Few countries even in Europe will let your effective income tax rate reach 50% but this may be an effect of tax system structure more than anything else. Eg in the U.K. the max marginal income tax rate is 45% but that doesn’t count payroll taxes (employer or employee), which are called “national insurance”, or student loan “repayments” (9% of income above a threshold, though not super relevant to people in the top band), or oddities of the tax system like a somewhat hidden 60% marginal rate or a discontinuity with the married couples allowance or withdrawal of certain otherwise-universal benefits for children.
It is similar in other European countries (at least as far as I can tell from a cursory search showing that sources can’t really agree on what the highest marginal rate is).
I would be interested in seeing a chart of gross to net income and effective tax rate in different countries but this is hard (eg do you count employer payroll taxes? Do you count removal of state’s benefits that might not be used anyway? How do you deal with countries that have more complicated systems with eg deductions or allowances based on personal situations?)
All that said, I think the post you’re replying to could just mean “approximately half,” ands I think 40% would fit that description.
According to an official simulator for France [1], more than 50% of what is paid by the employer goes to taxes and "cotisations" when you earn more than €32k/year (USD $35k) after all taxes.
That was 50 years ago. The top rate was 75% for income over £20k (something like £250k in todays money). Now how many people were in this category, or how they managed to avoid appearing to have that much income I don't know.
I think income tax was even higher during WW2, but that's pretty much a special case.
Also in the UK. When you take into account the council tax and national insurance (extra income tax by another name), the effective tax rate for is easily above 50% for most "high earners". And that is without considering fuel duty, VED, VAT etc.
No, you'd have to be earning an enormous amount to pay 50% tax in the UK. If you earn e.g. £150k, you get to keep £90k. Only £7000 of the money withheld is NI, so NI doesn't make that huge of a difference. Council tax isn't going to cost you £15,000 a year [1], so you're pretty clearly keeping more than 50%.
[1] If you're paying £15,000 a year in council tax, you must have some kind of gigantic property whose maintenance costs would dwarf that figure anyway.
Gah, you're right, I accidentally added an extra zero to my council tax!
My effective rate is actually 40%, not 50%. (although this doesn't include VED, fuel duty, insurance tax, alcohol tax, tobacco tax, flight taxes, VAT or any of the myriad of little taxes here and there)
It is similar in other European countries (at least as far as I can tell from a cursory search showing that sources can’t really agree on what the highest marginal rate is).
I would be interested in seeing a chart of gross to net income and effective tax rate in different countries but this is hard (eg do you count employer payroll taxes? Do you count removal of state’s benefits that might not be used anyway? How do you deal with countries that have more complicated systems with eg deductions or allowances based on personal situations?)
All that said, I think the post you’re replying to could just mean “approximately half,” ands I think 40% would fit that description.