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Notes -
How do income taxes work in the US? Let's say I am offered a salary of $100k, what's the rule of thumb to estimate my take-home pay?
For comparison, here's how it's done in Russia. Let's say I am offered 9M rubles per year. This amount includes my income tax that will be deducted by the employer and excludes my social security contributions that will be paid by the employer on top of 10M. There are just two tax brackets: 13% on the first 5M, 15% on the rest. So my take-home pay is 50.87+40.85=7.75M rubles annually.
From what I know about various EU countries, it's more or less the same, except the number of tax brackets is higher and there are additional concerns like having a (non-)working partner and/or underage children that affect the tax rate, but your income taxes are done by the employer.
In the US, unlike almost every other developed country, taxes aren’t (edit: universally) deducted by employers. Instead, employees are responsible for filing and paying their taxes. In a way, I don’t think this is a bad thing, it’s probably responsible for moderately more conservative American views on taxation (even if these aren’t reflected in policy).
In addition to federal income taxes (which range from 10% to 37%), there are also state and even municipal income taxes. Some states like Texas prefer to tax property or sales/goods instead of income. Some tax both property and income, or property, income and sales to varying amounts. At various times there have been both state and federal deductions for taxes paid to other jurisdictions. There was a big fight in the last (and start of this) administration about whether and to what extent state and local taxes could be deducted from federal taxes, which benefits high tax (blue) states at the expense of low tax (often red) ones.
What this means is that in some parts of the US - most notably NYC - high earners deal with tax rates that are actually very comparable to and sometimes even exceed those of most Western European ‘social democracies’ (approx 50% marginal rates). The US isn’t a ‘low tax’ society; in ‘lower tax’ states property taxes are often extremely high by global standards for example. It’s just a very rich society, even compared to Western Europe.
EDIT: Also, the US taxes globally. These taxes are deducted from local taxes where the US has a tax treaty (almost everywhere), so in the UK I don’t pay any American income taxes, but if I moved to, say, Dubai or Hong Kong I’d be liable for the full federal rate minus whatever income tax I paid locally. Anyone who makes more than $100,000 a year has to file, and even those who make less have to declare that they do so, provide their bank accounts and so on (of course the US government/IRS already has them, they force all global banks to report the financial data of any US citizen (which makes opening accounts abroad extremely painful), they just want to try to catch you out).
This is the biggest shit ever and is basically the sole reason I do not want to move long term to the US to get a green card/citizenship.
Really, even considering all the benefits? Wouldn't you income be higher anyway?
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