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Very true. There is a legal standard for "gross" pay which is not gross pay at all. In Northern countries gross pay is ~20-35% lower than the employer pays, and after that the employee also pays 40-55% on the "gross" amount after that. (Example "non-gross" income tax: patronal national insurance tax, corporation closure insurance tax, tax on vacation pay, tax for employment of permanently disabled persons, ... It totals ~18% in Germany, up to 38.5% in Belgium, depending on the sector (specific sectors have specific taxes - yes really)) These sorts of measures make sure that taxation is a lot less visible for "normal" people (ie. voters) in Europe than it is in America. Employers have to advertise "net pay", which is the amount you generally negotiate for. Also, for instance, the prices displayed in stores have to be tax-inclusive (there's a VAT of 18-25% as well), the prices displayed at the pump include all taxes (not just VAT), tobacco and alcohol have to be advertised with prices including all taxes. That means a European kid might very well not hear the word "tax" until they're 24-25 and get a real, first job, and will likely think they're only paying an income tax of 40-55%, when in fact they are paying a tax of 1/1.200.60.82 = 61% (and up to 76%) (money that they can spend divided by money that is paid for their labour, inverted). And that still doesn't include property tax, car tax, and the like. |