Mark O'Sullivan

Shakira's story tells you everything you need to know about the Spanish 🇪🇸 tax system I had never looked into her case; always thought she had used some sort of shady business structure to avoid paying taxes But reality is way worse than that Turns out, she wasn't really living in Spain the year Hacienda claims she didn't pay her taxes She spent 163 days there. Less than the threshold of 183 days that automatically turns you into a tax resident So, what was Hacienda's claim? She was dating a Spaniard and had a house in Spain... So even if she was not really living there... She had to pay Now the National Audience has decreed that's not how it works, and Hacienda has to pay her back, with interests But this tells you a couple things: - If you're from a Western country and plan on leaving, you need to be VERY careful with how you structure things. Tax authorities will try anything to get your money - Shakira only got her money back because she has the time and resources to fight a legal battle for 10 years. You won't be so lucky - If you're a foreigner, stay away from the Spanish tax system. Yes, our cities and nature are unmatched. But just go there as a tourist

It’s that time again… let’s compare what $300K pay in the US actually gets you versus €200K in Europe.. say The Netherlands. You’re self-employed, family of four living comfortably but not extravagantly. Start with Europe.. You earn €200K. The first €77K is taxed at 37% and everything above that at about 50%.. but these rates include national insurance and social security. Assume only modest self-employment deductions and your total tax bill lands around €90K, leaving roughly €110K before health insurance. Coverage for the whole family costs about €3,600 a year because kids are free until 18 and there are practically no deductible (minuscule.. like a few hundred bucks) or out of pocket costs. Then add childcare allowances and deductions which range from €3-10K depending on situation. So let’s go with €115K true take-home. If you own a home, property taxes are rounding errors.. maybe €600–2,000 a year. Then there’s education… Article 23 of the Dutch Constitution enshrines schooling as a guaranteed right, with the government funding both public and “special” private schools.. meaning options like Montessori, Dalton, Waldorf, or religious schools are tuition-free (beyond tiny voluntary fees). Now let’s go to the US, say NYC metro suburbs… You make $300K. After the standard deduction, your taxable income is about $270K. Your federal income tax is an effective rate of ~16%. Add ~5% state income tax and ~$26K net self-employment tax (after the 50% deduction), and $25K in property tax on your house… and your total tax load is about $115K… or a ~38% effective rate. That leaves you with about $185K. Much higher than Europe, right? But now subtract $35K for private family health insurance (premiums plus OOP) and your take-home is now $150K. Maybe there’s a couple K of child credits so $152K. OK now what about baseline incremental lifestyle costs in the US vs EU? The average US household owns 2 cars and spends $10-20K a year on ownership, insurance, gas, and maintenance which is unavoidable in US suburban and even sometimes urban life. A Dutch family might manage with one small car plus bikes and trains for €2-5K. Scale the. compounds the lifestyle delta. The typical American home is almost 2,500sf which is almost 2x the Dutch average of ~1,250.. that’s more square and cubic footage to heat, cool, insure, repair, and fill with stuff. So call it another $5–10K in utilities, furnishings, and upkeep that most European families avoid via cultural differences that value compact intimacy and efficiency vs individualistic spatial grandeur. Then the education gap widens it yet again. In the NYC area and most top cities, those same options that are free in the NL will be private and cost $20–50K per kid, every single year. Even if you stay in public school, property taxes effectively act as tuition. So even with a ~50% higher gross in the US and much lower headline tax rates… the real disposable advantage shrinks to roughly 20–25%… and actually disappears entirely once healthcare, property taxes, car dependency, and the overhead of sprawling spaces are factored in. Depending on your situation, your take-home pay could actually be lower than the equivalent in Europe even with a much higher income. I talk about this stuff not as some kind of champion of Europe but as a deeply patriotic American who wants to spread this knowledge so that we can do much better at home.