The top income tax rate is 40% -- which is not too high in itself, about the same as the U.S. However, the 37% tax bracket applies to income of only 30,000 euros! The 27% tax bracket kicks in at a mere 12,000 euros. In the U.S., the 35% rate doesn't kick in until you have an income of $372,951. The 28% rate applies to income of $137,000 for a married couple. You can see the difference between the U.S. system and that of Greece.
Plus, on top of that, Greece has a 21% VAT, recently raised from 19%.
But, here's something I didn't know -- Greece also has a payroll tax of 16% paid by the employee, and an additional 28% paid by the employer! Ouch!
The back of my envelope says that amounts to a 65% marginal tax rate -- on income above 12,000 euros! Not to mention property taxes or other local taxes.
Saturday, May 15, 2010
Greek tax system.
Earlier this week I posted Nathan Lewis's recent article on the Two-Santa Theory, but forgot to highlight his illuminating summary of the Greek tax code: