Worldwide Education
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Around the world, education is funded in different ways, yielding different outcomes. In Europe, the state typically still pays for the institutional costs of instruction; students pay little or no tuition, but are responsible for living costs; and most universities are public. In many Asian countries (such as Japan, Korea, Taiwan, and the Philippines), most students attend private universities and colleges and pay the full cost of their education. Tuition is also charged in the small and relatively elite public higher education sector. In the United States, a mix of public and private institutions exists; 80 percent of students attend public colleges and universities, where they pay tuition amounting to something like a quarter or more of the actual cost of instruction, with public funds and other resources covering the rest. The remaining 20 percent study in private institutions, where students pay the bulk of the cost of education.
Many people scowl at the idea of reforming to a European model of school funding, believing that the taxes would be exponentially higher. However, this is not necessarily true. In most EU countries, the standard rate of tax is 20%. The higher rate is 42% for those whom earn over a certain variable gross yearly income. Employees pay tax, similar to the U.S. system under the Pay As You Earn (PAYE) system. This means that tax is deducted by the employer weekly or monthly depending on how frequently you are paid. If you make more than the variable gross yearly income, tax is paid at the standard rate (20%) up to the cut-off point. Any income over the cut-off point is taxed at the higher rate of tax (42%). Unlike the U.S. system or taxation, this system seems more fair, especially because you are not paying tax on any wages that are paid towards healthcare or Old Age Pension (similar to social security).
One nation that set the standard for the tax outline currently used in most countries is Ireland. In Ireland, the healthcare tax is about 2% taken out of your paycheck, unless you make under Ђ400 (January 2005) per week – or self-employed people with income of Ђ20,800 or less per year. Also, most employers and employees (over 16 years of age) in Ireland pay social insurance contributions into Irelands national Social Insurance Fund. In general, the payment of social insurance is required. The social insurance contributions in Ireland are referred to as PRSI (Pay Related Social Insurance).
There is a wide range of benefits that are available to people who have paid social insurance. Entitlement to these benefits is dependent on a number of conditions other than the social insurance requirements. The social insurance qualifying criteria vary, depending on what payment one is applying for. Again, both of these deductions are subtracted from your gross annual income and are not taxed.
Why is the aforementioned information important? Simply because these are benefits that Europeans are getting at a fraction of the cost to Americans with pre-tax Dollars/Euro. The next big thing to look at is education:
Based on the Pay As You Earn system in most of the EU, a single household making Ђ35,000 annually pays about Ђ5,880 (20%) on their first Ђ29,400, and Ђ2,352 (42%) on the remainder of their income – Ђ5,600. Thats gross tax of only Ђ8,232 for the year in Europe, whereas