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Comment by sologoub | Hacker News Reader

Colleagues from the EU countries who relocate to the US generally tend to have a two-fold reaction - excitement at the lower tax rates and dismay at the filing complexities.

Would be amazing to have the cake and eat it too - lower taxes and a simple filing system!

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Lower taxes? In France the bracket for a family for €104,120 to €279,132 is only 30%.

Sure if you live in Oaklahoma you might pay less than that but CA/NY state taxes plus property taxes, plus fewer investment tax free options, I think US taxes are now similar or higher. Ie 28% federal + 10% state + 10% property taxes equals nearly 50%. Sure sales tax is lower.

Plus - you still have to pay for your medical care, and universities and no social safety net.

In the UK you don't pay 45% until 150,000 and only 45% on any amount over 150,000 as it's tiered.

Point of information - the progressive taxation ("tiered") method from the UK is the same as in the US.

You pay in tax bracket A up to $X, then the next tier is taxed at tax bracket B, and so on, and so on.

20% VAT on everything makes a difference as well although it isn't an income tax

Raising income tax rates is unpopular, so the UK government adds hidden income taxes that aren't reported anywhere.

You need to add 12% to your marginal tax rate before £46500 per year for national insurance payments (and 2% after that), and 20% between £100k and £121k per year for the loss of the standard deduction. The real marginal tax rate for someone making £100k is 62%.

Also include 12% employer's NI (which by law isn't included in your salary, but must be paid by your employer), and a nice 20% sales tax levied on everyone except people with a significant amount of savings.

Who pays a 10% property tax?

The $165K to $315K bracket for a family in the US is 24%. A healthy chunk lower than France. Plus mortgage interest deduction, etc.

In France, that 30% tax is on your gross income without deductions, and doesn't include a number of other taxes on your income that were already taken out as payroll taxes, usually about 10-20% of your wage income.

In the US, you face a 24% or 25% tax on your gross income after deductions, not including additional credits that may also apply. Payroll tax deductions are also much smaller in the US.

Not aware of any state which has a 10% property tax and an income tax. I am aware of some states having high property taxes but no income taxes...

Finally...we do have a safety net. It's a safety net, not a dole like the European model.

>Not aware of any state which has a 10% property tax and an income tax. I am aware of some states having high property taxes but no income taxes...

California's can be as high as 13 something percent, I believe (though, I think with the kind of numbers the other guy was talking about, it'd probably be like 6-7%). But, you're right that the property tax is a serious exaggeration. Like, expensive places like Austin are around 2%, from what I remember.

California's property tax can't reach 13%. It's been capped at 1% since 1978, and the assessed value can only increase by 2% each year, or when a property is sold. But the tax itself remains 1%...

He means income tax

"Charges salariales" + "Charges patronales": it's way more than 10-20%. It's around 28% for a minimum wage worker, and around 45% for a software engineer making 45k "brut" / year.

Yes, there are a number of other items also taken out of French payrolls...

NJ has high property and relatively high income taxes.

The US safety net is anything but. It barely exists and is extremely difficult to both qualify for and live off of.

10% property tax would spawn a rebellion. Mine is a bit over 2% and people complain about that.

I mean 2% of the property value, then that $ amount as %age of income. California is much lower.

It's 30% of what remains after the "cotisations sociales" (or "charges sociales" as people who hate them like to call them). These social contributions amount to close to 50% of what the employer pays. So it's 30% of what remains, which is already only barely half of what the employer paid... These social contributions cover health insurance, retirement contributions, a pretty generous unemployment insurance, etc. So even though they are expensive for people working in France, the social safety net they provide is pretty good.

The 30% income tax you refer to would not be enough to cover that. I think the income tax in France doesn't even cover the interests of the national debt, that how little it is in the grand scheme of things. Hence why we have a hell of a lot of other taxes (VAT at 20%, CSG, etc.) to keep going...

OK, my mistake, so that adds to 67%, which is a lot. If you add Social Security and Medicare to US taxes I still think North East comes to 55%+. With virtually nothing to show for it.

At least we have the benefit of 14 aircraft carriers.

> ...I think US taxes are now similar or higher. Ie 28% federal + 10% state + 10% property taxes equals nearly 50%.

You can't just add the percentages up like that since federal and state taxes are marginal rates. You'd have to add the effective tax rates.

> Lower taxes? In France the bracket for a family for €104,120 to €279,132 is only 30%.

This range is $118,000 to $318,000 USD. At the federal level for a family $165,000-$315,000 is at the 24% marginal rate of taxable income (not gross).

In the convoluted system we have, you'd knock off $24,000 as a standard deduction, then any amounts contributed to retirement accounts (401k's and IRA's), HSA contributions if applicable. If you add all those vehicles up, that's up to another $54,000 taken off of your gross income. No idea how taxes in France works, aiming to point out there are tax advantaged spaces which would significantly reduce the tax burgeon.

Quick looking at things, NY state income tax would be about $20,500 on $323,000 in earnings (no deductions, credits, averages to about 6.3%).

I'm curious where you got your 10% property tax guesstimate though? I'm not familiar with New York to try to estimate through things, but [5] makes it seem not nearly that bad. Is it a highly localized thing?

"Property taxes in New York vary greatly between New York City and the rest of the state. In New York City, property tax rates are actually quite low. The average effective property tax rate in the Big Apple is just 0.80%. The statewide average rate is 1.65%."

Interestingly, Iowa, which people on the coasts would probably lump together with Oklahoma as low cost of living flyover states, has very high state taxes. 8.98% on earnings above $70,785. [4] New York's highest bracket hits at $2,100,000 and is 8.82%. [2]

[1] Federal Income Tax: https://www.nerdwallet.com/blog/taxes/federal-income-tax-bra... [2] NY Income Tax: https://www.tax-brackets.org/newyorktaxtable [3] NY Property Tax: https://smartasset.com/taxes/new-york-property-tax-calculato... [4] Iowa Income Tax: https://www.tax-brackets.org/iowataxtable [5] New York Property Tax: https://smartasset.com/taxes/new-york-property-tax-calculato...

"Interestingly, Iowa, which people on the coasts would probably lump together with Oklahoma as low cost of living flyover states, has very high state taxes. 8.98% on earnings above $70,785."

True, though so far, at least, I think that's still balanced by being able to deduct federal income tax when figuring what you owe the state. I recall that there's a move to get rid of that deduction.

In France on an income of $100k USD your effective tax rate is 44%. Social security tax in France is significant. In CA you are paying 21%. At $300k USD it is 54% to 30%.

The sales tax in CA is half the rate in France.

Property taxes cannot be directly compared to income, they are based on the location and value of the home. There are large changes to the property tax system in 2018-2020 in France. We can compare overall property tax revenue for the country and divide it per person. In 2015 in France the average property tax revenue per person was $1422 USD. In 2010 in CA it was $1472. CA is higher but not substantially so.

I guess "lower taxes" depends what the extra $200 a month in taxes (on a $70k salary in CA rather than UK) gets you in terms of services. Apparently the average health care cost is $1300 a month, making taxes and other essential expenditure $500 per person per month more in CA than in the UK for a 2 income family on $70k each.

then dismay over medical costs, lack of government services and, many little things like cell-phone and cable fees and taxes.

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