Michael Back to the rough everyday life! Something I've always wanted to get off my chest: People pay taxes in America too, and not just a little! In Germany, everyone looks to the USA and complains: Oh my, oh my, how much tax do I have to pay! And how complicated is the annual tax return! Over there, everything is much better and a thousand times simpler! But I'll tell you: Anyone who has ever filled out a 1040 form for the American tax authority IRS (Internal Revenue Service) will never complain about German taxes again. Although the agency is up-to-date and provides the forms on the internet, where you can download and print them at home, when you take a closer look, you come to the conclusion that the IRS employs crazy people who come up with such monstrous bureaucracy.

Our tax situation here has become so complicated--due to the extra kickbacks from the sale of my books in Germany--that I can no longer do the annual tax return myself. The tax advisors in the USA are also too clueless, and only tax expert Angelika can still make sense of it. For this, we have to buy a program called "TurboTax Home and Business" every year, which costs 80 dollars, knows all the special regulations, and can only be operated by Angelika.

The tax is divided into two components, simply put: the "Federal Tax," which is the actual income tax, and the "State Tax," which in our case, since we live in sunny California, is called the "California Tax." It's like having to pay extra German taxes if you lived in Bavaria! However, it should not be confused with the sales tax, which is also levied depending on the state but is collected at the store and often surprises tourists because you end up paying more at the register than what is indicated on the price tag. No, I'm only talking about the annual tax return. By the way, each state has its own state tax rate, and there are also states (e.g., Texas) that do not levy any state-specific income tax. However, the "Federal Tax" is the same everywhere.

Using a complex calculation program and space-age computer technology, I have illustrated in Figure 1 how the total tax rate in California depends on annual gross income. The stacked columns show how much of the tax rate is federal tax and how much is state tax. For example, if someone earns, say, $75,000 a year, the tax rate is still a manageable 25% (if married), but top earners who make half a million or more are at 45%.

What makes the payroll slip appear friendly, however, is that there are almost no additional deductions: dental and health insurance, which are sometimes separate in America, are almost fully covered by the employer if you have a good job. These are usually so-called "Managed Care" insurance plans, where the insurance company has contracts with certain doctors and hospitals that agree to charge only specific fees for certain services. At AOL and the insurer United Healthcare, there are three options: In the first option, you don't pay any health insurance premium yourself, but you can only go to contracted doctors--in San Francisco, this is not a problem since there are hundreds of doctors in the "network."

However, if you are somewhere remote and need to see a doctor, it is unlikely that the nearest one works with the insurance you are covered by, and you would have to pay everything out of pocket in an emergency. On the other hand, if you pay an additional $80 per month (for two people), you are also covered for cases where you need to see a non-contracted doctor in an emergency, although with a deductible. Our plan is called "Point-of-Service," as we must always first contact our primary care physician, who then, if necessary, grants permission for us to see a specialist. There is a third plan (Preferred-Provider-Network, PPO), which costs about twice as much and allows the patient to go directly to any doctor on the insurer's "preferred list" without consulting the primary care physician. For each of the plans, a $10 fee must be paid for each visit to the primary care physician, $20 for a specialist, and $50 for the emergency room at the hospital.

All in all, patient billing can be quite nerve-wracking. Most doctors somehow try to charge more than the set rates, to which the health insurance simply pays the set rate. Then, the billing services of the medical practices send reminders to the patients, sometimes rudely pointing out that it is ultimately the patient's responsibility to pay the full bill. As a result, the patient has to mediate between the insurance and the medical practice, and so on and so forth--it's enough to make you tear your hair out! We once had a case where such a dispute over 80 dollars dragged on for over a year. It eventually turned out that the billing service of the medical practice had submitted the case to the wrong insurance company, but by the time the case was resolved, I had to call at least five times and explain to totally clueless representatives how to do their job. I felt like I was in kindergarten.

There is still a social insurance, the "Social Security Tax," which amounts to 6.2% of income, capped at an annual salary of $65,000, and serves as retirement and disability insurance. However, it only provides a minimal pension at a welfare level, and no one in their right mind relies on it; everyone sets aside private funds to secure their retirement financially. The government offers tax advantages with the so-called 401K plan, allowing you to save money tax-free until you take some out, at which point it is taxed. Amusingly, almost all American retirement money is invested in stock funds, and in the event of a stock market crash, the entire American pension system would collapse like a house of cards. But in the last thirty years or so, stocks have only gone up, and everyone assumes that this will continue for the next thirty years.

There is also a government health insurance: One pays 1.45% of the gross salary, and then the so-called "Medicare" kicks in at retirement age (65). Additionally, Medicaid provides the basic services for welfare recipients who are chronically ill. Otherwise, there is no mandatory health insurance, which results in a third of Americans having no health insurance at all and, if they become seriously ill, they might go bankrupt and become homeless -- which can be seen plenty on the streets.

• More topics you might be interested in:

  	Tahiti
  	Freedom of Religion
  	Furniture
  	New TV Set
  	Gym Membership
  	Solution To the Quiz Question
  	Photography Hour
  	Mayoral Election In San Francisco

  
  

• More topics you might be interested in:

  	Tahiti
  	Freedom of Religion
  	Furniture
  	New TV Set
  	Gym Membership
  	Solution To the Quiz Question
  	Photography Hour
  	Mayoral Election In San Francisco