Depending on your definition of income tax you check 2 numbers:
- the lower number that you as a person pay (strictly the personal income tax)
- the higher number, combining what the company pays + what you pay after your income.
I am a contractor so I get a breakdown how much was spent on taxes and if get 100 EUR from a company the tax deduction is 65 EUR. (Obviously, the % depends on your actual income).
Combine this with VAT and you see that your actual contribution to the government is in the 70%-80% range.
I still remember how bad I felt for the peasants in primary school when we learned that they had to give 1/10th of their income to the state, and later another 1/10th to the church.
Thanks for the explanation. Are you taking into account the lower rates, though? For example, where I am, there's a personal allowance meaning one can earn £10,000 and not pay a single penny in income tax. The basic rate (which ends at a value substantially above the average salary) is only 20%. I'm guessing you're not in the UK, so it's going to be harder for me to compare situations. I don't think it's fair to combine income tax with VAT since that (mostly) applies on goods you choose to buy, rather than a percentage of your earnings.
You can go to different countries for having lower tax rates, in my experience it is never going to be less than 35 - 50% for the amount of money I make.
I am not sure how is it not fair to combine VAT + income tax to understand how much you are actually paying to the government. Goods I "choose" to buy includes: food and clothing, I am not sure how much it is a choice or just a necessity. Buying a flashy car is a choice, buying bread or a medicine is not so much.
That's why I added the "(mostly)"; where I live, most food is exempt from VAT, which is as it should be. I agree that clothing is a necessity, so should also be exempt, but only up to a reasonable limit - and then things get a bit too complicated.
VAT is definitely a problematic tax because it tends to hit the poorer harder, but that doesn't affect the fact that it would be possible to pay almost none of your income as VAT, or you could pay millions in VAT; it's very different from actual income tax.
- the lower number that you as a person pay (strictly the personal income tax) - the higher number, combining what the company pays + what you pay after your income.
I am a contractor so I get a breakdown how much was spent on taxes and if get 100 EUR from a company the tax deduction is 65 EUR. (Obviously, the % depends on your actual income).
Combine this with VAT and you see that your actual contribution to the government is in the 70%-80% range.
You can check out the rates here: https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
I still remember how bad I felt for the peasants in primary school when we learned that they had to give 1/10th of their income to the state, and later another 1/10th to the church.