3 ms·

Can you do a real calculation? I can save up 2k€/month because I want to work part-time (1-2 weeks a month) and will only make 6.5k€/month pre-tax (3.5k€ after

Can you do a real calculation? I can save up 2k€/month because I want to work part-time (1-2 weeks a month) and will only make 6.5k€/month pre-tax (3.5k€ after taxes). Unfortunately we have heavy taxing here in Germany (42% income tax). I need to invest a million to make 70k€/year pre-tax (premise: 7% ROI). This doesn't sound remotely possible - saving up 25-30k€/year is not going to cut it for significant gains in the markets. I can increase my income by working full-time, but if I know that I have to do it for many years I get demotivated. - - - Maybe it's a mistake that I'm located in Germany, the taxing makes it impossible for me to save up enough money although I'm in the top 10-20% of incomes. Due to progressive taxing, going from 100k€ to 120k€/year increases my net income from 55k€ (this is nearly half of the 100k) to 64k€. It feels like that's a bit too much because people making a million also pay 42% income tax (most of them pay 25% because capital gains are taxed differently). Having money is rewarded more than working, so I'm getting demotivated a bit by knowing that most of the money I make will be eaten by progressive taxes, anyways. edit: There's a way to pay around 20-25% of taxes - having a family where one person works with two kids (two working parents is not encouraged, however - very subtle nudging). It's like we've ingrained our values into our tax system. For me as a 20y/o, this doesn't help and I'm not gonna marry somebody to save some taxes.

varjag 8y ago
Stock gains are taxed with capital gain tax, which is typically a lot lower than income tax. Here in Norway CGT is at 28%, an unattainably low figure for income tax on professional salary. You can also tax deduct losses.
- mockingbirdy 8y ago
  I understand that the government tries to incentivize people to invest, but it's also very clear who profits most from such regulations. In a market where there's a lot of capital which already chases yields (ECB already keeps the interest low). It's always Keynes vs. Friedman (and a mix of both), but I don't like this de-regulated state. We already have big problems with inequality. What do you think about this?
  - varjag 8y ago
    I fail to see a solution to this that won't throw the baby out with the bathwater. Increasing CGT will kill off small business scene effectively, as it's very often one-two small owners with very modest compensation via the dividend.

varjag 8y ago

Stock gains are taxed with capital gain tax, which is typically a lot lower than income tax. Here in Norway CGT is at 28%, an unattainably low figure for income tax on professional salary. You can also tax deduct losses.

mockingbirdy 8y ago
I understand that the government tries to incentivize people to invest, but it's also very clear who profits most from such regulations. In a market where there's a lot of capital which already chases yields (ECB already keeps the interest low). It's always Keynes vs. Friedman (and a mix of both), but I don't like this de-regulated state. We already have big problems with inequality. What do you think about this?
- varjag 8y ago
  I fail to see a solution to this that won't throw the baby out with the bathwater. Increasing CGT will kill off small business scene effectively, as it's very often one-two small owners with very modest compensation via the dividend.