UK taxes vs US taxes

[no name 1]

The US still offers tons of great opportunities.

I would agree with that entirely. I just think mawilson lived in the London of chimney sweeps and oliver twist whilst the rest of us had happy, comfortable existences.

[mawilson 2,133]

Between my employer and myself, my health insurance premiums are $950.00 a month - of which my employer funds a very significant portion but I would arguably see that portion in my compensation if the premiums weren't so fcuking outrageous. That comes, copays and all, to roughly $12,000.00 a year. Not so sure but that might be somewhere in the neighborhood of what we paid in federal income based taxes last year. So, my tax rate would actually be roughly twice what your calculation shows when it is to be meaningfully compared to a tax system that covers health insurance.

Is $12,000 close to 10% of your gross adjusted income? If so, you would

have paid the same in the UK.

Also, you're assuming that if your employer didn't have to pay for your health

insurance, you'd still get that money in compensation - and that's a big IF.

The US still offers tons of great opportunities.

I would agree with that entirely. I just think mawilson lived in the London of chimney sweeps and oliver twist whilst the rest of us had happy, comfortable existences.

Shut up, you Mexican fighting chicken.

[Dan J 277]

Between my employer and myself, my health insurance premiums are $950.00 a month - of which my employer funds a very significant portion but I would arguably see that portion in my compensation if the premiums weren't so fcuking outrageous. That comes, copays and all, to roughly $12,000.00 a year. Not so sure but that might be somewhere in the neighborhood of what we paid in federal income based taxes last year. So, my tax rate would actually be roughly twice what your calculation shows when it is to be meaningfully compared to a tax system that covers health insurance.

Is $12,000 close to 10% of your gross adjusted income? If so, you would

have paid the same in the UK.

Also, you're assuming that if your employer didn't have to pay for your health

insurance, you'd still get that money in compensation - and that's a big IF.

The US still offers tons of great opportunities.

I would agree with that entirely. I just think mawilson lived in the London of chimney sweeps and oliver twist whilst the rest of us had happy, comfortable existences.

Shut up, you Mexican fighting chicken.

The upper tax bracket rates are lower and will generally you will be better off if you are able to earn $150k or more, depending if your able to take business deductions or not. With the median income around $45,000 per year, most people would benefit more in a UK style system.

[Mr. Big Dog 10,747]

Between my employer and myself, my health insurance premiums are $950.00 a month - of which my employer funds a very significant portion but I would arguably see that portion in my compensation if the premiums weren't so fcuking outrageous. That comes, copays and all, to roughly $12,000.00 a year. Not so sure but that might be somewhere in the neighborhood of what we paid in federal income based taxes last year. So, my tax rate would actually be roughly twice what your calculation shows when it is to be meaningfully compared to a tax system that covers health insurance.

Is $12,000 close to 10% of your gross adjusted income? If so, you would

have paid the same in the UK.

Also, you're assuming that if your employer didn't have to pay for your health

insurance, you'd still get that money in compensation - and that's a big IF.

It's not really a big IF. We typically calculate on total comp basis.

Is 12K close to 10% of my AGI? Don't I wish.

[mawilson 2,133]

The upper tax bracket rates are lower and will generally you will be better off if you are able to earn $150k or more, depending if your able to take business deductions or not. With the median income around $45,000 per year, most people would benefit more in a UK style system.

Maybe, maybe not. Let's find out.

$45,000 per year = £22,500

UK taxes

Tax free allowances (filing status = single): £5,225

Total taxable: £17,275

UK income tax: £3,532.90

UK National Insurance tax: £1,903.00

Total UK taxes: £5,435.90 = $10,871.80 = 24.16% of gross adjusted income

Net wage UK: £17,064.10 = $34,128.20

US taxes

Withholding allowances: 1

Filing Status: single

Taxable income: $36,250

US income tax: $5,486

US Social Security tax: 6.2% = $2,790

US Medicare tax: 1.45% = $652.50

Total US taxes: $8,928.50 = 19.84% of gross adjusted income

Net wage US: $36,071.50

And the difference is: $1,943.30

I guess you're wrong.

[no name 1]

I thought we were including US health insurance costs?

Shut up, you Mexican fighting chicken.

and you are............?

[Trompe le Monde 1,107]

And the difference is: $1,943.30

I guess you're wrong.

I'm afraid it doesn't work unless you include state taxes - at 6% you'd actually be $757 dollars richer in the UK, at 4% you would be roughly even.

Never mind that you would have to pay taxes on any interest from savings, which you don't do in the UK

[mawilson 2,133]

I thought we were including US health insurance costs?

You thought wrong.

[Trompe le Monde 1,107]

I thought we were including US health insurance costs?

Shut up, you Mexican fighting chicken.

and you are............?

does a mexican fighting chicken wear a cool mask?

[mawilson 2,133]

I'm afraid it doesn't work unless you include state taxes - at 6% you'd actually be $757 dollars richer in the UK, at 4% you would be roughly even.

Never mind that you would have to pay taxes on any interest from savings, which you don't do in the UK

Regarding state taxes, I have to agree.

As for the interest from savings, you don't only up to a certain limit.

[no name 1]

and city taxes.

[mawilson 2,133]

and city taxes.

State and city taxes are deductible if you itemise your Federal deductions.

[Trompe le Monde 1,107]

[

As for the interest from savings, you don't only up to a certain limit.

true - but you can put up to 7k UKP tax free in an ISA which can be invested in stocks and shares and deliver some pretty tasty returns

also - federal short-term capital gains on stocks and shares is 35% in the US. In the UK it is 10%. Long term capital gains in the US is 15% - if you are not in the upper income tax band in the UK it is 10%

[Dan J 277]

And the difference is: $1,943.30

I guess you're wrong.

I'm afraid it doesn't work unless you include state taxes - at 6% you'd actually be $757 dollars richer in the UK, at 4% you would be roughly even.

Never mind that you would have to pay taxes on any interest from savings, which you don't do in the UK

Well if you include health insurance which could be anywhere from $2000-12000 per year depending on how much your employer pays and how large your family is. The UK starts to look rather attractive for those on the lower end of the income scale.

and city taxes.

State and city taxes are deductible if you itemise your Federal deductions.

If you have enough deductions to make it worth itemizing, otherwise it most people only take the standard deduction.

[no name 1]

I'm afraid it doesn't work unless you include state taxes - at 6% you'd actually be $757 dollars richer in the UK, at 4% you would be roughly even.

Never mind that you would have to pay taxes on any interest from savings, which you don't do in the UK

Well if you include health insurance which could be anywhere from $2000-12000 per year depending on how much your employer pays and how large your family is. The UK starts to look rather attractive for those on the lower end of the income scale.

Didn't you hear? We only include things that make the magic theory work!

I thought we were including US health insurance costs?

You thought wrong.