Income tax in the USA

[foibles]

So - in trying to compare income tax between Australia and the USA - and whilst admittedly there are far more variables at play with your tax system (such as State-based taxes, payroll tax, etc) - I get roughly the same amount of tax payable on an income of $100,000.

That is, in Australia, by and large an income (salary) of $100K will see an approximate income tax payable of $27,000 (however our system gets quite 'burdensome' much 'quicker' than yours...our top tax rate of nigh on 50% sets in at just $180K).

When I use one of the calculators a previous poster kindly supplied me with, I get about the same amount of income tax payable for a $100K income there in the US (notwithstanding the variables above).

It is curious to note that here in Australia it is the employer who is responsible for paying payroll tax, whereas in the USA it is the employee (the net effect of this is.....technically there is more tax paid on an income of $100K here in Australia - but the employee $27K....as noted above....whilst the employer also has to pay payroll tax...which varies between states, but would add a further $3000 or so).

At $200K, I get $63-65K tax payable here in Aus, and about $56K there in the USA.

I did not consider State taxes in this...because....they vary wildly!

By all accounts, we appear to be a high taxing nation, certainly more so than you are.

Gracias!

Foibles

[313Weather]

Originally Posted by foibles

So - in trying to compare income tax between Australia and the USA - and whilst admittedly there are far more variables at play with your tax system (such as State-based taxes, payroll tax, etc) - I get roughly the same amount of tax payable on an income of $100,000.

That is, in Australia, by and large an income (salary) of $100K will see an approximate income tax payable of $27,000 (however our system gets quite 'burdensome' much 'quicker' than yours...our top tax rate of nigh on 50% sets in at just $180K).

When I use one of the calculators a previous poster kindly supplied me with, I get about the same amount of income tax payable for a $100K income there in the US (notwithstanding the variables above).

It is curious to note that here in Australia it is the employer who is responsible for paying payroll tax, whereas in the USA it is the employee (the net effect of this is.....technically there is more tax paid on an income of $100K here in Australia - but the employee $27K....as noted above....whilst the employer also has to pay payroll tax...which varies between states, but would add a further $3000 or so).

At $200K, I get $63-65K tax payable here in Aus, and about $56K there in the USA.

I did not consider State taxes in this...because....they vary wildly!

By all accounts, we appear to be a high taxing nation, certainly more so than you are.

Gracias!

Foibles

Relatively speaking, compared to most 1st World Nations, the taxes in the US are extremely low. And that's including payroll/state/local taxes.

Even when it comes to business taxes, they're choke full of so many loop holes that many of them don't even pay the relatively high corporate tax rates. Instead, the bigger reasons many businesses have been shifting so much of their operations overseas is to avoid the US' high labor costs and government regulations (not taxes)...

As far as who pays payroll taxes (Social Security and Medicare Tax), the employer pays half of that tax and the employee pays the other half. Also, it is the employer's responsibility to withhold this money from your paycheck.