tax deductions

[Strange]

Exactly that is not the case in Switzerland. Our system doesn't know a limit for deductions. In Germany they have a limit. In Switzerland it is possible to be a "tax free citizen". That is why our system is more liberal and open.

 

So is this thread part of an official campaign to encourage migration to Switzerland?

[swansont]

 

For the US government, zero income tax is also possible; however, not for some state and most city governments that enforce income taxation.

 

 

There are also unavoidable federal taxes on payroll, for social security (OASDI, 6.2%*) and medicare (1.45%*). They tend to be ignored in the "these people pay no taxes" rants, but it's terribly regressive. Also a reason why cash under the table is popular for some arrangements.

 

*matched by your employer. If you're self-employed, you pay more, but also have a few more deductions

[CharonY]

Exactly that is not the case in Switzerland. Our system doesn't know a limit for deductions. In Germany they have a limit. In Switzerland it is possible to be a "tax free citizen". That is why our system is more liberal and open.

 

There even was a article on tages anzeiger online with the title Tax deductions until to be a tax free citizen. In this article tjey wrote that 1/3 of the citizen living in Geneva do not pay any taxes because of tax deductions.

 

I think you are still misunderstand how taxes are applied (either in Switzerland or Germany). Some tax deductions can be taken several times (e.g. for each child, no difference between the countries). However others, such as costs related to commute have an upper limit (again, same for both countries). For example, you cannot buy a diamond encrusted race bike for 100k and expect to be able to deduct the whole sum from your taxable income.

 

Income tax in Switzerland are levied by the cantons and the confederation, whereas the latter is usually rather low. This is different to the US system where state taxes tend to be smaller than the federal ones. In Germany income tax is only levied on the federal level.

 

What you described for Geneva is a local difference. In Geneva a married, single-income household with two children only needs to pay taxes with a gross income >77380 (single: 26305). However take the other end, in Appenzell the same household would have to start paying at 22775 (single:4865), which is a massive difference.

Such a system would not be possible in Germany as "Steuergerechtigkeit" (fairness of taxation) is an important issue there and at least partially mentioned in the constitution (though I am fuzzy on the specifics).

Edited April 6, 2016 by CharonY

[Strange]

There are also unavoidable federal taxes on payroll, for social security (OASDI, 6.2%*) and medicare (1.45%*).

 

There are similar payments in the UK (National Insurance). The threshold for not paying is very low, if you work more than about 21 hours a week on minimum wage you will have to pay NI. You can earn a little bit more before you have to pay tax.

[DrmDoc]

 

 

There are also unavoidable federal taxes on payroll, for social security (OASDI, 6.2%*) and medicare (1.45%*). They tend to be ignored in the "these people pay no taxes" rants, but it's terribly regressive. Also a reason why cash under the table is popular for some arrangements.

 

*matched by your employer. If you're self-employed, you pay more, but also have a few more deductions

 

Indeed; as I posted earlier, our government does impose compulsory Social Security taxes in support of a fund for the retired, elderly, and disabled. In the United States, no reported salary or wage income goes entirely untaxed; however, some taxpayers can entirely avoid Federal Withholding Taxes (FWT), which support government services other than Social Security. Also, the EIC I described earlier can essentially erase all taxes paid and due, including Social Security, for certain low-income individuals although it is applied to FWT payments. Through the EIC, the government essentially over-refunds FWT to eligible claimants. In this way, taxpayers can get credit for paying other taxes and be separately reimbursed through this EIC refund. Who was it that said "There's only two thing for certain in life, death and taxes."? According to Marvin Gaye, there's a third--Trouble!

Edited April 6, 2016 by DrmDoc

[imatfaal]

 

Who was it that said "There's only two thing for certain in life, death and taxes."? According to Marvin Gaye, there's a third--Trouble!

 

"but in this world nothing can be said to be certain but death and taxes" - Ben Franklin who funnily enough lived quite close to me right near my favourite boozer

[Der_Neugierige]

 

 

 

So is this thread part of an official campaign to encourage migration to Switzerland?

Oh please stay calm. My mother is Italian and my father's mother was from Poland. We have 24% of the population who are not Swiss. 5% of population is muslim, mostly from Turkey, Bosnia or Kosovo. We also have a lot black people.

[Strange]

Oh please stay calm. My mother is Italian and my father's mother was from Poland. We have 24% of the population who are not Swiss. 5% of population is muslim, mostly from Turkey, Bosnia or Kosovo. We also have a lot black people.

 

I just thought you might be extolling the virtues of Switzerland to encourage more people to go there ...

[DrmDoc]

 

"but in this world nothing can be said to be certain but death and taxes" - Ben Franklin who funnily enough lived quite close to me right near my favourite boozer

 

Wasn't it Ben who also said, "A penny saved is a penny earned"? He was certainly a pragmatist.

[Strange]

A penny saved is a penny earned. And therefore taxed.

[Sirona]

There are also unavoidable federal taxes on payroll, for social security (OASDI, 6.2%*) and medicare (1.45%*). They tend to be ignored in the "these people pay no taxes" rants, but it's terribly regressive. Also a reason why cash under the table is popular for some arrangements.

 

*matched by your employer. If you're self-employed, you pay more, but also have a few more deductions

 

We also have a Medicare levy which is taxed at 2.0%. There are exemptions and reductions depending on whether your taxable income is equal to or less than the lower threshold. They also assess spouses income if you're married or defacto and any dependants. So if you're partnered then they assess your combined income.

 

If you have private health care then you're exempt from the additional surcharge and for high income earners this is a good option as it includes dental which is not covered by Medicare. This surcharge is aimed at reducing the demand for public healthcare.

[CharonY]

 

I just thought you might be extolling the virtues of Switzerland to encourage more people to go there ...

 

Maybe you are not liberal enough? (I don't get it, either).

[DrmDoc]

We also have a Medicare levy which is taxed at 2.0%. There are exemptions and reductions depending on whether your taxable income is equal to or less than the lower threshold. They also assess spouses income if you're married or defacto and any dependants. So if you're partnered then they assess your combined income.

 

If you have private health care then you're exempt from the additional surcharge and for high income earners this is a good option as it includes dental which is not covered by Medicare. This surcharge is aimed at reducing the demand for public healthcare.

 

Under the US tax code, with one exception, no salary or wage is exempted from Medicare. In fact, an additional 0.9% is imposed on wages in excess of $200,000, which doesn't require employer matching funds. The only wages exempt from Social Security and Medicare are those paid by government recognized religious sects under specific conditions. Otherwise, there is no wage base limit for Medicare taxation but there is a $118,500 wage limit for the Social Security portion. Interestingly, the wealthy are entitled to social security payments although they may have resources rendering those payments superfluous.