Business strangled with taxes?

Question

In Finland EU, if you start own business, you pay taxes aproximately 25+22+9+22=78% taxes and other goverment costs of what you get from a customer in an average non-material custom service.

Is it this hard in other parts of the world too?

Answer 1

Yes, Finland is an example of where the "tax and spend" mentality kills new businesses. However, we've got the "tax and spend" people here in the USA, and sometimes it can be vicious as well.

Here in the USA, a self-employed person has the following taxes:

15.5% - Social Security "Contribution" (it's a tax)
20% - approximate personal income tax on what they take home

In addition, some business have other taxes. So, a good starting point is 40% which included the self-employed person's personal income tax.

Where we lose out here is that we must pay our own health insurance. For my wife and me (just 2 people) we pay about $550 a month for a policy that still leaves me with around $200 a month in medical bills. So, to make it equal with Finland, you're looking at $750 a month in medical bills.

Once the business picks up, each employee costs the employer 7.5% of the employee's income in Social Security Taxes, plus the health insurance if that is offered. The employer also has to pay taxes for that person's "workman's compensation" insurance in case they get hurt on the job. And, the employer has to pay "unemployment insurance" in case the employee must be fired.

Mind you, our "Social Security" pays you barely enough to live on should you get disabled, and about $1000 a month when you retire -- not enough to live on by any means. Social Security pays a slightly better amount to your children if you die before they are raised.

Answer 2

Not in England, when you are a small business the Tax system although complicated actually supports you.