[iso1631]

An company in California spending $500k a year on an engineer will get the employee about $290k a year

An company in the UK spending $500k a year on an engineer will get the employee about $250k a year

An company in California spending $200k a year on an engineer will get the employee about $147k a year

An company in the UK spending $200k a year on an engineer (gross salary £130k plus £17k employer NI) will get the employee about $107k a year

Its not taxes that keep the salaries "down" in the UK

[sguo35]

Hate to break it to you but... $40k a year in extra income is a lot of money. Taking your numbers, 147k is 37% higher than 107k. That money has higher order effects more than just the 40k the employee gets, since all else equal higher salaries attract better talent and winner take all market dynamics mean only the best companies make a lot of money. You might note that Silicon Valley salaries are much higher now than in the 1990s and early 2000s, and this kind of snowball effect is a partial contributor to that. Also, 37% is a LOT and even if you add healthcare and miscellaneous costs that gap is still massive. I would consider anything more than 10% a big difference.

Your own numbers show taxes are absolutely one cause of lower salaries in the U.K., although certainly I don’t claim they’re the only cause.