The top federal income tax rate in the United States is 39.6%, with a threshold of about $415,000 in income for a single filer. In much of Europe, the top rate is a few points higher—but it kicks in at much lower income levels. As for investment income, the capital gains rate in the U.S. is 20%, and 15% on the type of investment known as “carried interest.” In a few investor-friendly European countries—Switzerland, Luxembourg, the Netherlands—the capital gains rate is 0. But in most of Europe it ranges from 15% to 42%. And few countries have as many generous tax deductions as the United States. http://finance.yahoo.com/news/panama-papers-why-no-americans-193702690.html Seen through one lens, this whole scandal basically boils down to "World shocked to learn that rich people pay American tax rates."It turns out that rich Americans have less need for tax havens than their comrades elsewhere. “People in other countries pay a lot more in taxes than we do,” says international tax expert Lee Sheppard, contributing editor at Tax Analysts. “In other countries, nearly every rich person has a tax haven bank account. Proportionately, the United States doesn't have as large a problem.”
/spits coffee /Stares at paycheck 40% tax for everything over 42K... Damn! EDIT: some quick maths shows that someone earning 100K would take home 12K more per year if they lived in the US.The top federal income tax rate in the United States is 39.6%, with a threshold of about $415,000 in income for a single filer.
What's really going to bake your noodle is a concept called "maximum taxable earnings." If you make up to $118,500 a year, you pay 7.6% of your earnings to social security. If you make 118,600 a year, you pay 7.6% of 118,500. If you make $118,500,000.00 a year, you pay 7.6% of $118,500.00. When you hear about social security going bankrupt? Yeah, pretty easy fix.
Check out our USC http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/universal_social_charge.html Which is 8% of your gross salary if you earn 100K before they take the other 21/42% PAYE tax. Essentially half your salary goes to tax... It makes for interesting conversations when my US based co-workers make the occasional gripe about salary or cost of living, my heart bleeds for them.
I was wondering if you could lead me to literature on this part: I never thought of the argument like that and it makes sense the tax code really does favor the rich , so why ship off your money when you can just pay very little and look completely legit. I'm definitely on the boat with this slipping under the radar.And there are certainly a lot of American corporations that use tax havens to minimize tax liabilities, a different sort of problem.