (250%) that of France- ($10.5K vs $4K per person), and France gets a universal national health insurance for that price, and the US gets medicare and medicaid. [1,2] Yes- you read that right, and it is still true if you adjust for PPP.

The same phenomenon holds true across almost every aspect of US government spending.

Look at infrastructure. The cost to build subways and light rail in the US is 2-7 times higher than in Europe. [3]

Look at defense. US spends ~300% as much as France, which is actually higher than most western European countries.[4]

From a purely numerical sense, the US can't overcome an efficiency problem by raising taxes and throwing more money at it.

1 https://stats.oecd.org/Index.aspx?DataSetCode=SHA

2 https://www.cms.gov/data-research/statistics-trends-and-repo....

3 https://www.nextbigfuture.com/2018/01/subways-and-light-rail....

4 https://en.wikipedia.org/wiki/List_of_countries_by_military_....

No, you're completely ignoring the facts that @refurb is stating. The US govt is also extremely inefficient, true, but taxes in the US are far less than in Europe, on average.

I simply dont think that is true on a factual basis. The US taxes as a % of GDP is a few percent behind Europe, but GDP is higher in the US.

The US government pulls in more dollars of revenue per resident than most European countries.

the OECD data refub provided matches up with my claim. Do you have other data?

You can validate this with the opposite approach. Looking at government spending [1] The US government spends 31.5k per person. Germany spends 31.8k per person and France spends 32.3k per person. Deficit spending is a few percent higher in the US, but pretty similar. Switzerland, Ireland, and the UK are all in the mid 20's.

The idea that the US governments is underfunded or that taxes are vastly lower are pervasive myths.

It is based on a bait and switch looking at %GDP instead of dollars paid to the government, as if the cost of government services like roads or insulin are naturally proportional to GDP.

The entire concept of higher GDP implies you should be able to have more purchasing power, goods, and services with higher GDP.

Ok, but my had nothing to do with all that, just that the tax burden as a percentage of income is much lower in the US than many European countries.

I never said anything about how the money is used.

Yes, and I'm saying that the US tax "burden" as a percent of GDP is a misleading way of looking at it.

When it comes to real people and real "burden", what matters how much you have to hand over, and how hard you have to work for it. In this context, Americans pay more than most Europeans to their governments, and work far more hours.

This relates to upthread discussion:

>"If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets"... It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.

And of the responses claiming that Americans pay less, and generally implying that Americans have it easy with respect to taxes.

In this context, Americans pay more than most Europeans to their governments, and work far more hours.

I disagree. Americans work more hours (not a lot more, but more) and make more money per hour and overall.

So when they have to hand over money for taxes, they hand over much less, as a percentage of hours worked. So they end up keeping more in the end.

That sounds like a lower tax burden to me.

And the upthread comment just isn’t true. Americans pay less tax overall and spend fewer work hours paying that tax. So of course they don’t get the same benefits as Europeans. That’s the trade off.

If Americans had to pay European tax rates they’d see a huge increase in tax burden., even the middle class. We’re talking a 50% increase in taxes. That’s very significant.

So if you asked Americans “do you want European level of benefits?” almost all would say yes. If you asked them if they wanted to pay much higher tax rates in exchange? A lot would say “no”.

Exactly, very well answered. UK might be higher now that they recently (this year) raised their corporate tax rate by 7%!

And certainly this doesn't include the inflation tax either. Governments spend like crazy. No wonder we're not living sustainably! It starts from the top down! That's not corporations, it's the governments!

Worth pointing out that lots of Europe doesn't really have property taxes, something that is common in the US.

Germany has property tax.

Really? To the best of my knowledge all the EU members have property taxes.

relatively few Californians pay rates that high, one has to be at >$1m/yr to max out the CA marginal rates.

Americans don’t pay the same tax as most Europeans. It’s far lower.

> Californians at the high end are paying almost the same price, and missing out on most of the benefits.

The context behind this statement is that Californians at the high end are also making over $650k/year. That said, I agree with your general point about generally insufficient healthcare and increasing taxes on corporations.

Highest marginal in the UK is technically 47%, but for certain bands and life situations it can be as high as 80% (loss of certain benefits phased in at certain income thresholds)

Can you provide an example of this for an employee of a company? I can't figure out a way of making that the case - even inside the "60%" (in relative terms) band - at £125k your actual tax burden is 36% (44% incl. employer contributions)

at least in europe the taxes go to something beneficial like college and healthcare for everyone. in CA it just goes to feed bums and beaurecrats.

Thats what he was saying…

It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates).

This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note that in all cases, I am excluding payroll taxes like US SSI or French CSG).

(or very cheap) healthcare, cheap university education, and a strong social welfare net

The Europeans paying the same marginal rates as their extremely wealthy Californian counterparts generally do not qualify for most of this benefits of the strong social welfare net, and for the most part have chosen to have the bulk of their medical treatment in the U.S., paying out-of-pocket even though they could get the same treatment locally for free or very cheaply.

Do you have a citation for the idea that wealthy Europeans are getting the bulk of their treatment in the US? I can't say I've ever come across that idea at all.

I've heard of people paying for private medical care, to supplement their free healthcare, but not traveling to the US for it.

European Health and Dental Tourism is Korea and BKK these days, nobody in their right mind would go US unless it’s a very specialized condition.

Yeah, that sounds like a very strange claim. There are some very decent/expensive private hospitals in Germany, Switzerland and I assume elsewhere..

They do qualify if they suddenly become poor, which is the point of the safety net.

> $350k… extremely wealthy

In many parts of California this is someone who can buy a just okay house with a long mortgage. Have we redefined the word wealthy?

350k is 99th percentile in terms of income, so I'm not the one redfining "wealthy".

If you can't afford a nice house with 350k/year, move a mile or two away from your upper class enclave to the middle class neighborhood and live like a king. (Per Nerdwallet, 350k/year is enough to qualify for a mortgage for a $1.35 million property with 20% down. I live in a nice part of LA and places here cost significantly less than 1.35 million.)

It's not. 350k is 3% for the entire USA [1]. For somewhere like California if your _household_ isn't making $1M you're not 1% [2]. Even in the poorest state (West Virginia) if you lived alone then you're not even a 1%-er.

People really do think of themselves as at the top when they're not. You're very good but not the top.

[1]: https://en.wikipedia.org/wiki/Income_in_the_United_States

[2]: https://www.visualcapitalist.com/mapped-the-top-1-percent-in...

> someone who can buy a just okay house with a long mortgage.

Look up housing prices in some major European cities (generally way less affordable that in most of the US if adjusted by income).

In London, Paris or Munich prices are about as bad as in SF or NY yet median income is considerably lower (also good luck getting a fixed 30 year mortgage, so there is also considerably more risk even if you can afford it)

> suddenly become poor

If you earn over €350k per year you really have to make some very poor financial decisions for that to happen. Besides from changing illnesses/accidents etc. but you would still most likely end up in a much better position financially if you saved that extra 10% you pay in taxes or went with a private insurance option.

Of course healthcare is probably a different matter.

> and for the most part have chosen to have the bulk of their medical treatment in the U.S.

Citation? Because that is very rare, even for the very rich.

This is generally true, except that it’s not necessary to travel to the US. You can see a local private doctor or dentist (often accredited by a US university, using US developed medical technology) locally.

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