[IBalic]

> A lot of people in the western world don’t realize how much taxes limit their options. You can end up paying almost half your income in taxes, which basically means you’re working for the government for 180 days a year. I think I can find better ways to use the money I make for the benefit of society.

ok, so he's basically suggesting to get of rid government. I respect different stands on the size/role of the government in society, but this is just a weak argument. What works out for him, won't work out for everybody.

[pavlov]

I don’t know where the author grew up, but didn’t he get anything in return for his taxes? I’ve had free healthcare, free college education, free libraries, police and fire departments protecting me, occasional grants, a social security network in case I lost my ability to work... I would never say that “taxes limit my options” because the personal record shows the opposite.

Besides, it’s not about just me: the whole point of taxes is that it gives options to everyone, not just those lucky enough to be born to wealthy parents.

I have a hard time believing that a messaging app founder would spend his money on charities more usefully than the government would spend it on basic services. (Assuming he would donate an amount anywhere close to the tax rate, which he certainly wouldn’t.)

[nickpp]

But wouldn't you have liked to shop around for those free-but-paid-from-your-taxes services? And benefit from competition between providers which drives prices down and quality up?

Government are ultimate monopolies: always getting worse and more expensive.

Maybe you are thinking about a handful of functioning, high quality governments (US, Germany, Nordic States) but I am thinking about the great majority of the governments on the globe (Africa, Asia, E Europe) which provide really crappy, expensive services.

[jon-wood]

No. I really don't want to shop around when I've been hit by a bus and need urgent medical care. I want to know that whatever hospital the paramedics take me to is going to be equipped to handle things, and that I won't be handed a crippling bill afterwards.

I also don't want to shop around for roads, police, fire service, garbage collection, or any number of other things provided by my taxes. I definitely don't want people less well off to go without those things because they couldn't pay. The point of taxes, and particularly progressive taxes, is to ensure everyone has access to services while placing the burden for that on those most able to afford it. That isn't particularly well implemented in many cases, but I strongly believe it should be the goal.

[pavlov]

...competition between providers which drives prices down and quality up?

Does it necessarily? Corporations are looking for profit growth, and the customer will pay for that.

Imagine a service where a public provider is replaced with three private corporations. Superficially there's competition and freedom of choice... But what if the three companies all operate at 80% margin, are constantly squeezing on quality to drive the margin even higher, and they are owned by multinationals that spend enormous amounts on lobbying to prevent new entrants in the market? It's easy to see how both price and quality can be worse in this case than it was with the single public provider.

[fooker]

You can shop around for products. Doesn't work that well for infrastructure.

[addicted]

The whole private charity stuff also creates perverse incentives. The better people who do donate to charity, are the ones who are left worse off, whereas the bad ones who never do, are the people who benefit.

That’s the nice thing about a system of taxation, in that no one is penalized additionally while doing good.

[ekianjo]

> Besides, it’s not about just me: the whole point of taxes is that it gives options to everyone, not just those lucky enough to be born to wealthy parents.

Then how does this thinking fit with the reality of taxes increasing everywhere, year after year? Does that mean that services are getting better? Because you know, it's actually the opposite. It's getting worse: more and more illiteracy in schools, inflation of degrees that don't get you any job, more unemployment (or stagnant at best), healthcare with less and less services... etc.

[pavlov]

...the reality of taxes increasing everywhere, year after year

Can you show data to back this up? To my knowledge, income taxes in all Western countries are lower today than they were in the '50s or '70s.

[candiodari]

Do you check the full cycle ? Ie. if your employer gives you $1, and you use that to give it to Apple (for an app, whatever), how much actually ends up with Apple ?

Let me do the calculation for Belgium for you:

$1 -> First, because yearly the employer has to pay you for 13.92 months, not 12 (end of year bonus thing), we take that out. That's 14% (but you get 20 days 1.5 times paid holidays, and an end of year bonus, which is taxed at a higher rate, but you do get that)

$0.86 -> "patronale bijdragen" (30%) -> $0.6 (even this ignores a few taxes that stem from having employees at all, and assumes there is no union at your workplace. Unions are extra).

$0.6 -> brutto <> netto (depends on total pay because this is a progressive tax, but let's assume you have a normal pay (which gets you into the higest tax bracket and taxed at roughly 40%, let's say 50k euros/year before tax, which is not a particularly large amount) -> $0.36 [1]

$0.36 -> VAT 21% is charged on this -> $0.285

So total tax in .be, for normal workers, is 71.5% (a bit less if you make very little, more if you make more).

This is a strict underestimate, as it assumes you're renting, not owning any real estate, producing zero garbage, not using public transport, harbours or airports, or a car or any kind of motorized vehicle, don't use fuel for anything, not using electricity, gas or water, not ...

Also: you might think this is fair. Everybody pays this, right ? Well, there's one tiny little detail that allows anyone sufficiently rich to evade almost all taxes : capital gains is not taxed in Belgium. Needless to say, this is a hole in the tax code big enough to drive the "bagger 288" through, but only open to the rich (more extreme examples have their own company own things like their house, and they "charge" their own company rent to pay almost entirely with pre-tax money, and you charge their own company rent which is not taxed according to the above calculation). [2]

Aside from cementing the position of the rich, and attracting French comedians, I'm not sure what this accomplishes. [3]

And in case you're wondering about the people who decide all these taxes. Surely they pay those taxes themselves, right ? No [4]. They feel they don't owe the state 71.5%, they feel they owe 12% + VAT, or about 30%, less than half of what their subjects pay)

So no, it's just the normal workers that pay this amount. If you are rich and can get your money paid out to you however you want, then you are taxed at less than 30%, or nothing if you "invest" it all (for instance in that house you live in and rent to yourself). If a politician likes you enough, or needs you, you can get a job that doesn't owe these taxes in government.

Still think it was higher in the 50s ? VAT was 0%, pre-pre-tax taxes (patronale bijdragen) were 0%, and income tax was nominally higher, with the highest bracket at 60% starting pretty high (but again no taxes on income that was packaged in companies). So let's say a well paid consultant in the 50s would have been taxed at something like 45%-50% total.

The argument socialist make to further increase the taxes is, of course, not to tax the rich more. That cannot be discussed in public (and of course has nothing to do with the fact that nearly all leftist politicians are rich landlords that have never once in their life paid tax like this).

The worst of it is, this is correct, but if you tell this to a friend ... they don't believe you ... hell some I have gone through this with them in detail, and they still don't believe me.

They don't believe it to the point that they truly don't understand why construction companies pull crap like having their employees "resident" in Poland. Yes those labourers get less money, but the vast majority of the savings is from not having them subject to the Belgian tax system.

What this pays for ? Social security and pensions. Oh, and total amount the government managed to save for future pension payouts with these taxes ? Zero. 0 comma 0. The amount of elderly is rapidly going up, and taxes will need to rise, at minimum, 100% (from their current level, ie. taxes on wages will need to rise to 140% of pay) if the current level of benefits for the elderly is to be maintained.

[1] https://home.kpmg.com/xx/en/home/insights/2011/12/belgium-in...

[2] http://www.taxbites.be/taxation/content/view/64/42/

[3] https://www.theguardian.com/film/2012/dec/22/gerard-depardie...

[4] http://www.brusselstimes.com/magazine2/5828/myths-and-truths...

[pavlov]

I won't pretend to know anything about the Belgian tax code or labor laws. But this strikes me as odd way to do the math:

> $1 -> First, because yearly the employer has to pay you for 13.92 months, not 12 (end of year bonus thing), we take that out. That's 14% (but you get 20 days 1.5 times paid holidays, and an end of year bonus, which is taxed at a higher rate, but you do get that)

Why are you subtracting 14% from the employee here? That 1.92 month bonus is money that ends up in the employee's pocket. From the employee's point of view, you should be adding 16% here -- for every $1, the employee actually gets $1.16 when the full year is considered.

If you count bonuses as losses to the employee, that would make for some very unhappy Wall Street bankers (where bonuses can easily exceed yearly pay).

[candiodari]

Because I'm making a specific calculation, from a specific viewpoint. What I'm telling you is what happens when an employer decides to give you 1 euro of their money, how much you get out of that, in terms of what you can give someone else for a good or service, in the (oversimplified) common case. Given that perspective, I feel my calculation is, barring some oversimplifications, correct.

To be exact at the beginning of the calculation I'm calculating euros that your employer spends on you. At the end of the calculation is money you have given to someone else for a good or service that they can actually use for something.

If you want to look at it from an employee's perspective, you're right taxes would look different. In fact, on your "bruto" pay you'll pay income tax, which will come out at around 45%-50% if you're on something around 50k euros/year bruto. And yes, add 14% because of the 13.92 (well, keep in mind that it'll be taxed at the 50% tax rate, and there are additional taxes levied on top of that 50% on that amount, so frankly it'd be safer to assume you get 5-6% on top of your bruto pay actually deposited in your bank account).

I feel like this is a way the government masks how high taxes are, but of course you can look at it however you want. I guarantee, however, that employers budget for your pay in terms of euros they need to pay to anyone to have you on the payroll, and I guarantee that when someone decides on the price to sell you something, they'll consider VAT to not be part of the money they get.

[Maarten88]

Another bug in the calculation is the VAT. Apple will recover most (probably even all) of it on the purchase side of their balance.

[baybal2]

A very insightful comment you made!

>but again no taxes on income that was packaged in companies

Glad that you noted that. I feel that packaging your own income in shell companies is very common across the Western world

[piva00]

I don't think you can be that expansive about your personal experience with taxes, it's very dependent on where you live and it really seems you don't live in the same place where I do so please contextualise where your argument comes from and add some data to base it on.

[Vinnl]

> Does that mean that services are getting better?

One part of it is that there's more of it: more elderly people that require and receive care.

[thriftwy]

Being 32, I fail to understand how it benefits my bottom line.

[Vinnl]

The theory is that you both a) have relatives/other people that you care about that benefit from this, and b) that you will benefit from it when it's your turn to live even longer.

Of course, it's yet to be seen how well b) will play out in practice.

[thriftwy]

Maybe they do benefit from this. I fail to see how it converts into an obligation for me.

I care about X. X would like to recieve money backed by my payments. Does that mean I owe them those payments?

How well do Ponzi schemes play out in practice?

[ekianjo]

We already know that b) is not going to work in practice, because of the population curve. So, there's that. Why should you pay for something you will never get yourself?

[Quarrelsome]

> ok, so he's basically suggesting to get of rid government.

Considering he grew up under the USSR, Yeltsin and then Putin I don't really find that surprising. Perhaps he'd have a different point of view if he came from a society where he wasn't forced to sell his social network.

[ekianjo]

> ok, so he's basically suggesting to get of rid government.

Nice Strawman. So complaining about high taxes means you are either for or against having a government?

[adrianN]

It does sound like he is against all taxes. Without taxes it's hard to have anything that you'd recognize as a government.

[ekianjo]

The UAE have no income tax. Does not strike me as a country looming into anarchy.

[adrianN]

Wait until the oil runs out.

[maelito]

Here in France, lots of people don't do the difference between the taxes that go to the government, and the social security deductions. Calling the latter "taxes" is wrong. Most of it pays for your retirement and your health problems.

[lucbocahut]

I think the perception that social security and retirement deductions are taxes stems from the fact these are obligatory. Insofar as we have no choice in the matter these have all the properties of taxes. With the caveat it is difficult to compare one country to another because the value of government services you get is somewhat subjective, I offer the following data point for France: if a company outlays 100k, the employee would take home about 58k before income tax. A single person would pay 10k in income tax on that. All in he would therefore have 48k to spend. This might be useful for those of you wishing to evaluate the cost of hiring in France.

[maelito]

Exactly. The government is releasing open source software to make these estimations : https://embauche.beta.gouv.fr/simulateur

[pfortuny]

As long as it is compulsory, it is a tax. Whether it goes to your health problems or your street is irrelevant. If you have no control over the money, it is a tax.

[Xylakant]

Taxes are free to spend for the government, that is they are levied for whatever action or property the legislators choose to tax. Social security, retirement and health care plans are bound to a purpose and cannot legally be spent on other purposes. They often are compulsory but for example in Germany, health care is mandatory and regulated, but the money does not go to the state but rather to a provider of your choice.

There’s also fees that the administration can levy as payment for specific acts, they’re bound to that act.

Social security payments are not taxes.

[pfortuny]

The fact that the government promises to use that money on some thing or other does not remove the other fact: it is totally compulsory and goes to the Government (who is the only entity able to tax, properly speaking). Hence, Germany's system is not strictly speaking a tax, as one has some choice on the destination.

In the same way, donations are not tax (but because they are just contributions to the welfare, they are tax-deductible).

Compulsory Social Security payments to the Government are as much tax as VAT.

[Xylakant]

> The fact that the government promises to use that money on some thing or other does not remove the other fact: it is totally compulsory and goes to the Government (who is the only entity able to tax, properly speaking). Hence, Germany's system is not strictly speaking a tax, as one has some choice on the destination

There are lots of mandatory payments that are not taxes: To register a car, you need proof of insurance. Mandatory, government controlled, not a tax. Want to build in flood plains? Some regions enforce a flood insurance. Mandatory, not a tax. Want to register a business in germany? Need to be member of the IHK and pay membership fees. Mandatory, government enforced, not a tax.

Money paid to the Rentenversicherung, to health insurance etc does not go to the government. It goes to semi-private entities (mostly Körperschaften öffentlichen Rechts) and the government has very little control over it other than negotiating the rate and negotiating the mandatory payouts. The money does not go to the government, it cannot be spent on anything other than the purpose it way paid for: Arbeitslosenversicherung pays for the year of Arbeitslosengeld, pension funds for your pension and health insurance when you're ill. All of this may be additionally supported by taxes, but that money comes from the regular tax pool. The individual health insurance providers are actually competing and you, as a member can vote for the governing council of your health insurance.

[kogepathic]

> Social security payments are not taxes.

I agree with you. In my experience most people in Canada, and perhaps the US too, consider any government mandated deductions from your gross salary to be "taxes," regardless of the final destination of the money.

This is why you have people arguing that health care contributions and social security payments are "taxes"

Source: lived in North America and Europe

[kelnos]

Yes, when you already have hundreds of millions of dollars in the bank, you can probably afford to duplicate many services that governments provide, if you so choose. Not really an option for >99% of humans.

[bufferoverflow]

It's not equal to "get rid of the government". It's just that their government runs on oil profits instead of taxes.

[stfwn]

Which is an excellent way to make sure the incentives of the government and its people are aligned. \s

[kaushikt]

> ok, so he's basically suggesting to get of rid government

Really doesn't feel like it.

[mrwong]

Tax burden in Germany for middleclass is at around 70%. Beeing a software engineer in germany means that you code 8months for the government and 4months for yourself.

The western governments introduced more and more “hidden” taxes. So just looking at income tax is not fair.

Just because he advocates for lower taxes doesn’t mean he want anarchy.

[_s]

> Tax burden in Germany for middleclass is at around 70%. Beeing a software engineer in germany means that you code 8months for the government and 4months for yourself.

> The western governments introduced more and more “hidden” taxes. So just looking at income tax is not fair.

Please don't pluck figures like that out of thin air - I worked in Berlin as a developer and I easily took home ~60% of my monthly salary (placing tax at around 40%).

Those taxes already comprise of Social Security* (roughly 20%) and income tax (the remainder 20%).

* Health, Retirement, Unemployment etc.

[krrrh]

You’re not counting VAT which is 19% of most of what you purchase. Corporate tax is largely bundled into consumer prices as well, and depending on your consumption patterns, and transportations choices there are other taxes that apply. In no way is this list exhaustive.

[nikcub]

A good way to normalize it for comparison is tax income as a proportion of GDP[0]

The table on wikipedia[1] shows Norway, Finland, Denmark and Sweden at all over 50%. Germany at 44.5% while the UK is 34.4%, Australia at 34.3% and United States at 26%

[0] https://stats.oecd.org/Index.aspx?DataSetCode=REV#

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

[SyneRyder]

There's also the compulsory 9% Church Tax in Germany, unless you formally renounce your religion:

http://www.telegraph.co.uk/news/worldnews/europe/germany/113...

Notably: "The changes include German banks now having to withhold the tax on capital gains of account-holders who are church members."

[germanier]

It's 8-9% of your income tax – so in reality maybe 2% of your income or less.

This tax is levied by the churches. You may be against the fact that they get this right because you support a more strict separation of church and state (which is not in the spirit of the German constitution) but this is hardly something the state is to blame for.

[reitzensteinm]

It's opt out, which is pretty evil. You can absolutely blame the state for that.

https://www.settle-in-berlin.com/stop-paying-german-church-t...

[SyneRyder]

Ahh, I didn't realize it was a percentage of income tax. It was explained to me by Germans as tithing, according to the idea of donating 10% of your annual income to the church.

I'm not necessarily for or against it, and it does seem pragmatic for the government to automatically collect it on the church's behalf. The part that does seem strange to me is that you have to renounce your religion to opt out of the automatic deduction, but I understand it's a cultural difference. I'm more used to the idea of contributions as voluntary.

(I'm not German or religious, just an Australian who is a fan of Berlin & Germany and often considers moving there.)

[zaarn]

Formally renouncing your religion is easy and can be done fairly quickly, I've done it.

[_Codemonkeyism]

The 9% are on the income tax, e.g. 9% of 40% not on income.

[a-saleh]

so .. 59% tax then?

[CodesInChaos]

You can't just add the percentages for income tax and VAT. If you were to combine a 40% income tax and a 19% VAT, you'd end up with 49.6% effective tax. (1-(1-0.40)/1.19)

(I'm not arguing that this naive computation makes sense, you pay different VAT rates or no VAT at all, depending on what you buy. I don't think you have to pay VAT on rent, which is a significant part of the income for many people and reduced VAT on most groceries)

[germanier]

For the middle-class the estimates are that about 8% of your income goes to VAT.

[a-saleh]

Thanks! My brain kinda failed me there :)

[GeneralTspoon]

I imagine that he/she is also including VAT in that 70% figure (which I believe is currently 23% in Germany).

In Munich my taxes on my pay check were around 45% as a software dev (including pension & insurance). So 70% total tax might not be far off the mark (assuming that you spend most of your income on VAT goods & services). Although you have to remember it's not 23% of your totoal income, but 23% of the remaining 55%.

There are also other hidden taxes though - import duty, corporation tax and council tax (cant remember if that was a thing in Germany), to name a few.

[zaarn]

It's 19% for most stuff and 7% for some other stuff, on average it's closer to 16 o 17% on everything you buy and pay.

Once you account for the 17% being part of your remaining money, you get an effective incoming VAT tax rate of 8.5% (assuming you keep around 50%, if you keep more, this goes up)

I believe the highest amount of income tax you pay is around 60%, plus 8.5% you get close to 70%. However, most people will pay closer to 45 and 50% tax or less so a more realistic figure is 50% to 60% income tax.

It should probably also be included when you get benefits from things paid for in part by this, ie your insurances and pensions and such.

[Xylakant]

The highest amount of income tax you pay (Reichensteuer) is 47,48% (45% plus Soli). This number is a bit misleading though since the tax rate is a curve that starts at 14% for incomes above 8656 EUR and reaches a plateau of 42% at a yearly income of roundabout 53000 EUR. The highest tax rate only applies to the part of the income that exceeds about 250000 EUR. So the first 8k are tax free, for every EUR above that you pay a tax rate according to the curve and only the part of the income that exceed 250000 EUR pays the full 45%. So if you have a yearly income of 250001 EUR, the 45% get only levied on 1 EUR. It's obvious that the effective tax rate is far lower than 45% for any income that does not massively exceed 250k.

The blue curve in that graph is the nominal tax rate (Grenzsteuersatz) and the green curve the effective rate: https://de.wikipedia.org/wiki/Einkommensteuer_(Deutschland)#...

[zaarn]

I was probably misinterpreting/mismathing the wikipedia entry, it's been a while since I seriously dived into german tax law.

[mbid]

Actually, it's 0.23 / 1.23 ~= 18.7% of the remaining 55%.

[CodesInChaos]

Keep in mind that what the employer pays is about 120% of your misleadingly labeled gross wage. From my point of view the division into employer and employee contributions to what you call Social Security is quite artificial and thus think that you need to compare the net wage with what the employer actually pays.

For example, say your gross wage is 5k/month, the net wage 2.8k and the employer pays 6k. So you take home about 47% of what the employer pays.

[kqr]

I don't know, both figures seem entirely reasonable to me.

However, looking at the OECD figures for Germany of yearly tax revenue (all types of taxation) per capita (15 kUSD) and yearly average wages (45 kUSD), you'd think 30% was the average tax pressure. It then makes sense that you'd pay slightly more taxes, given that you probably earn more.

What the other person may have referred to is some combination involving the tax wedge (the ratio between labour taxes and labour cost not counting taxes), which is 50% in Germany currently, and was near 55% a few years ago. But that number is not relevant to this discussion...

[TrickyRick]

And you didn't get healthcare, free education for 20+ years, subsidised student loans, retirement money, police, fire department etc. from the state? You really should stop and think what you get from the state before you criticise what the state takes from you.

[JoshTriplett]

> You really should stop and think what you get from the state before you criticise what the state takes from you.

And when you're done doing so, and decide that it's not a good deal for the money, then you're told to do it again, and again, until you get the "right" answer the person patronizingly telling you to do so expects.

It's reasonable to have a discussion about the most reasonable, efficient, and appropriate way to fund certain things, as well as whether they should be funded at all, and whether funding them should be mandatory. Such discussions should not be derailed by people simply saying "think about what you get" as though the people participating in them haven't already thought about that just because they come to different conclusions.

[KozmoNau7]

History shows us that privatization always ends up being more expensive for the average person, while still providing lower-quality service than the old public system.

[mrwong]

Example please? By that line of thinking the Soviet Union must have had the best and cheapest service and products. Also Venezuela should be a total Dream right now without empty stores, starving children, no murder rampage.

[KozmoNau7]

I did not in any way imply that a strict top-controlled planned economy system like in the USSR was better. I also did not imply that the current state of chaos in Venezuela is preferable (and that happened due to a bone-headed reliance on a single big export product, which completely collapsed when global oil prices crashed).

I'll amend my statement to "privatization of a functional public system, ostensibly to provide better/cheaper service".

Examples from my own backyard include the Danish State Railways, Ørsted (previously DONG), TDC (previously TeleDanmark, which was previously KTAS, JTAS and Fynsk Telefon) and others.

Were they perfect? No, there was a lot of waste and mismanagement of resources. But as investors came in and demanded rationalization and austerity measures in the name of Holy Profit, customer service and general quality plummeted.

The current state of ISPs/telcos in the US is another good example of privatization gone bad.

[olau]

Taxes is traditionally a heated subject.

I think it's unreasonable to express a simple (one-sided) argument within this subject and not expect a one-sided answer from someone.

It is truly a complex subject.

Now, I expect someone to disagree with that statement. :)

[esrauch]

One interesting property of the US tax structure is that most of the tangible benefits are mostly funded locally (education for 13 years, police, fire, most roads) which is generally a lower tax rate than the federal taxes (which don't as clearly connect to the services that we all need): especially if you don't consider the >50% of federal money spent on the military to be a good use the federal/state/local divide makes it very visible that the taxes you pay are mostly not going to the services that we need.

[kelnos]

That's a little misleading, as a ton of federal dollars come back to the state governments. It seems inefficient (and it is), but it's a way of applying political pressure, and of redistributing money from states with stronger economies to those with weaker economies.

[esrauch]

I don't think it is that misleading, the bulk of federal tax dollars are spent at the federal level. More of my net tax dollars go to tanks than schools or roads right?

[rorykoehler]

Healthcare isn’t free in Germany. It’s extortionately expensive.

[germanier]

It is (close to) free if you already pay the contributions we are discussing about here. Note how the post said you get free healthcare if you paid your contributions.

The contributions are not extortionately expensive. It may seem that way if you are healthy, high-earner, and young. But looking at the actual cost of providing healthcare it's pretty competitively priced. Over the lifetime of a person private health insurance is not that much cheaper. You can view the difference as a tax supporting the poor and chronically ill if you like.

[Xylakant]

> It may seem that way if you are healthy, high-earner, and young.

Interesting tidbit that many people tend to forget about: Health care payments are capped. The maximum monthly income that gets counted is 4425 EUR/month of which about 14% get paid in total. So if you earn 10k a month you effectively pay a lower rate. The effective health care rate drops for high-earners.

[ceejayoz]

It costs about half what the US pays per capita.

https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...

[germanier]

Any credible calculation[0] puts the tax burden of all groups at 50% at most (and most middle class is not taxed at that number) – including all taxes, contributions, levies, and VAT. You would have to add the employer's contributions to that number (but they are less than 10%).

A better measure would be the tax quota (gross national product divided by all taxes and contributions) which is about 35%. This is the effective rate the state gets for everything it does.

[0]: Such as the RWI study which really can't be accused of downplaying the numbers http://shop.freiheit.org/download/P2@675/96532/A4_Steuern%20...

[WA]

70%? How do you come up with that?

It's roughly 40.5% for most middle class people. If your salary is 4,000€ per month, you get wired 2,380€ to your bank account. Income tax, social security contributions, retirement contributions etc. already deducted.

You could add 19% VAT for all purchases on your tax burden, but that's not 70%.

[mrwong]

Like I said its hidden. E.g. my employe pays around 90k for me of which I only see 78k then they apply Tax, pension, healthcare, mandatory unemployment insurance etc, Im left with around 40k. Then i go and spend it and it again gets taxed with 19%. Many products have beeryax, coffetax etc. higest is petrol tax which is 70%. So If i spend 200€ on petrol an month, 70% is tax. I could go on and on. like I said those tax are hidden.

[Tomte]

> Tax burden in Germany for middleclass is at around 70%

Even under a charitable interpretation this is simply wrong.

I suppose you have no first-hand experience, but have read that on social media?

[OoooooooO]

If you're self-employed the tax rate is ~70%, at least for lawyers in germany. Source: My self-employed gf.

And no, she does not earn 5 figures, 4-6k gross per month with 1 part-time employee for the bureaucracy stuff (bills, phone service, faxing, scanning etc.). With a 60 hour week.

[germanier]

Your girlfriend does not pay 70% tax. This is mathematically impossible if you actually look at all tax rates.

[Tomte]

No, she doesn't.

You must be counting all kinds of other expenses. Professional insurance or bar membership, for example.

[lentil_soup]

That's just a big lie, it's nowhere to 70%. Besides it will vary depending on your salary, your state and your personal situation (i.e. kids, married, age).

Also worth noting that that tax includes full health insurance.

You can easily calculate your take home pay for Germany here: http://www.parmentier.de/steuer/steuer.htm?wagetax.htm

[laingc]

That’s only income tax, not the total tax burden.

My total tax burden in Germany (Munich) was around 65%-ish, depending on exactly how aggressively you want to factor corporate taxes into consumer prices.

[fabian2k]

You're almost certainly including social security here, health care and retirement. This is not exactly a fair comparison, as in countries with lower tax burden you have to pay for those yourselves.

[kachurovskiy]

34% for a family with one child in Munich, 30.5% on capital gains.

[aaronbrethorst]

You're implying that government does nothing—or at least nothing positive, which is a specious argument at best.

[throwaway13337]

There's also the most hidden tax of all: inflation.

[baybal2]

That point is totally valid. "The West" is rapidly becoming a mirror image of the Soviet Union. With half or more of economic value of your work going to uncle Sam, how this is not a state ran economy?

If I remember correctly, the split for a typical Soviet citizen was 60/40, and this is where the West will be this decade if government expenses will continue rising at the speed they do.

[pavlov]

Comparing tax rates with the Soviet Union is totally meaningless because the economy was fundamentally supply-limited.

It’s not that people didn’t have money — they didn’t have anything to buy that they actually wanted. The same applied to the government-owned businesses. The economy was flush with rubles that everyone desperately wanted to spend on something. The tax rate was just optics.

[aaronbrethorst]

Top marginal income tax rates under President Eisenhower (a Republican) were in the low 90%s.

http://www.politifact.com/truth-o-meter/statements/2015/nov/...

[nickik]

This is a total BS argument. Nobody ever payed these taxes. Its far more accurate to look at what part of the GDP the government is spending. That number was the further back you go.

[aaronbrethorst]

I'm citing my sources. You could at least show me the courtesy of doing the same.

[snowpanda]

Not OP but he's right, your statement is slightly misleading, not many people actually paid that (fewer than 10,000 households[1]). A good source as you asked for can be found here:

[1] https://taxfoundation.org/taxes-rich-1950-not-high/

[aaronbrethorst]

The Tax Foundation has been called a “deliberate fraud” by Nobel laureate Paul Krugman. (https://en.m.wikipedia.org/wiki/Tax_Foundation)

Also, 10,000 households in the 1950s is roughly equivalent to the top 1% of the top 1%, and exactly who i’d expect to be taxed at a rate of 90%+.

[nickik]

I'm not saying the 90% number did not exist. My point is that overall government was lower then. What part of that are you not understanding?

[rebolek]

If you compare the West to the USSR, you certainly don't know what you are talking about. Taxation in the East block was really not the problem.

[baybal2]

I'm not talking about per se taxation, but the split how much economic value of your work you get in your pocket with a paycheck.

In USSR, 60 percent of economic value of labour was taken by the state. The West went from <20% to over 50% since WW2 and is about exceed that 60% soon.

[bufferoverflow]

That's true of (most of) Europe, the US taxes are lower.