[mixedCase]

On the other hand, at least when it comes to software developers, americans seem to be extremely well paid compared to the rest of us and they pay far less in tax.

I'd make that trade any day, but then again that's just one industry and I'm just one person.

[coldtea]

>I'd make that trade any day

It's not a trade, it's just a temporary result of a market imbalance. When that stops to be case, programmers will get the same bad treatment like everybody else.

So I'd make rather live in a country with more sane and fair laws for all, and not extrapolate too much from what a specific field or two (even if it happens to be mine) might temporarily command.

[jhall1468]

> It's not a trade, it's just a temporary result of a market imbalance.

That temporary result has been going on for a few decades now. And it's only getting better for the engineers, because more and more tech companies need more and more employees and for the most part, CS degrees still remain difficult to get (relative to some other degrees).

So I agree it's temporary, however it will probably last until after my retirement short of another .com bubble.

[acdha]

It depends on how old you are but I'd be careful assuming that things will last that long unless you're in your 50s now. There's a huge IT community which was employed to do commodity tasks (helpdesk, networking, PC management, etc.) or working on enterprise software which is increasingly outsourced, competing with cloud offerings, etc. anywhere companies see it as a high cost, low strategic value area – which is not an uncommon attitude even where that's not true.

Software developers at the top end are better positioned than many for that but even if your job isn't directly exposed that's going to contribute to pressure against wage increases and respect, especially since senior management is going to keep seeing comparatively high labor costs.

[jhall1468]

I'm a frontend engineer for the one of the big 4 tech companies, so I'm not really concerned. I'm in my 30's now, and don't expect to be coding for the rest of my life, but is the field going to become so constricted that 30 years from now wages will stagnate? I doubt it, at least not in the grand scheme of things.

At the end of the day, I'm not going to plan my life around my job suddenly becoming less valuable.

[sedachv]

> That temporary result has been going on for a few decades now.

That really was not the case before the Netscape IPO or for about 5-6 years after the dot-com bust.

[jhall1468]

People were still making great money, just not the ones that lost their jobs.

[brazzledazzle]

It's been some time since I ran the numbers but when you isolate federal taxes and compare them the difference is stark. But when you combine all of our income taxes and compare the percentage the difference is much, much less significant. Federal, social security, state, state disability, etc. It does depend on the state though. If you add in health insurance costs since those are covered by the government in other countries the difference shrinks even more.

When you combine it all and compare the amount of benefits and safety nets provided to other countries it kind of feels like you're being screwed. I guess getting paid more is nicer but raising children here and realizing that they may not make nearly as much money while having such small or irrelevant safety nets is a sobering experience.

[emodendroket]

Well they have to pay for all that military equipment somehow.

[exelius]

So my total tax rate in the US is just shy of 50%. Software developers are actually in the "sweet spot" for paying a ton in taxes: they make enough money to qualify for the high tax rates, but not enough money to make it worth exploiting the loopholes that rich folks use to avoid paying taxes.

[jhall1468]

What's your effective income tax rate (both state and federal)? Assuming your an average paid software engineer in SV, you have a marginal income tax rate of 28% (33% over $198k). Which means your effective tax rate is actually a lot lower than that. Assuming you are in California your marginal income tax rate is between 37% and 43%.

So I call bullshit. Marginal income tax rates are always higher than effective income tax rates. The only way you are paying a 50% tax rate is if you pretend ALL of your income is taxed at the 43% I mentioned AND you count FICA as a tax.

[lovich]

There are certain deductions that go away as your income goes up which is effectively an increase in tax rate as well. Student loan deductions for instance are 2500 I believe, but start going down after you break 80k. Then there's things like the social security payments which stop at 127,200 in 2017 so every dollar after that has a lower tax rate. It's very complicated but the last time I did taxes I paid north of 40% effective

[jhall1468]

> It's very complicated but the last time I did taxes I paid north of 40% effective

It's not that complicated. In order for you to have a 40% effective tax rate (including Federal, State, Local and FICA), assuming you ONLY took the standard deduction and you file single, you'd need an income of just over $450,000/year.

https://smartasset.com/taxes/income-taxes#VL01ZILZtI

That assumes you have 1 exception, no deductions for retirement (which would actually reduce your effective rate) and only taking the standard deduction (you can't get lower!)

In fact, if you want to tax EVERY POSSIBLE tax into account (sales, property, fuel, etc), you'd need to make $300,000/year to achieve a 40% effective tax rate across all taxes.

So either you make a mountain of money, you have a terrible accountant, or you are lying.

[thanksgiving]

Unpopular opinion, I know but I think we should try to get rid of as many credits and deductions as possible.

Every time someone take about simplifying the tax code, I bring it up. It will hurt me as well (I'm poor) but it is ok.

If you're in the tax bracket to pay 40%, I'd say I want to raise your taxes you pay but I also want to raise the taxes your overlords pay.

I want higher taxes so we can offer the same services to the wealthy that we offer to the poor. It is the right thing to do. We don't have too many wealthy people in this country. We should be able to include everyone. Can't afford to include people who make too much money? Too bad. The program can't exist.

I would want to create a consensus towards "no income checks". The government should not have any program that qualifies people based on income or assets. Be it Medicare, social security, or Medicaid, food stamps, college tuition, rent subsidies, school lunch or whatever. You should not be able to exclude anyone because they make too much money or have too much money.

Of course, economists will say this is stupid and inefficient and irrational but I say economists are not even people. Nobody is rational in the real world.

[lovich]

I'm not sure how unpopular that is unless you are one of the vested interests behind some of these deductions. The cost of enforcing these regulations seems to grow exponentially as the number of regulations grow. Many proponents of UBI, such as myself, want there to be zero means testing as it would save a significant amount of cost vs all of the current regulation behind things like welfare, unemployment, Medicare, etc.

[exelius]

If you're in a marriage with two high earners (lets say > $500k household gross) then most of your income is being taxed at the highest (or close to highest) marginal rate. You also don't qualify for a bunch of deductions (student loan tax breaks are only for people under a certain income, you can only deduct medical expenses over 10% of household gross, etc). You also don't always get to claim the full amount of your deduction from local/state taxes thanks to the way AMT is calculated.

If you earn much more than that, generally companies find other ways to pay you (equity, deferred compensation, etc.) that have more administrative overhead, but less of a tax hit.

And yes, FICA is definitely a tax. A regressive one since the rate goes down the higher your income is, but it's still a tax.

[jhall1468]

> If you're in a marriage with two high earners (lets say > $500k household gross

Well yes, if you are in the top 1% of wage earners in the US your effective tax rate is going to be pretty high. In fact, you'll pay around $200,000 in taxes on that, give or take (if you live in a high-tax state like California). But that's literally affecting 1% of the population, and they're probably doing ok.

> If you earn much more than that, generally companies find other ways to pay you

Most companies give equity in the form of RSU's rather than options, so income taxes hit immediately upon vesting.

> And yes, FICA is definitely a tax.

Yes they are a payroll tax, but just "adding" them into your income taxes is extremely misleading. Income tax is just that. FICA is a payroll tax.

[dragonwriter]

> If you're in a marriage with two high earners (lets say > $500k household gross) then most of your income is being taxed at the highest (or close to highest) marginal rate.

Incorrect.

The highest marginal rate kicks in, for married-filing-jointly, at just over $470K; the next highest at over $416K. You have to making close to $1M in taxable income for a married couple to be paying the top marginal rate on most of their income, and over $800K to paying at least the second-highest marginal rate on most of your income.

At $500K, you're just barely paying at least the third highest marginal rate on half your income.

[erikpukinskis]

> Software developers are actually in the "sweet spot" for paying a ton in taxes

That is as it should be. Is there something wrong? The only problem is that people above you are able to weasel out of their taxes, but the fact that you're in the top bracket means you're rich, you made it. Congratulations! Enjoy the high quality meats! Consider lobbying your Senator to close the loopholes.

[willyt]

Someone earning £80k ($100k) per year in the UK will pay about 30%[0] tax this is inclusive of income tax, local property tax and National Insurance ( mandatory insurance which covers healthcare, basic sickness and retirement benefits ).

If you are paying 50% tax, then you are being ripped off by your country because you are not gaining anything in exchange for paying all that money AND giving up all those protections.

We have those protections in the UK and they are similar across all of the EU. The highest rate of tax in the UK is 45% and you only pay that on anything you earn over something like £150k ($200k) per year. You have to pay ~2% to national insurance as well, but this is much much cheaper than private healthcare in the US. Local tax is pegged to the value of the house you live in and is typically between £0.8 and £1.5k ($1k-$2k) per year.

[0] http://www.moneysavingexpert.com/tax-calculator/

[vsl]

Don't forget to include VAT at around 20% on everything you buy. That's the genius of VAT compared to US sales tax: even smart people don't see it.

Close-to-50% total taxation is unfortunately pretty common in the West welfare states and yes, you're not getting your taxes worth.

[bildung]

You're right, but keep in mind that VAT is really only paid on things you buy for private consumtion, e.g. not on rent, medical insurance, pension plans, mortgages, not on your office etc. In the income brackets we talk about, at most 20% of income is taxed with VAT making the effective VAT tax rate 20%x20% or about 4%.

> and yes, you're not getting your taxes worth.

Thats debatable :) The US has a live expentancy as low as Cuba, very high crime rates, very high violent crime rates, low trust in society, massive homelessness, bad schools (but good top universities), bad care for the mentally ill, horrendous working conditions, ...

As far as quality of live per GDP per capita goes, the US is among the least efficient of all industrialized countries. Just think about the fact that Cuba manages to archieve the same live expectancy as the US with 1/6 of the GDP per capita of the US!

[smsm42]

Total tax rate of 50%? This sounds extremely high. Are you sure you are not confusing between marginal and total tax rate? If you prepare you taxes with any software package, it usually tells your effective tax rate, does it really say 50% or near that? I checked back and they year I paid the most taxes I had effective rate of 24%, usually it's even less. I know software devs who make way more than me, but I don't see how even that would take them to 50%.

[emodendroket]

Well obviously the best position to be in is to be making your money primarily through capital gains.

[da02]

Which country are you in? (The taxes vary depending on the U.S. state.)