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by justchilly
2137 days ago
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The 36% US rate doesn't include Payroll Tax, Social Security, or healthcare (premiums paid by both employer and employee, additional out of pocket by employee). The 48% France rate doesn't include Employer Social Security Contribution - which is significant but includes a pension etc. In essence a person making 211k Euro is getting paid a lot more than someone making $250k USD because of that pension alone (i.e. its more like someone making ~$280k USD, which would be a US combined rate of more like 40%, before payroll tax, etc etc) 401k is not tax free, it's tax deferred. You still pay tax, just when you cash out. |
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Personally, by far my largest tax is income tax (which is far lower in CA than France for my level of income). Everything else is basically meaningless in comparison.
"Healthcare" also isn't a particularly strong case for the scenario you're proposing. If you're making $250k, you've probably got pretty good employer sponsored health insurance. Personally I pay nothing for a fairly good plan with low deductibles and copays. Health insurance in the US sucks for the unemployed and for low-income workers, but it's not at all bad for high earners.
401k taxation is also much more nuanced than you're making it out to be: it's taxed on withdrawal, at the rate you're withdrawing it. If you're retired — which is when you'd withdraw — your other income is probably zero, so your 401k is taxed in a very low bracket since it's your only income, and you're only withdrawing as much as you need to spend — as opposed to income earlier in life, where you're trying to make much more than you spend in order to build up savings. So while it's not exactly tax-free, it's extremely low tax generally. Presumably any other money you're relying on at that point you'd structure as long-term capital gains, which are also taxed at a low rate.