So how bad are French taxes? (title is ironic)

[dsc]

After watching Sicko and what France provides to its people I decided to see what a middle class family would pay in taxes. First, lets look at a US family.

Say you have a family of two adults and two children making the US median income. From this link http://www.infoplease.com/ipa/A0104688.html the median household income for a married family is $66,607. In the US such a family would have $66,607 - $13,200 = $53,407 in taxable income link http://www.wwwebtax.com/miscellaneous/exemptions.htm

From this link: http://www.irs.gov/formspubs/article/0,,id=150856,00.html we can calculate the tax as follows.

We use $1510.00 plus 0.15 ($53,407 - $15,100) which is $1510 + 0.15($38,307) or $1510 + $3830.7 + $1915.35 = $7256.05 Finally that family will pay 7.65% of their total income $66,607 (0.0765)= $5095.44 for a total federal tax burden of $12,351.49.

Using this link http://articles.moneycentral.msn.com/Taxes/Advice/TheBestAndWorstStatesForTaxes.aspx?page=2 (look at chart) we see Kansas is the median state in terms of state taxes and that it levies 10.7% of total income. Total taxes $7126.95. Grand total $19478.44

So what would a similarly situated French family pay? First we need to convert from dollars to euros. http://www.xe.com/ucc/convert.cgi $66,607 is 49,482.64 euros.

All further figures come from this link http://www.dixonwilson.co.uk/downloads/2007 French Tax Data Card .pdf

Income taxes 921 + 14% of 49,482.64 - 33,594 or 921 + 0.14(15,888.64) or 921 + 2224.41 or 3145.41
Social Security is 22% 0.22(49,482.64) = 10886.19
Value added tax 5.5% on food, books, hotels, etc and 19.6% on other goods. Here we have to make some assumptions. First assume that 75% of a person's income is spent on things exclusive of housing and other exempt activities. Further assume that 10% are spent on activities at the lower rate. That leaves 65% at the higher rate. That gives us 49,482.64(.1)(.055) + 49,482.64(.65)(.196)= 6576.24
The only other federal tax is a wealth tax but one has to have a net worth of 760,000 euros with 20% of a house being exempt. That would be over a million US dollars. Unlikely to hit the usual French person.
Total federal taxes 20607.84 in dollars $27,746.29
Local taxes were unable to be found but only consist of a apartment tax. Let's call it $3000. Total taxes $30,746.29.

Difference in taxes $11,300. For that money French tax payers get totally free health care, totally free higher education, 6 months paid maternity leave, 100% disability income protection and a host of other benefits. For the record group insurance for a family of four easily costs the whole $11k all by itself. link http://www.nchc.org/facts/cost.shtml

I would take the deal.

[judaspriestess]

1. I probably would too

n/t

[alarimer]

2. We have sales taxes too, plus most states tax income as well

So I think the difference is not as great, but most people also pay part of their paycheck to insurance, as you said. My guess is that whatever the French pay, it is more than worth it not to have to worry about whether a medical bill will bankrupt you. Even with insurance, most of the time it only covers 80%, which could still get very expensive.

[dsc]

6. I used the median state for total state tax burden

milage will vary for your state. But that is intended to take care of all state and local taxes.

[BlooInBloo]

3. For all-i-can-eat health care? Deal!

[flyingfysh]

4. you get what you pay for

Taxes are the admission price for living in a civilized society. I would take the French system anytime.

[EVDebs]

43. The missing $2.3 Trillion at DoD could pay for most of this...

War On Waste
Defense Department Cannot Account For 25% Of Funds — $2.3 Trillion

http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

"
"According to some estimates we cannot track $2.3 trillion in transactions," Rumsfeld admitted.

$2.3 trillion — that's $8,000 for every man, woman and child in America. To understand how the Pentagon can lose track of trillions, consider the case of one military accountant who tried to find out what happened to a mere $300 million.

"We know it's gone. But we don't know what they spent it on," said Jim Minnery, Defense Finance and Accounting Service. "

But DUers, why just France ? The stats on best standard of living says that Scandinavian countries have it the best, from what I've heard, Norway in particular

Norway still the world's best place to live
http://www.aftenposten.no/english/local/article828724.ece

[WinkyDink]

5. Whatever the case is: They live in FRANCE! And it's hop-skip to the REST of Europe!

Sitting in a cafe in France isn't like going to the MickeyD's in Podunk, USA.
Not that there aren't any McDonald's in Paris; just sayin'!

[unpossibles]

49. yeah, but the McDonalds in France also sell beer

so even they are better.

[Lex]

7. Not just a good deal for health care. Their whole social safety net

for people is way better.

Not to mention their schools, roads, and infrastructure in general is superior to ours which is crumbling.

[ikojo]

19. Also, in France whenever the government thinks

about doing away with social programs the people get out into the streets, ON A BUSINESS DAY, and they INCONVENIENCE people. The country has been brought to a halt on account of demonstrations.

In the US, we get permits (i.e. permission from the very people we are protesting) and do the middle class nice thing and protest on a weekend day so as not to inconvenience anyone. Isn't that nice? :sarcasm:

My motto: DIRECT ACTION GETS THE GOODS!

If anti war protests were held on a WEEKDAY when there are actually more humans in DC, especially around the capitol area, there is no way the demonstration could be ignored. Traffic would be blocked and people would be inconvenienced.

THAT is what it will take!

[rurallib]

8. So if you add to the $19,500 health insurance + deductables

+ dental insurance + deductables + cost of college tuition + cost of drug insurance or drugs + sales taxes + property taxes and other stuff I am sure I missed we would get a real picture of what an American pays.
I can only make some wild guesses as to what each costs, but I believe most family insurances are @ $10,000 (oh I forgot what the employer pays) + $2500 deductable. College probably @ (cheap, local community college) $8,000. Property taxes @ $3,000. Sales Taxes maybe another @$750? dental @ $1000?
$19,500 + 10,000 + 2,500 + 8,000 + 3,000 + 1,000 + 750 = @44,750. Have a nice day.

[Hieronymus]

27. In France, dental is not included .. but I'd live there for sure.

[Pooka Fey]

52. Dental is included. I live here and I had a broken filling replaced for free.

I had to wait 6 weeks to get an appointment to replace it, however when the temporary bandage that the dentist put on to tide me over fell off, she got me in right away to replace the bandage. All free.

On the other hand, every time I've needed to see the doctor, I can get in that same day or the next day.

[wakeme2008]

9. If you assume the family is lucky enough to have a medical plan through work

that would add around $500 per month or $6,000. Not counting the out of pocket for that medical.

[yes2truth]

10. I wish you had framed this in the positive.

Any number of ways it could have been done:

"Benefits of French Tax System"

"Taxpayers in France Better Off Than Those in U.S."

Wouldn't a more positive subject line attract more readers to this very important, interesting post?

[dsc]

11. I meant the title ironicly

[baldguy]

12. For many RW nuts taxes = theft

If they don't specificly agree to it and/or benifit directly from it, then they think you're stealing something from them.

[hfojvt]

13. a couple of mistakes on the American side

You forgot the standard deduction. For a married couple that is $10,300. Leaving an AGI of $43,107 which the tax table tells me is a tax of $5,739. They can knock that down to $4,539 if they maximize their contribution to their IRA at $8,000. They may also be able to itemize deductions - deducting things like property taxes, health insurance premiums, etc. Key, however, is a $2,000 tax credit for their two children. Thus, leaving out IRAs and itemized deductions, their tax bill is no more than $3,729. (about the same as that of a single, childless person with $35,950 in total income).

Second, going the other way, there is the other half of FICA. You would be correct to object that the employer pays that part. However, if the employer did not pay it, then all of it could be paid to the employee without increasing employer costs. So that's another $5095.44 in taxes.

[dsc]

15. I used the standard deduction for simplicity's sake

I also treated both countries equally in regards to social security. In both cases I only counted employee taxes. On edit I also rejected any deductions which were a loss in net income because then you don't actually have the income. I would argue that a 401k represents that at least in the short term given the massive penalties for withdrawl.

[hfojvt]

22. an IRA is not a loss of income

if you intend to save for retirement anyway. I did not see a standard deduction in your calculations, nor the child tax credit of $1,000 per child. My total tax was $3,729 but I used tax tables from 2005.

I think the employer portion of social security should be counted for both, since it is the worker who earns that money with his/her labor.

[ikojo]

25. Not everyone can afford to put away money into an

IRA. I am lucky enough to put 9% of my income into my 401(k), which may or may not be there when I am ready to retire. Who can say with certainty that the stock market wont go kablooey? I don't think 401(k) plans are insured like other savings accounts are.

[fazoolius_2006]

33. You are right.

Just look to those who had 401k in Enron. I choose to invest money in wide variety of areas. This is not big money cause i don't make much, but at least I know I will have something when I retire. With the current system of Social Security, I am banking on getting zero out of it unless the politicians in Washington do something about it!!

Consider yourself very lucky to put 9% into a 401k. This is a lot more than most. Wish I could do that, but gas prices are killing me.

[hfojvt]

40. that's what I did not like about the 401K option

except for company stock, it was all mutual funds. Even the government bond option was a government bond mutual fund which paid no dividend. My IRA, OTOH, is in my control, in CDs at a bank. So it is insured, for whatever that is worth.
Advantages
1) no commissions or management fees
2) my money is presumably lent out locally rather than put into the corporate world or MIC.
3) safe from stock market troubles

disadvantages
1) lower rate of return that barely, if even, beats inflation

$10,000 invested at 5% grows to $26,532.96 after 20 years
at 8% it grows to $46,609.56, almost 76% more.

Trouble is, when I looked at my 401K options, they generally did not have good rates of return over the last 3 years, in fact, their return was negative. If they were gonna show an 8% average return, they certainly had some ground to make up. They did not do so in the 8 months I was there. I ended up losing $4 on a $750 investment when a CD would have made $20 for me.

[dsc]

28. I checked again just to be sure

and yes the deductions seem to be included. As to the IRA point, you don't have use of the money for decades. I don't think it is unreasonable for me not to assume that people can give maximum amounts to IRAs. Finally it is impossible to tell how much of the money given to SS would actually be given to the employee if not for SS.

[hfojvt]

36. the exemption is $13,200 for 4 people

that's line 26 of the 1040A
the standard deduction for a couple married filing jointly is $10,300 which is line 24.
The child tax credit is line 33, and $1,000 per child up to income of $110,000 or so where it phases out.

[yes2truth]

16. So, which system do YOU think is best for society at large? EOM

Go ahead, choose one, without qualifying it. We know that SOME people would be better off with one and others with the other. But, for society at large, which brings the better outcome in toto.

[unpossibles]

51. I would say the French version would be better for society at large

first of all, if everyone has access to preventative medicine, that lowers EVERYONE's health costs, including those who can afford insurance AND a major disease/disability.

I don't see how that would not benefit someone, other than the officers of the insurance companies themselves. And possibly credit card companies' CEO's as well.

[Selatius]

14. French Social Security is far more expansive than our own.

It combines universal health with, like our system, a sort of OASDI. We have Medicare, but it only applies to seniors. Medicaid likewise is there for kids and the very poor. There's a donut hole for everybody else to fall through. In France, they rolled them all into one and expanded it to cover everybody. There are no donut holes there.

Roughly 75% of your health care expenses are reimbursed by the government, and you are free to purchase supplemental insurance to cover the remaining 25%.

Yes, you may pay higher taxes, but there, you get better health care, better public education, better mass transit, stronger labor protections, and stronger environmental standards.

[dsc]

17. that is true

France according to the table I found charges 22% vs our 6.75%. If you have better numbers please help I used what I could find.

[TahitiNut]

20. People who're willing to have a National Strike and actually participate DESERVE the better deal.

We, who sneer at organized labor and spit at national service and only vote half the time, deserve to lose our civil liberties and our entitlement to self-governance. We've gone from the "Greatest Generation" to the "Generation Of Cowards" in less than sixty years. Our children and our children's children should piss on our graves. (I'm glad I don't have any of my own.)

TANSTAAFL!

[Selatius]

21. If you don't want to fight, you get shit.

Centralized decision-making structures recognize only one thing: Raw power. Change does not come unless people bear their power in their numbers. Then, the government historically buckled under that power or were swept away in violent fashion like a hurricane storm surge.

National strikes happen because people identify with other people. This is facilitated by a high enough level of collectivist consciousness, but this is hampered if not destroyed if the mindset of each individual is individualistic in nature, made worse by sensationalistic corporate news outlets more ready to report on private tragedies instead of public issues, a news media that celebrates individual wealth accumulation more than worrying about the needs of others.

In this world, you fight for what you want. If you don't fight, you get nothing. Americans haven't fought as hard as the Europeans to get that kind of standard of living.

[ikojo]

24. Not to mention FIVE WEEKS vacation a year

right off the bat. No working fifteen years to "accumulate" five weeks.

[fazoolius_2006]

34. Any idea how there SS system is doing?

I have been looking around on the web and I can't tell if there Social Security system is going to have money when people retire in 50 years. With ours and maintaining the status quo, pretty much 0% chance of seeing any Social Security benefot.

[TahitiNut]

18. Amerikans would rather pay $15K in after-tax dollars than $10K more in taxes.

I don't know how anyone can regard Amerikans as "smart." That's just plain STUPID.

[ikojo]

23. Because as Michael Moore says in SiCKO,

The US is a ME society and not a WE society. In the US not all share in the common good, although most contribute. I pay taxes to help fund the St Louis Cardinals stadium and the St Louis Rams stadium, but I don't go in them very often because of high ticket prices (and well, I loath the Cardinals).

The US is a we society where big business and corporate sports is concerned.

Everyone else: get those bootstraps and PULL.

[TahitiNut]

29. Agreed. "We" get more incensed at breast-feeding in public or smoking outdoors ...

... than in 99% of us losing our liberties and equitable pay and torturing others. It's fucking appalling.

[hfojvt]

26. many of us with good jobs, get better deals

For a single person I pay $2600 a year in before-tax dollars. That's only because I am working part-time. If I was full time, it would cost me $23 a month.

Amerikans would rather take care of themselves and screw the unemployed or underemployed. It's not the families making $60,000 that are struggling to pay for health care. If they paid another $10,000 in taxes it would be to take care of some poor schlemiel that they just generally don't give a rat's a$$ for.

[fazoolius_2006]

31. Not sure what underemployed is??

Also, what if someone chooses to be unemployed? IS it our responsibility to pay for their healthcare? I would rather help out families that are trying to get by rather than propping up someone who chooses not to work (I am not referring to those who can't work, just who choose not to work)

[hfojvt]

41. underemployed, as I used it there,

means a temp job with no benefits, which I worked for 3 years, or a low paying factory or Wal-mart type McJob with really crappy expensive insurance.

The standard meaning of the term underemployed is somebody who has a job that is below their skill or education level, like, for example a guy with a BA in math and an MA in economics who works as a janitor.

In my experience there are alot more people in this country working hard, or at least putting in their time, a crappy McJobs than there are people who choose to be unemployed.

[fazoolius_2006]

42. Cheers for that!

[fazoolius_2006]

30. Interesting look

I have also found this website illustrating the opposite.

http://moneycentral.msn.com/content/Taxes/P148855.asp

Also, from what I have seen, the French system looks at the total income divided by the number of parts to a family and then the tax rate is determined. After that tax rate is used to calculate the tax, the per unit tax is then multiplied by the number of units in the household. In this case, there would be 3 parts (1 mother, 1 father, 1/2 for kid 1 and another 1/2 for kid 2. Therefore, a family with two kids earning 49,482 euros would pay (49,482/3) = 16494 euros. Then applying 14% tax rate: 16,494 x .14 = 2309 euros per unit. Then multiple out by 3 to get a total tax of 6927 euros. In other words, the fact that they have 2 kids gives them the benefit of falling into the 14% tax rate rather than paying the 30% tax rate if they just went by income. The net result would be around 34,000 USD (23613 euros) based on a $3000 USD apartment tax. The total tax burden seen here would be (23613/49482)= 47% where the US system the overall tax burden would be something like 29%.

-snip-
The tax burden remains one of the highest in Europe (nearly 50% of GDP in 2005). - https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html

Also, capital gains taxes there are a lot higher in France than in the US, which would really hit the family if they held any investments.

In the end, you have given a very good look into the French tax system. I personally would not want to pay the taxes that they do and from living in the UK for 5 years, I got tired of the taxes there (less than France), so I moved back to the US.

Thanks for the good post.

-fazoolius

[northzax]

45. also worth noting

that the GDP per capita in France is $22,700, less than any US State (next is Mississippi at $27,829). And the adult unemployment rate of 8.7% is higher than any US state as well (next closest is Mississippi at 8.4% in 2005)

also, take another measure of wealth, besides the one used in the OP: Purchasing Power Parity. according to the IMF, in 2005, the US was 4th with a PPP of $43,444, while France was 21st with PPP of $30,693.

so it's not really that good of a comparison as shown above, the average American makes significantly more money than the Average Frenchman, has easier access to work and can buy almost 40% as much with his salary.

[Turbineguy]

32. We could have all that free stuff too!

But instead we got the Bush Administration.

[Labors of Hercules]

35. We need more posts like this here on DU!! K&R!!

Thanks for taking the time to crunch these numbers... highly illuminating! :toast:

[Mind_your_head]

39. I agree - we do need much more of this type of analysis & discussion

Then we citizens can really have a better grasp of "what we are choosing for" and what 'the whole package', intended and unintended consequences, etc.

Thanks for a great post!

K & R

[Matsubara]

37. Most employees pay half the cost of their HMO out of their check...

So add at least $3600/year to the "tax burden" for the American family, and that doesn't even include copays.



I would also assume that the French tax on families with lower incomes is significantly lower, so it would probably be easier there, with all the help that's provided, for a mother to take a few years off from work to raise small children. Here, that's often just not an option.

[ayeshahaqqiqa]

38. Yes, I'd take that deal

I bet if you looked, you'd also find that a far smaller percentage of each citizen's taxes in France go to pay for their military.

[firefox_fan]

44. Don't worry, Sarkozy will put an end to that...

http://en.wikipedia.org/wiki/Nicolas_Sarkozy

[Brundle_Fly]

46. don't forget

FIVE WEEKS vacation is mandatory as well.

[jobendorfer]

47. If you lived in an urban area of France ...

... you could probably live without a car (or cars), due to a public transportation system that actually works. European cities are very compact, and the resulting density makes it much easier to build functional mass transit. For an interesting exercise, compare the geographic footprint of Rome to that of Seattle. Rome has a population of ~4 million, and its urban area is a little over 2,000 square miles. Seattle has a population of ~3.2 million, so it's somewhat smaller than Rome ... but its urban area consumes 8,200 square miles. Four times the area with 80% of the population.

Anyway. My point is, that's another few thousand bucks per year you wouldn't have to spend, because of another benefit that your French taxes would buy you.

Cube Rat Mode Back On,

J.

[lumberjack_jeff]

48. Hold on.

This is an excellent start. My suggestions;
a) an apples-to-apples comparison would include the cost in the US of private medical insurance, child care and the premium we pay for Rx drugs.
b) is $66k usd the median family income in france? Given the disparity in gdp/population (gdp/population is $31k usd in France, $44k in the US), I suspect not. If isn't, then the taxes for the "average" french family are unrealistically high.

http://www.ambafrance-us.org/atoz/household.asp

[hunter]

50. I'd love to live in a civilized nation.

Instead I live in a corrupt second world right wing American kleptocracy that's all dressed up like a cigar smoking hundred dollar bill waving pig in a pretentiously decorated military uniform.

Ha, hah, welcome to the USA -- the wealthiest most powerful nuclear armed banana republic in all of human history...

:nuke: