主题：【原创】续－揭开所谓美国工资和购买力真相的真相 -- 海外俗人

General comments, not against you. Just info for people on the forum.

BTW, I have not seen Chinese FAMILY with only 50k in household income (new immigrated students excluded). For friends around me, lowest income level I heard is around USD 90k.

50k household income life is hard in California.

1.State income tax varies from one place to the other. California state income tax is very high among US states. If you move to less socialistic states, such as Texas, Nevada, you pay 0 in state income tax. Pennsylvia is 3.07%. Missouri is around 4% as effective (topping 6% as marginal rate).

2.Depending on tax planning strategy, for people with income around 150k(based on a friend's example), their annual effective FEDERAL TAX RATE (after tax refund after April 15) is around 22%. Married with kids--then effective rate can be a bit lower with all kinds of tax credit.

3.Social security+medicare contribution (not an income tax per se) will eat away 7.65% (cap at around 100k of earned income in 2009 too).

In low state tax place--a Chinese family effective tax rate (including Fed/State/Social security deduction) will be around 30%. You will have 70% disposable income available.

In high state tax place--a typical middle-class Chinese american family effective tax rate will be around 36-40%. NYCity is the most crazy place.

Those percentages do NOT consider the impact of property tax and sales tax because these two depend on INDIVIDUAL CONSUMPTION BEHAVIOR.

A few issues:

1.When income becomes even higher, if one falls into AMT category--sorry, income tax will be much higher.

2.Sales tax--it is a state-by-state tax when you purchase goods or service. In US, you can buy online FROM OUT-OF-STATE VENDORS to avoid it--free sales tax/free delivery.

3.Property tax--that's county/state-level tax. If you rent property, then you avoid it. If you own house/apartment, then you have to pay.

China.

1.Apparently it has no sales tax, but it charges VAT and final consumer pays all VAT along the value chain--therefore, you DO PAY TAX ON SALES, you just do not see it back in China.

So do not fool yourself by saying that US tax burden is heavier than China--give me a break, okay?

China follows Europe in 1994 when Zhu RJ reformed China's tax system. VAT is an UK-continental Europe design. Sales tax is an Anglo-American-Canadian choice.

2.Property tax--China will sooner or later adopt it to stablize local provincial gov. fiscal situation. Currently, provinces get 40%(SH, beijing) of fiscal revenue from land license income--so long as one is not an idiot, one should figure out this fiscal model is not sustainable in the long run.

If house price collapses, so will be provincial fiscal balance--for any gov. officials, you should hope China's housing prices will not fall.

Sooner or later, (real estate) property tax will come to china--therefore, middle-class family tax burden will race towards the Canadian/European level. Bye-bye, America.

Anyway, if you just rent, then it is not a problem.

3.China's public(excluding housing fund) pension and medicare contribution--every employee working in China has to contribute so-called 4 Jing. It is just the chinese version of US social security/medicare. China charges more percentage-wise because of the unfavorable demographical shift in the future.

4.Individual income tax--a joke. Very poorly designed system with many loopholes, with no consideration for family situation (many kids to support, old people to support, married with non-working spouse), with little tax credits, but WITH HIGH PROGRESSIVE RATEs and small brackets.

Keep in mind: US top marginal rate is 38%. China: you figure it out yourself by google.com. That's very indicative of a socialist system. BTW, all individual income tax is charged BY THE CENTRAL GOV. Provinces are PROHIBITED from charging province level income tax.

So China's provincial gov dilemma: it has no revenue from INDIVIDUAL INCOME TAX REVENUE, it has only 25% from sales tax(VAT). In US/Canada, those accounted for 70-80% of local gov. fiscal income...

then it is natural that China's provincial gov. will try all their best to maximize land sales income(or actually land license income). And charge all kinds of FEES.

It is also natural that property tax will come to China sooner or later... Capital will flee to avoid tax, labor is slow to move around, BUT REAL ESTATE is sitting duck waiting to be taxed---of course gov. will target real estate property first.

Final comment: if you want to know the true level of tax burden in one economy, just collect the total tax revenue number from China'govs and then divide it by China GDP.

Any tax burden on corporation will finally pass over to consumers.

that ratio will be very funny if you compare between China and US. China is actually closer to socialist Europe.

It is weird that chinese even compare China to US.

While, BTW, ever after we put a blah-blah talk-show man called Obama in the oval office, US is also running towards the European spectrum. So maybe in the future, Europe/US/China will be "neighbors" in terms of overall tax burden.