That is a misguided simplification. Please correct this, before anyone starts to believe it for real.
If you have a different idea, feel free to break the 90k down yourself. Don't lazily push the work on other people, asking them to puzzle together where some neglected Wikipedia articles' table of magic numbers actually comes from. Hint: It's a number made up by an interest group called the "German Taxpayers Federation", representing mostly entrepreneurs and wealthy taxpayers. The number being opaque is intentional, because its purpose is to mislead and support their advocacy for tax cuts.
But by all means, don't let me stand in the way of your right to blindly believe whatever someone else wants you to. God forbid we input a five digit number into a calculator.
What will it take? A notarially certified copy of tax returns mailed to your address?
[0] First Google result: https://www.brutto-netto-rechner.info/gehalt/gross_net_calcu...
Edit: I was curious what the answer might be and couldn't find much. One source calculates the tax burden to be about 53% of income.
The link you provided is the web page of the interest group I mentioned. They will literally try any trick in the book to get that number up, including adding a bunch of things that aren't even taxes, a boatload of things they call "quasi-taxes" with numbers presumably pulled from their ass, and adding expenses your employer incurs only to subtract them again immediately. Anything to get that percentage number up.
But even they don't even call the resulting number "tax burden" - that'd be transparently stupid. They more generally call it a "burden ratio" (Belastungsquote).
Just to give you an idea of how ridiculous their calculations are: If my wages are 90k in Germany, they do their calculations as if I earned ~105k just so they can immediately subtract the entire 15k again and call it a burden (for expenses my employer pays on my behalf). Does this still sound like something you can easily compare one country to the next and draw useful conclusions from? Of course not. In the next country it might come from an interest group with a different goal, a government calculation, or a Fox News writer.
> You have to add in all the other taxes as well. For example VAT, gasoline, and property taxes are significant. That's generally what tax freedom day is meant to mean - when an average citizen is done paying all taxes.
What you're trying to get at - hopefully because the alternative is a nonsense number with no purpose other than being a fun fact supporting a discussion about degrees of individual autonomy in modern societies - is called discretionary income, and it's only meaningful when adjusted for cost of living and compared across similar living situations.
Aren't you talking about social contributions that your employer is forced by law to pay on your behalf? You realize that if this was not in place, those money would go directly to you since your salary is whole sum your employer is paying towards your employment? Doesn't seem you grok it fully from your words.
I am not claiming if its good or bad (dramatic global financial changes will test viability of all these systems rather well in upcoming years, I'd expect many people will be unhappy when their naive views hit reality of numbers). I am outside of such system, in mostly private social system in Switzerland (aka I save for myself, mostly) and wouldn't want it any other way.
In any case, the resulting individual "burden" is meaningless if you don't also quantify individual benefit. As an extreme example, imagine a country in which your income taxes pay for things such as transportation credits usable on gas, public transport and roads, while the neighboring country has mostly private toll roads and low taxes. Another example is health insurance. In Germany it is pretty nearly mandatory with most having some form of insurance, and total spending per citizen is around $9,000. In the US more than 90% are insured and spending is higher, but within the same ballpark.
What does the raw tax/burden tell you here in an international comparison? Fuck all. It's at best usable as a prompt for a philosophical discussion about autonomy, but often merely used for masturbation or making dishonest arguments designed to go over well in establishments specializing in alcoholic beverages - like those of a certain interest group.
Obviously yes, and obviously no. Just as we don't add the price of groceries or rent to wages unless the employer subsidizes those in which case obviously yes we must.
> What does the raw tax/burden tell you here in an international comparison?
It tells you how expensive it is to live there, relatively speaking. Obviously (as you note) that's only half of the discussion just as an expensive appliance might or might not be worth the premium to any particular individual. But you're wrong to dismiss it out of hand as you do. Just as it's disingenuous to dismiss the benefits of (for example) universal healthcare it is also disingenuous to attempt to derail discussion that focuses directly on total cost or effective tax burden or what have you.
What you are dismissing as a "nonsense number" of an "interest group" I would consider one of the most accurate and easily understood quantifications of total cost.
It's meaningless to say "Germans pay X, Americans pay Y" if the two receive completely different benefits in exchange for those rates.
Furthermore, the point that the German system would be paying to individuals if not to the government is somewhat disingenuous. There are a few options.
1. The government doesn't do it, so private options do at some cost
2. There's some government-private hybrid
3. It's not done at all
I'm not sure what point you were trying to make with parental leave as an example. I completely agree with what you wrote but don't see it being at odds with anything said previously.
I think we all know that Germans enjoy substantially more free at point of service public services than those in the US let alone those living in a developing country. Obviously that costs something. Yet when someone brings up the price tag you get a bunch of partisan screeching about how prices are meaningless.
Prices _aren't_ meaningless. The US military (for example) is absurdly expensive. There are lots of things received as a result of that expenditure. Regardless, the relative cost is high and that's not meaningless to point out given that everyone involved in the discussion has at least some conception that there are important differences in the downstream impact.
Nobody said its going to be trivial to calculate, reality doesn't care about that.
Yes the exact cost will differ depending on what you buy but that doesn't remove the cost, it just obscures it - which is the point of having so many different taxes.
Tax-Free Allowance (Grundfreibetrag): The first 12,348 you earn is completely tax-free.
Progressive Zone: Income between 12,349 and 69,878 is taxed at a smoothly increasing marginal rate from 14% to 42%.
Top Tax Rate (Spitzensteuersatz): Income from 69,879 to 277,825 is taxed at a flat 42%.
Wealth Tax (Reichensteuer): Income above 277,825 is taxed at 45%.
On top of income tax, mandatory social security contributions will consume roughly 20% to 21% of your gross salary (capped at specific income ceilings):
Pension Insurance: 9.3%
Public Health Insurance: ~8.2% to 8.75% (depending on your provider's supplemental rate)
Unemployment Insurance: 1.3%
Long-Term Care Insurance: 2.3% to 2.9% (includes a 0.6% surcharge if you are over age 23 and childless)
To see how these deductions interact, here is an estimate for a single individual (Tax Class I) living in Frankfurt, earning a gross salary of €60,000 per year without church tax:
Category Annual Amount Percentage of Gross
Gross Salary 60,000 100%
Pension Insurance (9.3%) -5,580 9.3%
Health Insurance (~8.75%) -5,250 8.8%
Unemployment Insurance (1.3%) -780 1.3%
Long-Term Care Insurance -1,440 2.4%
Income Tax -8,786 14.6%
Net Take-Home Pay 38,164 ~63.6%
So, “half goes away in taxes” is an exaggeration, but I can totally sympathize with the feeling. Especially since the quality of healthcare is declining and the pay-as-you-go pension system is only built to benefit the current generation of pensioners.
* note that, if one is earning less than 77'000€ today or less than 84'150€ in 2027, one is prohibited to switch to a private insurance. One of the most regressive precepts of the German system.
I anyway doubt that the wages would be at the same standard if there wouldn't be any deductions (from the beginning). Wages in expensive cities are higher because the cost of living must be matched. Similarly salary negotiations account for deductions. Nobody wants a job that doesn't pay the bills.
"visible" and "invisble" Brutto. The one is without "contributions from employer", which is a lie anyway since an employer makes a total comp perspective and he for sure includes his "contribution" into that
For a $110k salary the federal employer paid payroll taxes would be almost $8,500, or ~7.69%. They would also pay some amount to unemployment insurance, but that rate depends a lot state by state.
I realize that's less than the Euro taxes, just wanted to share so everyone is aware of these often forgotten US taxes when compared.
I do agree though, such a thing should also be considered when thinking about total cost of the compensation. Things definitely start getting a bit fuzzier though. You then also get stuff like HSA matching, 401k matching, etc.
Health insurance yes, retirement… no, not really. They may offer a 401k plan and some might even offer a match, but most companies offer at most a 4% salary match (dollar for dollar, or sometimes 50c per dollar).
So, it’s a vehicle to invest retirement funds with some tax advantages, but it’s not really “providing” it like you would subsidized healthcare.
People think the US has a low tax burden, it does not. Even in "low tax" states like Texas. And even more so when you consider "unofficial" taxes.
My health insurance surely costs my employer ~1500 dollars a month. That's quite a big chunk of paycheck that I don't get to see. But that's how it works in the US. And that's just my employers part. I, of course, have a deductible, copays, premiums and all.
"Low tax" states just shift their tax base from income to something else - usually property or energy.
I don't know how bad it is in Denmark, but keep in mind that journalism that is not subject to profit seeking and independent on whatever billionaire owns the outlet, is not only valuable because you personally consume it, but also because it shapes the public discourse and thus indirectly may have influence on political decisions.
IMO it doesn't need to be perfectly neutral and independent to be valuable for the population and the democracy. I'd love for it to be without the flaws the system has, I just think it is hard to install the perfect system, given the incentives of the involved decision-makers.
The German public broadcasters, especially the Tagesschau, are the worst. Also this is a really good video that explains how crazily the public broadcasters are creating the propaganda in a subtle manner to push their own agenda rather than being neutral. (https://www.youtube.com/watch?v=46MP_G8CKFA)
one criticism i didn't get towards the end is that one particular politician would always give the same response to the same question. that confused me because why wouldn't she? why is that poor? doesn't make any sense to me. but that's unrelated to the criticism of the TV reporting.
If you mean the existence of two-tier private/public insurance, yes. The two-tier system was abolished in most of Europe for good reason. Either they abolished substitutive private insurance, restricted it, or transformed private insurers into regulated providers of universal basic coverage, e.g. very recently in the Netherlands.
I think it is important to be (at least a bit) precise in this debate.
I dislike the wording "social contribution", as these are (mandatory) insurances that benefit the insured person in case of sickness, retirement, loss of employment, etc. Discussion about the cost efficiency and fairness of the system are warranted, of course. Anyway, the current generation of retirees benefit greatly from it, so for them at least it was worth paying.
Since you are accounting all those taxes, including the VAT on the citizen's side, companies only pay the Arbeitgeberanteil (you didn't mention) and the taxes on profit?
They benefit some insured persons. If everyone benefited equally insurance would not be needed as you could just take the money and pay the doctor directly. But even the expected benefit if you average out unpredictable health issues is far from equal as what you pay doesn't depend on your risk factors. That's what makes it a social contribution. And since you are forced to pay it it's a tax.
> Anyway, the current generation of retirees benefit greatly from it, so for them at least it was worth paying.
You mean the last generation of retirees. The current generatin of "retirees" is forced to slave away the remainder of their lives in the super market checkout and other demeaning jobs. Absolutely despicable outcome considering how much money the state sucks up.
Government spending as a % of GDP in Germany is exactly 50%. So definitionally half of all money goes to taxes.
Are you counting in VAT on everything OP spends that money on? Are you counting capital gains taxes OP pays when investing that money? Are you counting the taxes paid by the employer for his role (which defacto come out of his pay, just before he gets it)? The property taxes he pays to live?
The employer doesn’t look at the employees salary as the only cost. Employers look at things rationally, using the all-in cost to employ someone (the combined total of all salary and government mandated taxes and benefits contributions). In many European countries this is 2X the persons salary or more.
Other governments including US also pays a lot for these.
> public transport
Which is so famously reliable that Switzerland no longer allows their trains on their tracks to avoid messing up their schedule as well. And of course its run as private companies so execs can pocket large portions of those state subsidies.
> cultural events
No thanks, I don't want my government deciding what culture should be supported.
I interact with a lot of engineers moving from Europe and US and it’s never how US politics portray it. German friends talk about paying for private insurance because the public one is so bad.
So yes, Americans love consuming healthcare. Is there any category they aren’t a high consumer of? You can’t measure efficiency only looking at the input side.
As a consequence, insurance companies generally try to sign up mixed-pool, younger, healthier (read: employee plans) over older, sicker, opt-in insurance (read: ACA).
There are ways they can and can't legally do that, but it's always the goal. In the same way that retail order flow is targeted by HFTs.
Urgent care clinics have been big in our region. The primary system is obviously overloaded, and 2 of these have popped up in the last 3 years. It's more expensive per visit than our primary physician, but cheaper than an ER visit, which could easily take half a day anyways.
I don’t have metrics for good/bad. I’m just going off of them telling me it’s bad.
The US government funds most of the resident slots through which the path to become a doctor runs.
The AMA generally (but not always) lobbies against increasing slots too much, reasoning it would decrease the premium doctors (its members) could charge.
As a result, most of the time the US has too low of a supply of doctors, especially in general, highly-demanded areas (family medicine, internal medicine, psychiatry).
Private insurance sucks ass in the US, period. It's just bad, which makes sense because all the insurers are completely uncontested. You don't even get to choose your policy, your employer does.