[Aliblahba]

(02-25-2014 01:01 PM)WestCoast Wrote:  

DaveR you are also spot on. Calling it a break is pretty dumb, everyone needs to own a company these days for shelter.

I'm dumb, explain it to me please.

[WestCoast]

Alib all he is saying is your life is shittier than a Canadians set up (ie us government sucks, and he is right).

Ronnie I know how a tax system works don't make me laugh. I am saying if the 60K and 40K person file separate what you do is you give all the deductions to the 40K filer to push down the tax rate of the combined couple.

Take a house. Who has their name on the house etc. This is very basic tax filing info for anyone who has properly done their taxes.


How about this incredibly obvious one too if it is a 60/40 and you live under the same roof?

You max out the 401K comp on the lower person so now he/she is well below the bracket and the higher income earner only contributes his company match.

You cannot do this manipulation as a married couple. This should be obvious.

Being single is better.

[Vicious]

It seems incredibly counter intuitive for a government to tax couples more than singles.

In just about every aspect it is better from a societal viewpoint to clump people together in civil unions. Which something most of Europe's nations gets behind and give tax breaks for the married.

[WestCoast]

^ is it really counter intuitive?

Look at what happened on this thread this is above average intelligence and people just looked at the numbers and said "it must be true because I read it on bbc!" Average people can't even understand a gross versus net number on a tax basis when it comes to their w2.

Really what they are doing is trying to find ways to tax you more because 80%+ of all people will be married at some point. May as well steal money from you right?

Go talk to anyone who makes good money all of them will tell you it's worse to be married than single from a tax basis. You lose mobility = sitting duck.

[RonnieB]

I've looked on the OECD site which the BBC article is based on to get some more information. Here's a chart from their site

The OECD average tax wedge for a one earner couple with two children was 26.1% of the total labour cost in 2012. This figure was 9.5 percentage points lower than the one observed for the individual without children (please click on the link "Comparison of total tax wedge by family type"). In fact, many OECD countries provide a fiscal benefit to the former through advantageous tax treatment and/or cash transfers.

Tax wedge by family type in 2012
As a % of labour costs

[WestCoast]

^ same answer man. Place the deductions on the lowest earner (give them the 2 kids on paper) and you are better off.

I don't know why you're fighting the math, this is a good thing for you. Don't get married.

Notice they tricked you again "one wage earner". Okay how many people are actually in single wage earning families? Practically none these days.

Marriage is just a tax on the middle class.

[Hencredible Casanova]

(02-25-2014 12:21 PM)Aliblahba Wrote:  

(02-25-2014 11:08 AM)RonnieB Wrote:  

Yeah that sucks. Governments taxing you to try and discourage you from working overseas. A single American working overseas gets a triple hit. Tax from the country they are working in, tax to the US government, extra tax rate to finance married people.

Americans get substantial overseas tax break. It's around $98K yearly I believe (goes up every year). You still pay into social security, but those even top out too. This is a HUGE incentive to work for a U.S. firm abroad and stay out of country 330 days out of a 365 day time frame.

The problem I believe comes from getting residency in another country. Now you are on paper in two places, and guvmints like revenue. It was never a problem though for defense contractors in war zones, cause were just there to whoop ass. It's nice to work for a powerhouse nation, and see a ~$30K tax return in the spring.

I totally forgot about that caveat. It's called Publication 54.

One of my boys has been living in Brazil and Thailand for the past decade. He was unintentionally paying taxes on his US income like he was still residing in the States.

He wasn't making serious bank or anything, just enough to support his remote lifestyle so he could train MMA, first in Thailand and then later in Brazil. This dude should join the forum actually just off lifestyle but he's not one of those social media/internet guys.

But he eventually realized he didn't have to pay all those taxes so his accountant submitted the necessary paperwork and he wound up getting a windfall check for over 10K.

Luckily, there's no expiration date to file a Pub 54 if you have a legitimate claim.

This is different from filing taxes and underreporting income, the IRS only has three consecutive tax years from the date of file to catch the mistake before the statute of limitations expires. Again, this is only the case IF you FILE.

If you don't file, the IRS can come after you anytime, hence all those celebrities we hear about getting caught for income not reported from decades ago.

[RonnieB]

Tax wedge is not a straightforward calculation - It's defined here http://www.oecd.org/ctp/tax-policy/Definitions.docx if anyones interested.

Directly or indirectly single people without children are financing those that are married with children.

Young guys being penalised and paying for others.

[WestCoast]

^ again no.

All you are saying is that you don't want to pay for a tax deduction for someone else's kid. That is fine but you are not paying a higher tax rate than a married person.

If you are married you just fucked yourself for tax purposes.

I also don't want to pay for another person to have kids because I think most of people 90% are too stupid to deserve to have kids. But I am also a dick.

That said married people are so unaware of their tax structure they are paying MORE into the system and likely destroy any benefit of the child deduction over time. Particularly if they are at least moderately successful and net $150K plus combined.

[DaveR]

(02-25-2014 01:10 PM)Aliblahba Wrote:  

(02-25-2014 01:01 PM)WestCoast Wrote:  

DaveR you are also spot on. Calling it a break is pretty dumb, everyone needs to own a company these days for shelter.

I'm dumb, explain it to me please.

Didn't intend to call you dumb.. my point was that Congress sells that "tax break" as something generous to American citizens who live/work abroad. The reality is that no other country taxes their non-resident citizens at all (except a few tin-pot dictatorships).


So for someone who works in a low-tax zone like Dubai, Hong Kong, Singapore, Russia, most of Eastern Europe, etc...

- Everyone has to pay whatever local tax is due on their income in the country they're living in. In the aforementioned countries it's usually 0-15%.

- Non-US citizens have nothing else to worry about - they don't have to file and don't owe any tax to their country of citizenship if they don't live there.

- Americans have to pay US tax on employment income over $98k, and also capital gains and other taxes on non-employment income (so-called "non-earned" income).

- Fortunately, if the US has a tax treaty with the country you're living in, you can deduct the local taxes that you've paid from whatever you may owe the IRS.

- However, if the US hasn't entered into a tax treaty, then you're screwed because you also have to pay US tax on the same income. In other words, you would be taxed twice on the same dollar.

[RonnieB]

(02-25-2014 01:53 PM)WestCoast Wrote:  

^ same answer man. Place the deductions on the lowest earner (give them the 2 kids on paper) and you are better off.

I don't know why you're fighting the math, this is a good thing for you. Don't get married.

Notice they tricked you again "one wage earner". Okay how many people are actually in single wage earning families? Practically none these days.

I'm not fighting the maths. One wage earner should be the worst possible split for married couples as its way below the $36,900/$63,100 income split. They used the worst case situation in terms of US income tax

But the tax paid by single people is indirect, in the end they are financing the families.

The tax wedge is measure of the difference between labour costs to the employer and the corresponding net take-home pay of the employee – which is calculated by expressing the sum of personal income tax, employee plus employer social security contributions together with any payroll tax, minus benefits as a percentage of labour costs.

So it's not always paid directly by the single people in the form of income tax but we are paying for it!

[WestCoast]

^ dude we are directly paying for their tax deductions just like I am directly paying more into the tax system because I have high earnings.

50% of people don't even pay any taxes. So I don't see where you're going.

If you're pissed you are paying for someone else's meals and families... Join the club.

But effective taxes are better as a single filer (couple - assuming both work) if you have half a brain when it comes April 15th.

[Aliblahba]

WHAT THE FUCK!!!

I'm actually with WC on this*. And DaveR, I know you didn't call me dumb, brother. All is good on this thread. Taxes is just a touchy point when you see SO much come in, and SOOO much go back out. Fucking taxman.




*Doesn't happen often.


**Preview Post- Keep trying to keep up. You guys are fast on the draw.

[RonnieB]

Haha I don't really give a flying fuck about the US tax rates. I really wanted to talk about single people around the world financing families not focus on just the US income taxes.

The OECD report says that single people pay more contributions to the goverment on average (indirect + direct). I stand by the OECD report.

I agree with Ali, fucking taxman

[Akula]

(02-25-2014 12:21 PM)Aliblahba Wrote:  

(02-25-2014 11:08 AM)RonnieB Wrote:  

Yeah that sucks. Governments taxing you to try and discourage you from working overseas. A single American working overseas gets a triple hit. Tax from the country they are working in, tax to the US government, extra tax rate to finance married people.

Americans get substantial overseas tax break. It's around $98K yearly I believe (goes up every year). You still pay into social security, but those even top out too. This is a HUGE incentive to work for a U.S. firm abroad and stay out of country 330 days out of a 365 day time frame.

The problem I believe comes from getting residency in another country. Now you are on paper in two places, and guvmints like revenue. It was never a problem though for defense contractors in war zones, cause were just there to whoop ass. It's nice to work for a powerhouse nation, and see a ~$30K tax return in the spring.

The point around the "substantial US Tax Breaks" is simply that no other major country taxes its citizens AT ALL on overseas income. So if you are not American and from some other country working abroad you just pay the local taxes in whatever country you're working in. The Brits, Aussies and pretty much whoever don't even have to declare overseas income. So the US really only gives you a very minor break (up to the $97k level) and if you make more than that you're paying taxes over and above what you pay in Russia, Dubai, Saudi Arabia, etc.. That's a total outlier and ridiculous (especially if you are earning local currency income).

The Russian rate seems off. It's a flat 13% that's it (and 30% if you're a non-resident, as I just painfully found out on my 'severance' paycheck!!).

Edit: oh I get it, it's the inverse of the actual taxes so it's 87% of take home pay for example in Russia.

If that's the case, NYC is off...I know for a fact I paid over 45% when I was there (breakdown was something like 36% Federal, 3-4% City and 7-8% State tax I believe).

As a single guy I think I should pay less taxes than married couples with kids, just because I use much less of the system than they do (but still have to pay for all the things like schooling that I don't actually use).

[Vicious]

WC, the interesting thing is the different philosophies in the US and European tax legislation on marriage. One provides an incentive while the other exploit the least common denominator.

[Akula]

Wait a minute the whole study is flawed as they say this is the methodology:

"For each country, they calculated how much a high earner on a salary of $400,000 (£240,000) in 2013, with a mortgage of $1.2m (£750,000), would have left after all income tax rates and social security contributions."

So they are excluding state, local and even sales taxes. And in Europe, Canada and a large part of the world they are excluding VAT too (!!). That is a TON of money and taxes. And I'm sure there are all sorts of other things that dramatically increase the tax burden in many places (like Council tax & NHS taxes in the UK (I would think)).

And so it seems like they aren't counting all the taxes citizens pay and (I guess) thus trying to make it look better than it is?? Not surprised given it's the left-leaning BBC but come on...that's real money we all pay out of our pocketbooks.

[DaveR]

(02-25-2014 01:57 PM)RonnieB Wrote:  

Tax wedge is not a straightforward calculation - It's defined here http://www.oecd.org/ctp/tax-policy/Definitions.docx if anyones interested.

Directly or indirectly single people without children are financing those that are married with children.

Young guys being penalised and paying for others.

Ronnie, the guys who are getting tax breaks for being married are the ones whose wives don't work. They're taking it up the ass just as hard by subsidising their too-lazy-to-work wives.

[Hencredible Casanova]

(02-25-2014 03:03 PM)Akula Wrote:  

(02-25-2014 12:21 PM)Aliblahba Wrote:  

(02-25-2014 11:08 AM)RonnieB Wrote:  

Yeah that sucks. Governments taxing you to try and discourage you from working overseas. A single American working overseas gets a triple hit. Tax from the country they are working in, tax to the US government, extra tax rate to finance married people.

Americans get substantial overseas tax break. It's around $98K yearly I believe (goes up every year). You still pay into social security, but those even top out too. This is a HUGE incentive to work for a U.S. firm abroad and stay out of country 330 days out of a 365 day time frame.

The problem I believe comes from getting residency in another country. Now you are on paper in two places, and guvmints like revenue. It was never a problem though for defense contractors in war zones, cause were just there to whoop ass. It's nice to work for a powerhouse nation, and see a ~$30K tax return in the spring.

The point around the "substantial US Tax Breaks" is simply that no other major country taxes its citizens AT ALL on overseas income. So if you are not American and from some other country working abroad you just pay the local taxes in whatever country you're working in. The Brits, Aussies and pretty much whoever don't even have to declare overseas income. So the US really only gives you a very minor break (up to the $97k level) and if you make more than that you're paying taxes over and above what you pay in Russia, Dubai, Saudi Arabia, etc.. That's a total outlier and ridiculous (especially if you are earning local currency income).

The Russian rate seems off. It's a flat 13% that's it (and 30% if you're a non-resident, as I just painfully found out on my 'severance' paycheck!!).

Edit: oh I get it, it's the inverse of the actual taxes so it's 87% of take home pay for example in Russia.

If that's the case, NYC is off...I know for a fact I paid over 45% when I was there (breakdown was something like 36% Federal, 3-4% City and 7-8% State tax I believe).

As a single guy I think I should pay less taxes than married couples with kids, just because I use much less of the system than they do (but still have to pay for all the things like schooling that I don't actually use).

Are individuals in European and other countries obligated to file yearly taxes while living in their own countries? Do governments there have an income tax collection system like the US?

[Alpha_Romeo]

(02-25-2014 04:14 PM)Hencredible Casanova Wrote:  

Are individuals in European and other countries obligated to file yearly taxes while living in their own countries? Do governments there have an income tax collection system like the US?

If you're just a regular employee at a company, then your company does it for you. There may be special circumstances where you would file a refund at the tax office (for example, you are paying a home carer to look after a sick child, parent, etc.). But most salaried employees apply for any applicable credits, and their respective companies's HR departments take care of the rest.

[Hencredible Casanova]

(02-25-2014 04:40 PM)Alpha_Romeo Wrote:  

(02-25-2014 04:14 PM)Hencredible Casanova Wrote:  

Are individuals in European and other countries obligated to file yearly taxes while living in their own countries? Do governments there have an income tax collection system like the US?

If you're just a regular employee at a company, then your company does it for you. There may be special circumstances where you would file a refund at the tax office (for example, you are paying a home carer to look after a sick child, parent, etc.). But most salaried employees apply for any applicable credits, and their respective companies's HR departments take care of the rest.

Thanks. That's what I thought.

[paninaro]

(02-25-2014 02:06 PM)DaveR Wrote:  

Didn't intend to call you dumb.. my point was that Congress sells that "tax break" as something generous to American citizens who live/work abroad. The reality is that no other country taxes their non-resident citizens at all (except a few tin-pot dictatorships).


So for someone who works in a low-tax zone like Dubai, Hong Kong, Singapore, Russia, most of Eastern Europe, etc...

- Everyone has to pay whatever local tax is due on their income in the country they're living in. In the aforementioned countries it's usually 0-15%.

- Non-US citizens have nothing else to worry about - they don't have to file and don't owe any tax to their country of citizenship if they don't live there.

- Americans have to pay US tax on employment income over $98k, and also capital gains and other taxes on non-employment income (so-called "non-earned" income).

- Fortunately, if the US has a tax treaty with the country you're living in, you can deduct the local taxes that you've paid from whatever you may owe the IRS.

- However, if the US hasn't entered into a tax treaty, then you're screwed because you also have to pay US tax on the same income. In other words, you would be taxed twice on the same dollar.

Here is the list of all countries the US has a tax treaty with. Indeed some of the lower-tax countries you mentioned aren't on there, but a lot of EE countries are, including Russia, Ukraine, Belarus, and the Baltics.

The bottom line (at least as I see it) is a US citizen will never pay more income tax than they paid while living in the US, unless they move to a country with a higher tax rate than they were paying in the US. So the only way they'll be worse-off tax-wise is if they move to a country with a higher tax rate.

[DaveR]

(02-25-2014 11:35 PM)paninaro Wrote:  

Here is the list of all countries the US has a tax treaty with. Indeed some of the lower-tax countries you mentioned aren't on there, but a lot of EE countries are, including Russia, Ukraine, Belarus, and the Baltics.

The bottom line (at least as I see it) is a US citizen will never pay more income tax than they paid while living in the US, unless they move to a country with a higher tax rate than they were paying in the US. So the only way they'll be worse-off tax-wise is if they move to a country with a higher tax rate.

You are correct, but you've missed the point. Look at Russia for example, where the tax rate is between 6% and 13% depending on what kind of income you have. US citizens have a debt to the IRS if their salary is over $98k or if they have any non-salary income. Here's the kicker: Citizens of other countries owe nothing to their passport country's tax department, ever. They don't even have to file because their tax departments only have jurisdiction over resident citizens, not those who live abroad.

[jimukr104]

(02-25-2014 03:55 PM)DaveR Wrote:  

(02-25-2014 01:57 PM)RonnieB Wrote:  

Tax wedge is not a straightforward calculation - It's defined here http://www.oecd.org/ctp/tax-policy/Definitions.docx if anyones interested.

Directly or indirectly single people without children are financing those that are married with children.

Young guys being penalised and paying for others.

Ronnie, the guys who are getting tax breaks for being married are the ones whose wives don't work. They're taking it up the ass just as hard by subsidising their too-lazy-to-work wives.

yeah like i did..but a one earner family deserves the same exemption as 2 single earners..otherwise its a marriage tax.
That being said..seems Ireland is good for families.

[Suits]

I have no problem with incentivizing people to raise children in a healthy two parent living environment.

I have a huge issue with incentivizing single motherhood.

But then again, it isn't like I pay income tax anyway at the present.