Stephen Hawking and the UK government-run health service

[Sparko]

Presumably awareness of taxation levels varies by country, and heavily depends on the extent to what type of taxes they are and how consciously a person has to pay them.

For example if a country requires a person to fill out a yearly tax return and write at the end of it "I have paid/owe: $X", then the person is going to be pretty aware of their taxes. Whereas here, most of the time the taxes are just taken out of the person's paycheck automatically and they never need to fill out any tax returns, so they may not be directly aware of how much they are paying in tax - although anyone who wants to know can easily look up the rates (e.g. I know that here progressive income taxes scale from ~10% to ~33%, and there's a 15% sales tax).

While if there are taxes built into the prices of particular items, e.g. gas/petrol or alcohol etc the person may not have much of an idea of how much they are paying in taxes. e.g. I know there is a road user tax built into the petrol price here, but I have zero clue what it is.

Do you have local taxes too in NZ? Here we have city taxes, state taxes, and federal taxes. And states also have sales tax (most states do. usually about 6%) - the local, state and federal taxes are taken out of your paycheck, but once a year you have to file a tax return, showing how much you paid in, and compare that to what you owe, minus deductions and then either pay in the difference or get paid back any excess. After all of the taxes I usually end up paying at around a 25% tax rate and I am pretty middle of the road.

What is the final tax rate in NZ for a middle class income?

[Roy]

Do you have local taxes too in NZ? Here we have city taxes, state taxes, and federal taxes. And states also have sales tax (most states do. usually about 6%) - the local, state and federal taxes are taken out of your paycheck, but once a year you have to file a tax return, showing how much you paid in, and compare that to what you owe, minus deductions and then either pay in the difference or get paid back any excess. After all of the taxes I usually end up paying at around a 25% tax rate and I am pretty middle of the road.

Clearly you are an irregular person.

[Sparko]

Clearly you are an irregular person.

why?

[Zymologist]

why?

And here we have Sparko, asking why he's irregular.

*snicker*

[Roy]

why?

Because you are aware of how much tax you pay. Were you not paying attention?

[Sparko]

Because you are aware of how much tax you pay. Were you not paying attention?

Ah. Sorry. I lost track.

I believe she meant most people don't know what their taxes are spent on, like how much would go to pay for universal health care. I don't know off hand how much of my taxes go to what projects. I could look it up.

[rogue06]

I'm very skeptical of this claim. Companies almost always only pay tax on profits not their income/sales. So there isn't actually a cascade of taxes.

Every step of the way the government is collecting taxes.

[rogue06]

I think rogue means that companies also pay tax on material they purchase, which may be passed on as higher prices. But I wouldn't consider this as being tax paid by their customers.

Why not? The customer is, for all intent and purposes, paying for it.

[Sparko]

Why not? The customer is, for all intent and purposes, paying for it.

most materials used in manufacturing are actually tax-deferred. At least sales tax. and they can usually write off supplies used in business. But businesses to have to pay things like payroll taxes.

[rogue06]

Because you are aware of how much tax you pay. Were you not paying attention?

I doubt very much there are more than but a handful of people who know how much taxes they pay. Sure, folks can look at their paycheck and see how much income tax they paid on what they earned at their job(s), but does anyone really have even a clue at how much sale tax they paid? My property tax (as well as home owners insurance) is all rolled into my mortgage so I'd have to do some digging to figure out how much of that tax I pay.

[rogue06]

most materials used in manufacturing are actually tax-deferred. At least sales tax. and they can usually write off supplies used in business. But businesses to have to pay things like payroll taxes.

It isn't just taxes on material that is involved here. For instance the taxes paid for transporting a product are figured into the cost of the product as well. Give me five minutes and I probably could rattle off over a dozen such "hidden taxes"



Hidden taxes

10 hidden taxes you didn't know you're paying

[Mountain Man]

I doubt very much there are more than but a handful of people who know how much taxes they pay. Sure, folks can look at their paycheck and see how much income tax they paid on what they earned at their job(s), but does anyone really have even a clue at how much sale tax they paid? My property tax (as well as home owners insurance) is all rolled into my mortgage so I'd have to do some digging to figure out how much of that tax I pay.

Yep, it's a lot. I know Jesus said to give to Caesar what belongs to Caesar, but I often wish Caesar didn't ask for so dang much!

[Starlight]

Do you have local taxes too in NZ? Here we have city taxes, state taxes, and federal taxes.

We don't have states here, so there are only federal (national) taxes and city (local) taxes. City taxes are called 'rates' and are property taxes paid on land value and they vary by city (internet says $38 USD per week is the average rates charge across the country). Sometimes water usage is also charged, though not in my city (quite a few water-bottling companies seem to make use of this to take bazillions of gallons of free pure water from the aquifers, put it into bottles and sell it internationally ~sigh~).

once a year you have to file a tax return, showing how much you paid in, and compare that to what you owe, minus deductions and then either pay in the difference or get paid back any excess. After all of the taxes I usually end up paying at around a 25% tax rate and I am pretty middle of the road.

Most people here do not file tax returns because the tax is automatically deducted from their paycheck as they earn the money.

Sadly I have to file a tax return yearly because I was silly enough to publish a book and thus have international sources of income in other currencies that have been taxed by other governments with reciprocal tax agreements with my government and I have to calculate a few numbers and staple some evidence to the tax return and fill in a few boxes as a result. Usually takes me about an hour a year.

What is the final tax rate in NZ for a middle class income?

A person on median income would pay 15.5% income tax, a sales tax of 15% on any purchases, and whatever 'rates' were charged by their local council on property (average looks to be around 4% of median income).

Also let me introduce you to the handy dandy OECD statistics website that can tell you almost anything you want to know about OECD countries.
e.g. total taxation as a percentage of GDP:
Australia 28%
Canada 32%
Denmark 46%
NZ 32%
UK 33%
US 26%
OECD average 34%

After all of the taxes I usually end up paying at around a 25% tax rate and I am pretty middle of the road.

From OECD above: US 26%.
Yes, it does look like you are pretty representative of your country's taxpayers. Although the OECD figure will include company taxes too.

[Starlight]

Yep, it's a lot. I know Jesus said to give to Caesar what belongs to Caesar, but I often wish Caesar didn't ask for so dang much!

The US has significantly lower taxes than most other OECD countries.

And furthermore countries do seem to do better when their taxes are higher. Denmark is the happiest country in the world, and has taxes nearing 50% of GDP, almost double the US taxation. There's a correlation among OECD countries between higher taxation and greater happiness.

All the data I have looked at leads me to believe that doubling the US taxation rates (and increasing government spending correspondingly) would significantly improve the country and people's happiness therein. I find it amusing you complain about Caesar demanding too much when I think the optimal course of action would be to approximately double your taxes. All the international data I have looked at, implies as far as I can see, that the optimal amount of government is around 50-50 public-private, with the government taking/spending 50% in taxes and paying for public services, and the other 50% being spent by private individuals.

One could argue that that puts me precisely half-way between fully libertarian no-government 100% private free market anarchy, and 100% state-run communism, and that therefore at 50-50 on the public-private split I am a perfect centrist on the political scale. As a centrist, I think your taxes should be doubled. (Well, okay, you in particular, I would quadruple your taxes, and it would be the "MM should pay higher taxes, just because it annoys him" bill)

Also bear in mind that higher taxes are not necessarily a net loss of money on your part. e.g. if by taking in taxes the government can efficiency provide free healthcare for everyone like it does here at a lower cost per person than what you guys pay in the US to wasteful private healthcare insurance companies that pocket a lot of that money in profits and then fight you and the hospitals over the bill and what procedures can be done, then you net save money.

[Sparko]

We don't have states here, so there are only federal (national) taxes and city (local) taxes. City taxes are called 'rates' and are property taxes paid on land value and they vary by city (internet says $38 USD per week is the average rates charge across the country). Sometimes water usage is also charged, though not in my city (quite a few water-bottling companies seem to make use of this to take bazillions of gallons of free pure water from the aquifers, put it into bottles and sell it internationally ~sigh~).

Most people here do not file tax returns because the tax is automatically deducted from their paycheck as they earn the money.

Sadly I have to file a tax return yearly because I was silly enough to publish a book and thus have international sources of income in other currencies that have been taxed by other governments with reciprocal tax agreements with my government and I have to calculate a few numbers and staple some evidence to the tax return and fill in a few boxes as a result. Usually takes me about an hour a year.

A person on median income would pay 15.5% income tax, a sales tax of 15% on any purchases, and whatever 'rates' were charged by their local council on property (average looks to be around 4% of median income).

Also let me introduce you to the handy dandy OECD statistics website that can tell you almost anything you want to know about OECD countries.
e.g. total taxation as a percentage of GDP:
Australia 28%
Canada 32%
Denmark 46%
NZ 32%
UK 33%
US 26%
OECD average 34%

From OECD above: US 26%.
Yes, it does look like you are pretty representative of your country's taxpayers. Although the OECD figure will include company taxes too.

OK so it doesn't look like the social health care is adding too much to the tax rate, contrary to what I had thought. About 8% if we figure everything else is approximately equivalent and go by the average OECD. So if I take what I pay for health insurance and my yearly deductible, that comes out to about 8% of my take home pay.

So, about the same for me either way. Assuming I use enough of my healthcare to have to pay in the total deductible. Which I usually do. Getting old sucks.