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by paulpauper 1138 days ago
Many Americans are surprised to learn how much higher taxes often are outside of America
1 comments

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