Hi everyone,

Usually I am not that deep into politics and stuff. But the economical situation is getting worse and worse.

I am very curious about the income tax in your other countries. Of course there will be some special cases here and there. For the most people they simply have their income from work and thats it.

I just wanna get a feeling what income tax looks in other countries to be able to judge the situation here - in Germany - better.

Income Tax in germany for a single person: (yearly income)

Income < 10.347€ --> 0% (no taxes - but still social insurance contributions)

Income > 10.348€ --> 14% up to 42% (increasing % with increasing income)

Income > 58.597€ --> 42% (top tax rate)

Income > 277.826€ --> 45% (rich taxe rate)

(Just for the sake of completeness: Contribution for social insuraces are to be paid additional to these taxes. Contribution for social insuraces are capped at different values)

Clarification: People earning 60.000€ dont pay 42% for their whole 60.000€, but 42% only for the money above 58.597€. For the lower levels they payless taxes for the accordingly amount. There are huge tables, which exactly state how many taxes you have to pay for which income.

Compared to that:

Average salary: 51.009€

Median salary: 44.074€

That basically means that everyone, who earns 15% more than average salary (or everyone, who earns roughly 33% more than median salary) pays top tax rate!

58.597€ before tax and insurance contributions concludes to roughly 35.000€ net. (2916€ monthly)

51.009€ before tax and insurance contributions concludes to roughly 31.350€ net. (2612€ monthly)

44.074€ before tax and insurance contributions concludes to roughly 27.900€ net. (2325€ monthly)

To put these values it into perspective: (just my own experience, of course these values can and will vary and depend on many factors)

If you pay like 500-600€ per month for rent, it is considered cheap, roughly 800-900€ should be kind of "normal".

If you pay like 300€ per month for your car (fuel + insurance + taxes + everything else), it is considered cheap, roughly 400-500€ is rather "normal".

If you pay like 100-150€ per month for food, it is considered cheap, 200-250€ is rather normal. (1 person)

I personally dont need too much stuff, dont even have a car or even a drivers license (using public transport) and I need like 1100€ monthly for my living. Yes, there are people, who need less, but I guess the majority, who lives alone (and so cant share any costs for like rent) needs (much) more.

Nowadays, if you need a flat for your family (2 adults, 1-2 children), like 80-90 square meters, you need to be lucky to find something in a good location below like 1400€.

My main issue is that everyone here who earns a little bit more than median/average pays top tax rate for a part of his income. It is not just a thing for rich people, but for many kind of normally average people. (I am far below that^^)

Yes, there is another step from 42% to 45%, but in general 42% is considered being the top tax rate.

Its not about crying or something, I just want to find out the situation in other countries.

I also know that you can not fully compare it because yet alone the public social services are differing massively, but still this can be a nice indication.

The U.S income tax is pretty progressive. 

A median head of household in my state makes about $38,000 USD. 

They'd be taxed at 10%*$9,950 + 12%*($38,000 - $9,950) = $4,361 per year federally if there were no deductions. That only puts them in the second marginal bracket. There are five brackets above that, and you need to make more than $523,601 to be in the top bracket (37% of income.) Basically there are people in the 1% of all income-earners who don't reach the top bracket. That is before deductions.

The standard deduction is up to $12,000, so really it is more like $38,000 - $12,000 = $26,000 taxable income. Then 10%*$9,950 + ($26,000- 9,950)*12% =  $2,921. 

However, there are also some tax credits like the Lifetime Learning Credit or Earned Income Tax Credit that people take advantage of. So lets say you are a single-income head of household member with a spouse and a child and make that income. You'd qualify for the EITC and be able to get a negative income tax of about $2,921 - $3,618 = - $697. That means the Federal government owes you $697.  

On the other-hand, the state income tax is a flat (3.07 %) and local earned-income taxes average about 1.5% in Pennsylvania. Payroll taxes are also regressive (6.2% up to $147,000, 0% after $147,000; + 1.45% flat.) 

So basically the median head of household earner in Pennsylvania with one child and one spouse pays about $1,166 (Pennsylvania State Income Tax) + $570 (Local Income Taxes) + $2,907 (FICA -- Federal Payroll Tax) - $697 (EITC owed to family from federal government) = $3,946 per year. Or an effective tax rate of 10.4%. 

Of course, you need to consider that the payroll tax estimate doesn't include health-insurance costs (including premiums, deductible, copays), which could be another 19% of income for a family. So it roughly balances out compared to European countries when you account for healthcare. 

This doesn't include property/land value, sales taxes or capital gains, because I wanted to keep thinks relatively simple.  

Edit: 

Actually I used the individual income brackets, but a head of household has even more generous brackets and would pay even less tax than I calculated.  

$1465 + ($26000-14650)*.12 = $2827. After EITC that would be $2,827 - $3,618 = -$791 the federal government owes the head of household. 

I don't know, because I never look at it and I don't really care, but isn't this the same all over Europe anyway?

AUSTRALIA:

The above rates do not include the Medicare levy of 2%.

Don't know about individually, but corporate rates are definitely different in each European country. There is, or will be soon at least, a minimum, but the maximum is not set. I would assume the same holds for individuals.

Need to convert currencies into a single currency so they are directly comparable.

It's different per province. In Ontario, Canada it's

First CAD 45,142 ($35,662 / Euro 33,096) = 5.05%
CAD 45,142 to CAD 90,287 ($71,324 / Euro 66,194) = 9.15%
CAD 90,287 to CAD 150,000 ($118,495 / Euro 109,981) = 11.16%
CAD 150,000 to CAD 220,000 ($173,800 / Euro 161,312) = 12.16%
Over CAD 220,000 = 13.16%

This is on top of Federal tax

First CAD 49,020 ($38,723 / Euro 35,942) = 15%
CAD 49,020 to CAD 98,040 ($77,446 / Euro 71,887) = 21%
CAD 98,040 to CAD 151,978 ($120,059 / Euro 111,439) = 26%
CAD 151,978 to CAD 216,511 ($171,034 / Euro 158,760) = 29%
Over CAD 216,511 = 33%

That's on taxable income after deductions. Add Federal and provincial tax together to figure out how much you owe.
Min tax rate is thus 20.05% (after deductions, earn less than CAD 13,229 is no taxes), max tax rate is 45.16%

Sales tax is 13% in Ontario, most food items (basic groceries) are exempt from tax.

First Nations people get extra tax exemptions.

We pay about 44 cents tax per liter of gas. Independent of actual gas prices which are now about 2 dollars a liter
(was down to 75 cents a liter during the pandemic)

Then there is property tax which is about 1% of the value of what the county assesses your house at.

Sewer tax is included in the water bill, assuming all you use goes into the sewer... (You pay for sewer maintenance when watering your garden)


There's probably more but overall it's pretty good here, considering I moved here from The Netherlands.

I won't even try to calculate taxes in Brazil, they are far too complicated and mostly regressive, with heavy focus on products and a lot less severe on direct income

One of the reasons why I left Germany and went to Switzerland. In Switzerland you have about 10 % income tax if you earn 50k/year. The german taxes are insane.

No idea, whatever I owe to my gracious and beautiful State who definitely uses the money for the better is deduced directly from my salary.