You don’t understand how progressive taxes work. No one is punished for earning more. Even if you reach he maximum rate, the maximum rate is only coming out of your disposable income (unless you are a complete idiot living no only above your means but well above what’s reasonable).
In practice that’s doesn’t work out. Govts don’t care about properly defining what constitutes as “disposable income” and in the EU we don’t get all the nice tax benefits people get in the US. It’s just rape to tax someone at 15% and then someone else who makes 2x that at 45% or something like that.
Furthermore why should I be taxed for “disposable income”? I should be able to save and invest some money (stuff that ins’t deductible in most of Europe). I don’t live paycheck to paycheck and have to get a loan and live of credit cards like most of the US does.
So, yes, my country does tax me for earning more, the money comes straight out of my monthly paychecks, I don’t even see it. Only if I’ve healthcare, education and a few other expenses I may see a small fraction of that money coming back to me, but up to some limit. If I decide to buy a car, a house or invest in stocks I won’t be ever see that money back.
That’s not how it works. The 45% doesn’t apply to your entire income, only to the part above the threshold. For example, if you work in Germany, you only pay 45% on what you earn above €227k, and you’ll always pay 0 taxes for the first €11k.
I believe I’m not explaining myself clearly here. I’m aware of what you’re saying but using your example I still don’t see why I should be taxed 45% on income over 227k. I do understand that my first 11k will be tax free, the from 11k to some other value I’ll pay 10% and so on. I just don’t agree with taxing people that way.
If you look at countries like Portugal, Spain a few others you’ll see that people are getting squeezed by their governments with a combination of progressive taxes paired with recent inflation. The cost of living in those countries right now requires people to have wages that are taxed to absurd values because “they’re rich” and when if you boil it down you’ve people that can barely afford to rent a single bedroom flat and don’t even own a car.
