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by andai 1142 days ago
How does half of $2K (over 2 years!) go to taxes? Doesn't that put you in the bracket where the government gives you money?
5 comments

If you are doing content creation part time you are going to have more income than the 2k. the 50% is likely the marginal rate though and not the effective rate.
You should be able to offset a fair few costs against that income.
Presumably he has a high paying engineering role as well
if you're in Denmark it would be easy to get to the point where half would go to taxes, also some countries can have different rates on what is your primary income and what is income earned from secondary sources that are taxed higher. However in the case of having a business that is generating taxable revenue you are probably also buying things at times you can deduct, so it's probably not as dire as all that - although depending on how things are you might not want to deduct more than you actually earn from your secondary source of income.
Many Americans are surprised to learn how much higher taxes often are outside of America
1. The California calculation includes state and federal income and employee share of federal payroll taxes; the UK site appears to include only income tax [see EDIT] (the UK has more complicated payroll tax rates, but each of the employee and employer share can be close to as much as the combined US rate of 14.85% below the Social Security cap) [1].

2. The UK has much higher consumption taxes than the US (including California) with a 20% VAT and gas taxes close to $3/gallon, compared to (in California) a maximum of 10.25% sales tax and $0.725/gallon state+federal excise tax on gas.

[1] https://www.gov.uk/national-insurance-rates-letters

[EDIT: Actually, the UK calculation does include “National Insurance”, which is the payroll tax equivalent, but it is after the "total tax due" that the parent used for the comparison. With the employee share National Insurance payment included, the UK total is 30%, higher than the CA amount even before considering the impacts of higher consumption taxes and the higher employers-share National Insurance.]

Your links show that take home pay is higher in California ($72K vs £55K/$69K), despite higher tax rate.
This is a result of including employee-share payroll tax (FICA) in the California tax total, but not including the UK equivalent (employee share of “National Insurance”), which is listed after the “total tax due”, as part of the UK tax total.
Broadly equivelent to employee part of healthcare contributions in the us
not unless you don't get any other money