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Comment by alberto-m | Hacker News Reader

More precisely, given a salary of 85'000€, about 17'500 (20.5%) goes into income tax and about 16'800 (19.7%) goes into social contributions, though one can reduce the latter by taking a private health insurance*. The remaining 60% (Nettolohn) can be used to purchase things, usually paying 19% of VAT on them (though rent is exempt and food has a lower tax).

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.

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I think you should also mention the ~17k Euro social contributions that your employer pays on top, which could otherwise be part of your salary. Then it is actually pretty much 50%

Correct: if one takes as basis not the Bruttolohn but the total cost for the company, the sum of taxes and mandatory social contribution can very well reach the half of the income. The method of splitting employer-side and employee-side deductions seems just there to hide this fact.

Most taxes are deducted when money is transferred between two parties. The view that one party pays it all (Brutto-Netto and VAT) seems wrong to me.

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.

There are two terms in German salary:

"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

To be fair this is the case in the US, too. Your employer has to pay a bunch of taxes on your behalf.

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.

> Even in "low tax" states like Texas. And even more so when you consider "unofficial" taxes.

"Low tax" states just shift their tax base from income to something else - usually property or energy.

US also has federal employer-paid payroll taxes the employee usually doesn't see or think about.

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.

A US employer also generally provides health insurance and retirement, of which they pay a large piece.

> A US employer also generally provides health insurance and retirement, of which they pay a large piece.

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.

For a role like that, they'd likely cover a decent chunk of the premium cost. Its not always the full cost though, FWIW. People earning such a wage paying for the rest of their family often still spend hundreds of dollars a month for their premiums, along with also needing to stash a few hundred dollars a month towards healthcare savings whether in an HSA or an FSA.

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.

US employer health care is typically ~65% employer paid, 35% employee paid. https://www.bls.gov/news.release/ebs2.t04.htm

Don’t forget the mandatory radio broadcast fee every household has to pay even if you don’t read or watch any of those propaganda channels

And if we are comparing USA vs Germany, taxes to gas (car fuel) which is much more expensive in the EU, because of taxes.

Is there any news source you wouldn't call propaganda?

Not really, there are certain very well researched and written articles which present the facts as they are and letting the audience to use their own judgment and form an opinion in few news outlets. But most of the time every news outlet is just pushing their own political, cultural or doomsday agenda.

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)

I watched the first minutes of the video, but the narration is pretty cringe, I couldn't bear it. It didn't say anything about subtle propaganda, seemed to be mostly Schadenfreude.

the key criticism seems to be that they interviewed people on the street that turned out to be either known political activists or their own employees or contractors. in other words instead of asking random people they picked people they knew.

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.

Check the timestamp from 4:00-5:10 and 5:50-6:30. One would actually think that those were just random people on the street and their opinion, but they were strategically placed insiders.

The solution to this is making sure to watch news from opposing viewpoints, not avoiding news though.

Same in Denmark, and it really boils my piss. DR (Danmarks Radio) is 80% trash. If I was dictator in Denmark I would abolish it on the spot. I won't deny that DR produces things that are not trash or only mildly trash, but I have no interest in it. People who want it can fund it themselves. State financed reality TV is an abomination.

It doesn't seem to be the same then as in Germany. German public broadcast is arguably fine, when compared to private TV and radio broadcasters, many private newspapers and probably all social media platforms.

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.

i agree that the private TV is no better, and the public TV has some good stuff. but what confuses me every time is that the law in germany expressly forbids the public funding of printed newspapers because it could be used as a propaganda tool but the same law does allow the funding of radio and TV and internet publications (the last is now really weird of you consider that printed newspapers are now online too)

But a state financed news outlet is no better, because it invariably ends up being government propaganda, since that's the hand that feeds it.

There is no perfect world, and so it isn't perfect, but the separation between financing and content selection is there.

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.

Thank you.

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?

>One of the most regressive precepts of the German system.

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.

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