Tax rates and Net income
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In the UK the highest marginal (income) tax rate is 40%, but it kicks in at ~£33k of income. The average graduate income is about £25k. Over an above this tax rate is National Insurance (supposed to pay for your retirement state pension, and hospitals etc, in the same way that the road tax just pays for roads (NOT!)) but the threashold figures have been slowley brought into line with the income tax thresholds and there are fears that the two will be combined. This will leave our highest marginal rate at c. 50%, as the NI has a nil marginal rate above about £27k I think - there's a band about the 35k mark where your tax percantage actually drops the more you earn. [as an aside NI is calculated on the gross income and then income tax is calculated and removed, so all UK employees typically pay NI tax at 10% on the income tax we pay!!!] Employers pay an additional 10% or so NI over and above the employee wage bill. There is 17.5% VAT to pay on personally purchased goods, VAT registered Employers (ER's) can ofset VAT against this VAT charge. VAT is a luxuries tax, so it appears on chocolate, phonebills and feminine hygene pads (!!!) as they are all considered luxuries. So if you are a typical city employee your marginal spending power is about 25% of your additional earnings. -- but give a specific example: as a wage slave a couple of years ago my direct tax bill on my salary was about 35%. I (am now and) was at that time a 10 year-ish graduate working in the financial services arena (mostly in banking) in the ciy of london. Artist formerly known as the ATL Student
Hey, but you guys get "free" health care.;P
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Hey, but you guys get "free" health care.;P
.. absolutely right we have forgotten free healthcare! Waiting lists are now so long and difficult to navigate that private healthcare insurance is becoming a must have. Non-fatal conditions seem to be a nightmare. Recourse is very difficult - the sue everyone culture is only only just taking off - it only extends to accidents so far - and the companies involvd are not doing very well. Having said that if you get lucky, as we did with my wife's cancer last year, treatment is swift. ATL Student :rolleyes:
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Quite recently someone has posted a thread about a programmer's average salary in different countries around the world. This however, was the glabal pay. But what is your net income ? Here in Israel income tax is so high that after cutting it off ( with the health tax and social security tax we have here) we have about 50% left. So how is it out the in the normal world ?
in the US, my wife and i pay around 30% to the federal govt and 8% to the state govt in "income" taxes. then we each pay 7.5% in social security plus medicare. our employers pay another 7.5% of social security / medicare: which sucks if you're self-employed, like me, and you have to pay the entire 15%. then there are sales taxes of 8% (depending on state/county). so, for each dollar we earn, we can spend around $0.40. then, if we buy anything of substantial value, we have to pay yearly property taxes (based on an appraiser's estimate); in North Carolina, we regularly pay property taxes on houses and cars. -c ------------------------------ Smaller Animals Software, Inc. http://www.smalleranimals.com
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In America you have to have a PHD to understand the tax system. However, more or less, you fall into tax brackets based on the amount of money you make before taxes each year... your "taxable income". Pretty much all income is taxable unless you have certain accounts set up for retirement like a 401K or other plans where money is deucted BEFORE taxes are levied... they still get you later when you retire. THEN they tax the money. After your taxes for the year are taken out, you can essentially adjust your rate by certain things: 1) Owning a home. Tax paid on a home loan is deductable. 2) Children and/or "dependants". For each person that lives in your home that you are responsible for their well-being (children or elderly or infirmed) you get a deduction. 3) Certain programs and military benefits can adjust your returns. It's way more complicated than that, but when you're like me: 1) Rent an apartment instead of buying a home. 2) Upper-middle class pay. 3) No children or wife in a "single income" home. ... you get the worst of it. I get taxed at around 30% which all of a sudden sounds a lot better to me now.:-D
.. We (UK) used to have Mortgage interest relief but the UK economy had been boom-and-bust for so long that the vast majority saw variable rate loans as the only way to go - to make sure that they don't miss out on a rate downswing. The trouble with that is that a change in our base rate by the chancellor had a dramatic effect on most people incomes (mortgage costs are about 35% of net income here). When the incoming labour govt shrewdly freed itself from interest rate decisions (except to give an inflation target of 2.5%) in 1997 the move from boom-and-bust economics started. [The interest rate hawk governor of the BoE has to write to the chancellor explaining why the interest rate ctte underperformed the inflation target I think.]. Real interest rates ( interest rates less inflation (sometimes wage inflation c.4.5% sometimes CPI)) are actually quite high historically. The chancellor, aside from introducing the botched IR35 regeme [soapbox]agree with principle, practical application by govt very poor[/soapbox], has made considerable moves to long-termism and the 'risk' premium of fixed mortgage rates has dropped considerably. The labour party (I hesitate to say left wing) has stolen the conservitive party mantle of the party of business - a very considerable feat. The manufacturing industry was decimated by boom-and-bust and is startig with the help of very large capital allowances to restart. UK Individuals (traditionally financially illiterate) are investing generally and for instance specifically in buy-to-let schemes increasing the stock of affordable housing for the poor and transient (eg. consultants like 'us' on a project). But this causes problems for the government - a financially aware electorate is far more observant and so critical of the taxes and costs of government regulation that they usually pay as a result of the government in power - a far cry from the old. E&OE (but please correct me). ATL Student :rolleyes:
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Quite recently someone has posted a thread about a programmer's average salary in different countries around the world. This however, was the glabal pay. But what is your net income ? Here in Israel income tax is so high that after cutting it off ( with the health tax and social security tax we have here) we have about 50% left. So how is it out the in the normal world ?
In the US, it's a sliding scale with incentives (loop-holes), exemptions(loop-holes), and deductions (loop-holes), imposed by bureaucrats (fruit-loops). The more you make, the less you pay. And that's just taxes. Then there's the "as-long-as-I'm-alive-your-financial-life-will-be-hell" ex-wife kickback, the "screwing-you-get-for-the-screwing-you-got" child-support payment, the "you-must-be-nuts-if-you-really-think-I-can-keep-that-harpie-bitch-off-your-back" lawyer retainer, and the "we-are-a-monopoly-so-bend-over-and-take-it-in-the-shorts-like-everyone-else" Microsoft computer usage fee. By the time you're done with all that, you have about $30 net from each paycheck.
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In the US, it's a sliding scale with incentives (loop-holes), exemptions(loop-holes), and deductions (loop-holes), imposed by bureaucrats (fruit-loops). The more you make, the less you pay. And that's just taxes. Then there's the "as-long-as-I'm-alive-your-financial-life-will-be-hell" ex-wife kickback, the "screwing-you-get-for-the-screwing-you-got" child-support payment, the "you-must-be-nuts-if-you-really-think-I-can-keep-that-harpie-bitch-off-your-back" lawyer retainer, and the "we-are-a-monopoly-so-bend-over-and-take-it-in-the-shorts-like-everyone-else" Microsoft computer usage fee. By the time you're done with all that, you have about $30 net from each paycheck.
The more you make, the less you pay. And that's just taxes. I totally disagree. The more you make the more dollars you pay. Because of all the loop-holes, a lot of them have been closed, a truly rich person may pay a less percentage of his/her income than you or I but they still will pay more overall dollars. I bet Bill Gates does not pay a huge percentage of his income to taxes, but he sure is paying more dollars than me. Everything else you said I agree with, I just haven't had to deal with it since I am still married to my first, and only :confused: , wife.
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in the US, my wife and i pay around 30% to the federal govt and 8% to the state govt in "income" taxes. then we each pay 7.5% in social security plus medicare. our employers pay another 7.5% of social security / medicare: which sucks if you're self-employed, like me, and you have to pay the entire 15%. then there are sales taxes of 8% (depending on state/county). so, for each dollar we earn, we can spend around $0.40. then, if we buy anything of substantial value, we have to pay yearly property taxes (based on an appraiser's estimate); in North Carolina, we regularly pay property taxes on houses and cars. -c ------------------------------ Smaller Animals Software, Inc. http://www.smalleranimals.com
property taxes on cars, OUCH!! X|
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In the US, it's a sliding scale with incentives (loop-holes), exemptions(loop-holes), and deductions (loop-holes), imposed by bureaucrats (fruit-loops). The more you make, the less you pay. And that's just taxes. Then there's the "as-long-as-I'm-alive-your-financial-life-will-be-hell" ex-wife kickback, the "screwing-you-get-for-the-screwing-you-got" child-support payment, the "you-must-be-nuts-if-you-really-think-I-can-keep-that-harpie-bitch-off-your-back" lawyer retainer, and the "we-are-a-monopoly-so-bend-over-and-take-it-in-the-shorts-like-everyone-else" Microsoft computer usage fee. By the time you're done with all that, you have about $30 net from each paycheck.
Actually, everyone, rich included, are paying far more than they should be.
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The more you make, the less you pay. And that's just taxes. I totally disagree. The more you make the more dollars you pay. Because of all the loop-holes, a lot of them have been closed, a truly rich person may pay a less percentage of his/her income than you or I but they still will pay more overall dollars. I bet Bill Gates does not pay a huge percentage of his income to taxes, but he sure is paying more dollars than me. Everything else you said I agree with, I just haven't had to deal with it since I am still married to my first, and only :confused: , wife.
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property taxes on cars, OUCH!! X|
a new $27K car will run you around $300/yr in property taxes. it's worse for a business, which has to pay property taxes on any physical assets (furniture, computers, etc.). -c ------------------------------ Smaller Animals Software, Inc. http://www.smalleranimals.com
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That was eactly my point. They more money you make, the lower the percentage of your salary you pay for taxes. The "middle class" is supporting the country, and the rich aren't paying their fair share.
I guess we will have to agree to disagree on this one. I just look at the math. $1,000,000 x 15% = $150,000 $30,000 x 20% = $6,000 Now who is supporting our country??? :confused: Granted, there are many more middle income people than the rich. But, understand this correctly, it does no good to try to raise more taxes by taxing the rich more than they are already taxed. It always gets passed to the middle class, by way of more expensive products, not buying of luxery items ( hurts workers ), etc. And this from a fellow Texan. X|
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I guess we will have to agree to disagree on this one. I just look at the math. $1,000,000 x 15% = $150,000 $30,000 x 20% = $6,000 Now who is supporting our country??? :confused: Granted, there are many more middle income people than the rich. But, understand this correctly, it does no good to try to raise more taxes by taxing the rich more than they are already taxed. It always gets passed to the middle class, by way of more expensive products, not buying of luxery items ( hurts workers ), etc. And this from a fellow Texan. X|
Wayne, some people, in fact most people, will simply never understand the math. How can anyone believe that things are made more "fair" by forcing someone else to pay more taxes? Fiscal resources should be left circulating freely in the economy to the greatest extent possible. That does everyone, poor and rich alike, more good than any amount of money sucked up unnecessarily by the government.:rose:
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Actually, everyone, rich included, are paying far more than they should be.
we as (US) Americans don't get what we pay for... viz. by most accounts, as taxpayers we pay about $.55 to $.65 of every $1 that we earn in taxes but, what do we get for all that? a failing educational system, a corrupt failing health care system, non-representative paid-for-by-corperations "representatives" (both bore and gush raised over $140M from corperations, more than 95% of their campaign finances, similar numbers in senatorial races, both Dem and Rep), an enviromental conservancy organization that sells the environment to logging companies, and lots of high tech military hardware (a $1B plane anyone? a few $2M 40% accurate missiles?) -John
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I guess we will have to agree to disagree on this one. I just look at the math. $1,000,000 x 15% = $150,000 $30,000 x 20% = $6,000 Now who is supporting our country??? :confused: Granted, there are many more middle income people than the rich. But, understand this correctly, it does no good to try to raise more taxes by taxing the rich more than they are already taxed. It always gets passed to the middle class, by way of more expensive products, not buying of luxery items ( hurts workers ), etc. And this from a fellow Texan. X|
Are you saying that I should pay a higher percentage of tax because I make less or that the guy making more should pay a lower percentage? That's utter bullcrap. I don't see how anyone would think that's fair at all. Besides that, the rich SHOULD be paying more taxes "to support the country", because when you get right down to brass tacks, they control who gets elected in this country (and it shouldn't be that way). I understand the math, but that still doesn't make it right.
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Quite recently someone has posted a thread about a programmer's average salary in different countries around the world. This however, was the glabal pay. But what is your net income ? Here in Israel income tax is so high that after cutting it off ( with the health tax and social security tax we have here) we have about 50% left. So how is it out the in the normal world ?
Hello from Canada. Tomorrow is what we like to call Tax Freedom Day. That means that tomorrow I start working for me and not the government. So tax is about 50% here. But we get "free" health care (if the waiting line for procedures doesn't kill you! X| ). Actually higher income earners have some other surtaxes that push tax freedom day into July.:mad: Dave
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Hello from Canada. Tomorrow is what we like to call Tax Freedom Day. That means that tomorrow I start working for me and not the government. So tax is about 50% here. But we get "free" health care (if the waiting line for procedures doesn't kill you! X| ). Actually higher income earners have some other surtaxes that push tax freedom day into July.:mad: Dave
.. we never here that much about Canada over here (li'l Ingland) [last time was a letter y'man wrote about honours our man who doesn't agree with honours dished out]. Never been. What's the best time/area to go? Spent a lovely time in cape cod some years back, arrived with green leaves, left with brown, in the space of two weeks. The memories .... ATL Student :rolleyes:
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Are you saying that I should pay a higher percentage of tax because I make less or that the guy making more should pay a lower percentage? That's utter bullcrap. I don't see how anyone would think that's fair at all. Besides that, the rich SHOULD be paying more taxes "to support the country", because when you get right down to brass tacks, they control who gets elected in this country (and it shouldn't be that way). I understand the math, but that still doesn't make it right.
No I am not saying you should pay a higher percentage of tax, I personally believe everybody should pay the same rate, a.k.a. flat tax. But what I am saying is you should not support this class warfare and say the rich are not paying their fair share, because I am sure in the eyes of the tax laws you are considered very rich.
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No I am not saying you should pay a higher percentage of tax, I personally believe everybody should pay the same rate, a.k.a. flat tax. But what I am saying is you should not support this class warfare and say the rich are not paying their fair share, because I am sure in the eyes of the tax laws you are considered very rich.
Having a high income doesn't mean you are rich - it is usually a sign of quite the opposite in this high-consumption society. The rich try to ensure that they have a low income in order to avoid paying income tax which has a higher public profile and more visiously taxed. ATL Student :rolleyes:
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Having a high income doesn't mean you are rich - it is usually a sign of quite the opposite in this high-consumption society. The rich try to ensure that they have a low income in order to avoid paying income tax which has a higher public profile and more visiously taxed. ATL Student :rolleyes:
The only rich guy I know does his fair share by signing my paycheck every couple of weeks! And thats the way I like it.
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Having a high income doesn't mean you are rich - it is usually a sign of quite the opposite in this high-consumption society. The rich try to ensure that they have a low income in order to avoid paying income tax which has a higher public profile and more visiously taxed. ATL Student :rolleyes:
To me rich is not having to work the rest of your life for a paycheck. But in the eyes of the government, anybody making over $50,000 or so is considered rich. So when they say they are raising the taxes on the rich, it will be you.
