Or rather why Europe pays so bad.
I wonder whats the reason behind many american companies being able to pay 200-400kusd a year while its hard to get past 100k usd in the richer countries of Europe (Germany, Scandinavia, UK, etc.). A junior in USA gets more than a senior in Europe. And after 10 years the american may get 2-4x the salary of the european counterpart. In contrast life in USA is often even cheaper.
- Are european companies greedy?
- Are european companies less competitive?
- Are the high taxes and equality in Europe pushing companies to not try harder to reward talent while USA rewards the high performers as they can see the benefits it brings?
Source? Everything I’ve read indicates Europe has 15-20% more taxes for the same income. The tax rate in California for $100k would be 27% (total) and a 7% sales tax. Europe seems to be in the 45-50% range depending on the country and a roughly 20% VAT. Even the tax rate in California on $400k would be lower than the tax rate in Europe on $100k.
45% is the absolute highest tax rate you can currently get you need a income of 277826€/year
Yes, we have higher social security Expenditures as well, but they pay back a lot more as well, they are paid 50/50 (Employer/Employee) and they are capped at some point (different for insurance and gets changed every year)
It has pros and cons, cost of living for example is a lot less.
So it’s higher than 45% in reality (for example I believe at $100k the social contributions would be twice as much as the tax). That 27% for California includes everything. If those taxes are worth it are a separate issue.
A person having that tax rate doesn’t pay social security anymore usually…
Thats the highest possible tax rate. Most are around 20% and i don’t think you know how taxes are calculated. You don’t pay 45% on your entire income either.
And no its not a separate issue. It all plays part here.