8 ms·

You pay for all that. In most countries even the lowest wage-earners have an effective tax rate of 60%, once you consider social security taxes, income taxes, V

You pay for all that. In most countries even the lowest wage-earners have an effective tax rate of 60%, once you consider social security taxes, income taxes, VAT. It encourages tax evasion and byzantine corporate and individual accounting measures to minimise it. When you considering the very low fertility rates of Europe, I would consider this whole system to be unsustainable. The one thing that the rest of the Western world has right though is healthcare - basic services should be available at low cost to every citizen, and basic healthcare should not be a commercial or profit-driven exercise. I think its reasonable though if you want a hyper-expensive cancer treatment or surgery, you have to pay for that as part of private health insurance.

kojeovo 8y ago
It's really hard to generalize European countries. For example, it's possibly to pay ~20% tax rate in Germany (after tax credits due to Kids) after having gone through free university with free healthcare. And then you have Sweden with 70%
- SOLAR_FIELDS 8y ago
  I am not sure it balances out, but for that increased tax rate Sweden does have some really nice incentives to have kids, including 3 months of mandatory paid paternal AND maternal parental leave, for 6 months total (with the additional option of taking a full year at a reduced rate, something like 50%). Does Germany also have similar incentives? Some cursory googling says not as good. It kind of sucks in Sweden to not be able to take advantage of that if you aren't planning to have kids though. I also don't think besides what I have mentioned above that you factor in the tax breaks that Swedes get for having kids. It's probably not as much as the 20% number you are quoting for germany but a dual-income household (Nordic countries and Denmark and Sweden in particular really favor both parents working in taxes for some reason) with kids probably does not approach the 70% number you quoted, even in the upper echelon (and to hit that 70% number you really do have to make upwards of $100k equivalent in Sweden, which is quite a high salary by Swedish standards). To put it into perspective, at a good paying software dev company the junior devs make between $35-50k equivalent, and the most senior 10-year-or-more experience devs in Sweden are making about $90-100k equivalent. Even though stuff in Sweden is expensive, the social net is pretty strong, so plenty of people can easily survive on $40-50k before taxes because of the free education, healthcare, etc. mentioned before.
- beerlord 8y ago
  You havn't considered payroll taxes. The Scandinavians have smartly replaced payroll taxes with income taxes, whereas in Germany your employer pays 20% for every dollar they pay you. http://www.uhy.com/employers-now-pay-average-employment-costs-worth-nearly-25-of-employees-salaries/ http://www.uhy.com/employers-now-pay-average-employment-cost...
  - someguydave 8y ago
    It would be even smarter to tax consumption and not income or investment
AnthonyMouse 8y ago
> You pay for all that. Right, exactly. Paying $5000 more in taxes to get $5000 more in benefits is net of zero. It's really even worse than that, because when you say you make $60,000 in the US vs. $40,000 in Europe, the $60,000 doesn't include employee benefits like employer-provided health insurance, whereas the $40,000 doesn't include the taxes you have to pay for the equivalent government services. > I think its reasonable though if you want a hyper-expensive cancer treatment or surgery, you have to pay for that as part of private health insurance. But that's the only part you would actually need social assistance for. In any kind of non-corrupt healthcare system, the actual cost of going to the doctor and coming home with a bottle of allergy medicine shouldn't be beyond the ability of anyone at the 10th percentile income to afford. That's really the advantage Europe has. It's not the government services, it's that US institutions are corrupt and so prices are higher. Regulatory capture and overhead makes the market for routine medicine uncompetitive and therefore unaffordable. And it's the same across the board -- look at housing costs in Germany vs. California. Europe's cost advantage isn't that their government is especially good, it's that governments in the US are especially bad.
- mschuster91 8y ago
  > look at housing costs in Germany vs. California. We're not as extreme, but already we see the same symptoms: low-wage employees are getting priced out of the cities. Munich, Frankfurt and Berlin are hellholes.
- claudius 8y ago
  > It's really even worse than that, because when you say you make $60,000 in the US vs. $40,000 in Europe, the $60,000 doesn't include employee benefits like employer-provided health insurance, whereas the $40,000 doesn't include the taxes you have to pay for the equivalent government services. And the 40'000€ also doesn’t include your employer’s contributions to public social security (approx. half of health insurance, half of unemployment insurance etc.).
freeflight 8y ago
> When you considering the very low fertility rates of Europe, I would consider this whole system to be unsustainable. Low fertility rates are a feature and not a bug, and in these times they are actually a very desired feature [0]. The only way one could consider that "unsustainable" is to assume there's literally zero immigration, with a globally stagnating or shrinking population. But all of these are objectively false. On a global scale, humanity is a far cry from dying out due to infertility, quite the opposite. So let's not pretend that low fertility rates are a bad thing, okay? Btw: By HDI the US ranks 13, down from 12. Want to take an educated guess where most of the countries above it on the ranking are located? [1] [0] https://www.theguardian.com/environment/2017/jul/12/want-to-fight-climate-change-have-fewer-children https://www.theguardian.com/environment/2017/jul/12/want-to-... [1] https://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...
- AnthonyMouse 8y ago
  > The only way one could consider that "unsustainable" is to assume there's literally zero immigration, with a globally stagnating or shrinking population. The world-wide net immigration is inherently zero. If what we're looking for is approximately the population replacement rate globally, what sense does it make to have something different nationally? Doing so creates all sorts of problems for the population source countries in terms of brain drain and so on (they pay to educate someone for decades and then anyone above the 90th percentile moves out), and for the destination country in terms of preserving the local culture and history as long-term net immigration results in the culture of the donor population subsuming the existing one.
  - freeflight 8y ago
    > The world-wide net immigration is inherently zero. Good thing I didn't talk about "world-wide net immigration" but rather about "worldwide net population growth". The two are related, but not the same. Low birthrates are very much a localized "problem", fixed by global migration due to the fact that globally we do not have a fertility problem, globally we have the exact opposite of that problem.

kojeovo 8y ago

It's really hard to generalize European countries. For example, it's possibly to pay ~20% tax rate in Germany (after tax credits due to Kids) after having gone through free university with free healthcare. And then you have Sweden with 70%

SOLAR_FIELDS 8y ago
I am not sure it balances out, but for that increased tax rate Sweden does have some really nice incentives to have kids, including 3 months of mandatory paid paternal AND maternal parental leave, for 6 months total (with the additional option of taking a full year at a reduced rate, something like 50%). Does Germany also have similar incentives? Some cursory googling says not as good. It kind of sucks in Sweden to not be able to take advantage of that if you aren't planning to have kids though. I also don't think besides what I have mentioned above that you factor in the tax breaks that Swedes get for having kids. It's probably not as much as the 20% number you are quoting for germany but a dual-income household (Nordic countries and Denmark and Sweden in particular really favor both parents working in taxes for some reason) with kids probably does not approach the 70% number you quoted, even in the upper echelon (and to hit that 70% number you really do have to make upwards of $100k equivalent in Sweden, which is quite a high salary by Swedish standards). To put it into perspective, at a good paying software dev company the junior devs make between $35-50k equivalent, and the most senior 10-year-or-more experience devs in Sweden are making about $90-100k equivalent. Even though stuff in Sweden is expensive, the social net is pretty strong, so plenty of people can easily survive on $40-50k before taxes because of the free education, healthcare, etc. mentioned before.
beerlord 8y ago
You havn't considered payroll taxes. The Scandinavians have smartly replaced payroll taxes with income taxes, whereas in Germany your employer pays 20% for every dollar they pay you. http://www.uhy.com/employers-now-pay-average-employment-costs-worth-nearly-25-of-employees-salaries/ http://www.uhy.com/employers-now-pay-average-employment-cost...
- someguydave 8y ago
  It would be even smarter to tax consumption and not income or investment

AnthonyMouse 8y ago

> You pay for all that. Right, exactly. Paying $5000 more in taxes to get $5000 more in benefits is net of zero. It's really even worse than that, because when you say you make $60,000 in the US vs. $40,000 in Europe, the $60,000 doesn't include employee benefits like employer-provided health insurance, whereas the $40,000 doesn't include the taxes you have to pay for the equivalent government services. > I think its reasonable though if you want a hyper-expensive cancer treatment or surgery, you have to pay for that as part of private health insurance. But that's the only part you would actually need social assistance for. In any kind of non-corrupt healthcare system, the actual cost of going to the doctor and coming home with a bottle of allergy medicine shouldn't be beyond the ability of anyone at the 10th percentile income to afford. That's really the advantage Europe has. It's not the government services, it's that US institutions are corrupt and so prices are higher. Regulatory capture and overhead makes the market for routine medicine uncompetitive and therefore unaffordable. And it's the same across the board -- look at housing costs in Germany vs. California. Europe's cost advantage isn't that their government is especially good, it's that governments in the US are especially bad.

mschuster91 8y ago
> look at housing costs in Germany vs. California. We're not as extreme, but already we see the same symptoms: low-wage employees are getting priced out of the cities. Munich, Frankfurt and Berlin are hellholes.
claudius 8y ago
> It's really even worse than that, because when you say you make $60,000 in the US vs. $40,000 in Europe, the $60,000 doesn't include employee benefits like employer-provided health insurance, whereas the $40,000 doesn't include the taxes you have to pay for the equivalent government services. And the 40'000€ also doesn’t include your employer’s contributions to public social security (approx. half of health insurance, half of unemployment insurance etc.).

freeflight 8y ago

> When you considering the very low fertility rates of Europe, I would consider this whole system to be unsustainable. Low fertility rates are a feature and not a bug, and in these times they are actually a very desired feature [0]. The only way one could consider that "unsustainable" is to assume there's literally zero immigration, with a globally stagnating or shrinking population. But all of these are objectively false. On a global scale, humanity is a far cry from dying out due to infertility, quite the opposite. So let's not pretend that low fertility rates are a bad thing, okay? Btw: By HDI the US ranks 13, down from 12. Want to take an educated guess where most of the countries above it on the ranking are located? [1] [0] https://www.theguardian.com/environment/2017/jul/12/want-to-fight-climate-change-have-fewer-children https://www.theguardian.com/environment/2017/jul/12/want-to-... [1] https://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...

AnthonyMouse 8y ago
> The only way one could consider that "unsustainable" is to assume there's literally zero immigration, with a globally stagnating or shrinking population. The world-wide net immigration is inherently zero. If what we're looking for is approximately the population replacement rate globally, what sense does it make to have something different nationally? Doing so creates all sorts of problems for the population source countries in terms of brain drain and so on (they pay to educate someone for decades and then anyone above the 90th percentile moves out), and for the destination country in terms of preserving the local culture and history as long-term net immigration results in the culture of the donor population subsuming the existing one.
- freeflight 8y ago
  > The world-wide net immigration is inherently zero. Good thing I didn't talk about "world-wide net immigration" but rather about "worldwide net population growth". The two are related, but not the same. Low birthrates are very much a localized "problem", fixed by global migration due to the fact that globally we do not have a fertility problem, globally we have the exact opposite of that problem.