top | item 46631285

(no title)

dgroshev | 1 month ago

The biggest problem is that the tax on a median taxpayer is not just "middling", it's a bit over a third of what a median German taxpayer is paying. The rest of the fiscal problems (convoluted tax rules, cliff edges to try to claw something back, abrupt tax increases like the one on pubs) are downstream from that.

discuss

order

pjc50|1 month ago

> the tax on a median taxpayer is not just "middling", it's a bit over a third of what a median German taxpayer is paying

Could you put the actual numbers in for that please, because to me that implies German tax rates of 120%? Is that across all forms of taxation, including local (the relevant one here!)

dgroshev|1 month ago

Apologies, brain glitch: it's half, not third. Also, I'm talking about the effective tax rate, not the marginal tax rate. Here are the numbers:

Median salary of a full time employee in the UK in 2023 (to match the German source): £34,963 [1]

Take home on that salary (after income tax and NI): £28,692 [2]

Effective tax rate on a median salary in the UK: ~18%

Median salary of a full time employee in Germany: €4,479 pm [3] or €53,748 per year

Take home: €34,281 [4]

Effective tax rate on a median salary in Germany: ~36%

Tax _rates_ are not that different, but the previous British governments really ramped up the tax-free allowance, which significantly reduces the effective tax rate.

[1]: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwor...

[2]: https://www.thesalarycalculator.co.uk/salary.php

[3]: https://www.destatis.de/EN/Themes/Labour/Earnings/Earnings-E...

[4]: https://salaryaftertax.com/de/salary-calculator