Quote:
Originally Posted by aceventura3
You pay 14%? So, if a person in your situation makes $60,000/yr. they simply owe $8,400? What about social security and medicare? that is about another 15%, half paid by you and half paid by your employer, or $9,000. You pay state tax, property tax, sales tax, your employer pays unemployment insurance tax. At some point in the tax code you lose the full benefit of day care for children, child tax credit, IRA deduction, mortgage interest deduction. There is ATM. If you have medical expenses they are subject to a floor for deduction as are things like work related expenses. then there is the education credits or deductions. The average person spends hundreds of dollars to have their taxes done. Then of course we have the benefit of paying taxes each pay period before we know what our tax obligation actually is, and if it is wrong you could be subject to a penalty. Then there is a guy out there doing exactly what you do, making the exact same income and legally paying less tax because they have their situation structured different than yours. I could go on, this just scratches the surface...simple indeed.
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Actually a person earning $60,000 falls into a lower tax bracket. They only pay 8.5%. So their taxes for the year would be $5,100. There is no social saftey net here to speak of so there is no medicare, social security, etc. There is however a mandatory retirement scheme where you must put in a percentage of your earnings and your employer matches it (it's a sliding scale based on age and other things but roughly amounts to 10 to 14% by the employer and 14-20% by the employee). They comes directly off your payslip. Your taxes do not. You have the option to pay your taxes at the end of the fiscal year or to pay in interest free instalments throughout the following year.
There is also a consumption tax that is currently at 5%.
As I am not a citizen or a permanent resident, I do not have to contribute to the retirement scheme. I have a private one into which I contribute as much as I can.
Taxes are low. They are progressive. They are simplified to the extreme. This nation spends a lot (given its size) on its military and infrastructure and yet still has a sizable surplus. It's not perfect but it does show how a progressive tax can also be simple.
Flat taxes are not fair taxes.