Taxes- A Picture

[Mook]

EDIT: The excel is Here, since someone asked

[Hank W.]

A good one!

BTW after complaining about Finnish taxes people should compare with Sweden... 25% VAT and 30% municipal taxes... there are *worse* places. Some Caribbean islands IIRC were on the "unbelievable" scale too...

[bretti_kivi]

wow.

i wanted to do this myself - hadn't got round to it yet...

Bret

[Phil]

Well, you need to figure that you eventually spend just about every penny you earn and just about everything in Finland has a 22% VAT slapped on. So, although you're income tax may only be 33%, add that 22% and you get over 50% for a "middle-class" individual. Then there are a gazillion other taxes slapped on top of that. And, if you're married and your spouse makes a middle-class income, you could easily hit that 60% income tax mark.

[Rosamunda]

What does the curve look like if you use the same scale for your x and y axis?

[pierrot]

Aahhh, I was missing some foreigner crying about taxes which are too high!
Thank you, libertarian party!

[Mook]

The thing that surprised me is how straight it is. I s'pose if you add on social allowances too, it would get quite interesting lower down.

Also, the top income tax rate is 34% + 17% (Municipal). So I'm not sure where the 60% figure comes from (apart from being what you pay if you don't have a tax card). Maybe it also includes the social taxes

Phil: If you ever breed (God help us), I'm sure you'll be quite happy with the 300 Euro/month daycare for your spawn (A benefit that even applies to the middle classes)

Penny: I've put the excel sheet up so you can have a play yourself.


EDIT: it's now Here, since someone asked

-Mook

[khu]

What does the curve look like if you use the same scale for your x and y axis?

The slope of the approximate fit straight line is 4/7, so you could just draw two axes with the same length per unit, and count 4 up and 7 over, then connect that line to the origin! Voila!

[Mook]

What does the curve look like if you use the same scale for your x and y axis?

The slope of the approximate fit straight line is 4/7, so you could just draw two axes with the same length per unit, and count 4 up and 7 over, then connect that line to the origin! Voila!

I think that she wants to make it look more like a curve than a straight line.
(The easiest way todo this is to open the Excel and adjust the picture sizes)

[bretti_kivi]

excellent, thanks.

but i'm pretty sure that the numbers coming out of vero.fi's calculator include all social expenses. yes, you can play some more in terms of interest and other bits you can offset, but it ain't that much...

Bret

[teme]

Out of your salary you pay:
1.) Income tax (tulovero). Tax is progressive, there are six brackets,
0 - 11700 euros a year, 0%
11 700 - 14 500 11 %
14 500 - 20 200 15 %
20 200 - 31 500 21 %
31 500 - 55 800 27 %
55 800 - 34 %

2.) Municipal tax (kunnallisvero) which is flat. Varies according to municipality, for example Helsinki is 17.50. See http://www.vero.fi/nc/doc/download.asp?id=3008;86478 for rates, the other two columns are Church Taxes which you pay if you belong to Finnish Lutherian or Orthodox Church.

3.) Unemployment insurance is 0.25%

4.) Social security payment is 1.5%

5.) Mandatory pension payment (usually TEL or LEL) is 4.6% I'm not going to get into inner workings of Finnish pension system, see http://www.tyoelake.fi for more info than you ever wanted. Roughly, you accumulate 1.5% for every year you work. Once you retire you get paid 1.5% x number of years you worked of your salary (max. 60%). You will be paid the pension even if you don't live in Finland. The system is in pretty good financial health, so the changes you will get your money eventually are pretty good. This is tax deductable as are, generally speaking, voluntary pension savings. Edit: It is ofcourse tied to an index to account for inflation.

So basicly, ignoring deductions, if you make 40k a year you'll pay:
1. ) Income tax. Pension payments and other deductions mean that taxable income is about 36k. Income tax out of that is about
= 5000
2) Municipal tax. There is a futher deduction here, something called ansiotulovähennys which is higher mathematics, and brings taxable income down to 34k, 17.5% of which
= 6000
3) Unemployment insurance
= 100
4.) Social security payments
= 600
5.) Pension payments
= 1800

which all adds up to about 13 500, which means you'll get about 27 500 a year in cash out of your 40 000.

Also, for all practical purposes highest possible tax rate is about 50%.

[dr_pgonzalez]

Municipal tax (kunnallisvero) which is flat. Varies according to municipality, for example Helsinki is 17.50. See http://www.vero.fi/nc/doc/download.asp?id=3008;86478 for rates,

Ahh save money, become an atheist and live in Kauniainen

Thanks!

[Mook]

i'm pretty sure that the numbers coming out of vero.fi's calculator include all social expenses

Jep.

The Vero numbers match all the deductions on my pay slip:

Tax,
Employment Insurance
Unemployment Insurance

[Phil]

Aahhh, I was missing some foreigner crying about taxes which are too high!
Thank you, libertarian party!

I have yet to meet a Finnish citizen who doesn't think the taxes are too high. It's not just us Libertarians.

And congratulations, you are the third person to place one of my quotes as your signature. It was funny the first time, cool the second time, and the third time is just kinda gay.

[pierrot]

Aahhh, I was missing some foreigner crying about taxes which are too high!
Thank you, libertarian party!

I have yet to meet a Finnish citizen who doesn't think the taxes are too high. It's not just us Libertarians.

And congratulations, you are the third person to place one of my quotes as your signature. It was funny the first time, cool the second time, and the third time is just kinda gay.

If people keep using quotes of you as signatures, it should give you a hint about the fallacy of your statements.