4 ms·

The problem is that EU countries tax the paychecks so much that you’ll never be able to reach US levels.

blocked_again 6y ago
That's not the problem. The tax in Europe is similar to that in California. The problem is tech companies pay very very low.
- jariel 6y ago
  The Tax in Europe is generally much higher, but a lot of it is hidden in payroll tax and VAT that you don't see. So x% has already 'come off your paycheck' before you see it, and then an extra 15% on everything that you buy. Which is also hidden. That is offset by extra services, esp. healthcare, but in tech, healthcare is usually a benefit on top of salary anyhow.
  - lordnacho 6y ago
    I've yet to see a calculation where these factors balance the salary gap across the Atlantic. How is a European dev on 40k going to get to say $120K with tax, healthcare, and holidays?
    - jariel 6y ago
      Well it's more than that: it's also parks, public transport, nice civic infrastructure, a lot of local civic things, generous benefits when out of work, cheaper education, probably higher relative salaries for 'many others'. The US may not average $120K for devs, it's probably lower across the board. Then you actually do have apparent inequality problems in the US and if that were taken care if, it would be even less. It's not as wide as indicated by salaries, but it's still a gap.
      - blocked_again 6y ago
        You raise an interesting point. Europeans don't really need to save much money. Because the government takes care of health, education and all the essential things. Why do you need a lot of money if you have everything taken care of. On the other hand when you are living in US or anywhere else you need to have a shit ton of money in bank just to make sure that you don't go bankrupt. For example education for your kids would be ridiculously expensive in US. And if you don't have an insurance you might get bankrupt if you have to hospital for emergency. If I have a choice to be born again in a random country, I would be opting for Germany or some scanadanvian country for sure. US is too risky to be born randomly.
        jariel 6y ago
        ? Education and Healthcare are just 'a few things' not the most essential things. Europeans still need money. Also, remember, that taxes pay for that, so with less incentive to work, there's equally less incentive for taxes to pay for all of that stuff. The degree to which it is an incentive is really complicated, but it is real to some extent.
        blocked_again 6y ago
        I am not saying Europeans don't need money. There is no strong reason for them to have shit ton of money like in Silicon Valley. A German who makes 60k euroes in Berlin has so much better quality of life than someone who makes 120k dollar in San Francisco. Rent is affordable, public transport is great, health care is taken care of and you don't have to save much for children's education. What else someone need money for? Or am I missing something.
Swenrekcah 6y ago
But unless you make over something like 300k/year, you almost certainly get as much or more value from society than you pay in tax. Total effective tax rate is perhaps 20-45% depending on location and salary, but education, daycare, health care, etc is very heavily subsidised instaed.
hiharryhere 6y ago
You say that, but between federal, state and city income tax in NYC I was paying a higher rate there than when I lived in London. The reason is that you’re competing in a much more varied market with less silly money splashing about. Cost of living in London is high, but you’re competing for jobs with competent teams in Eastern Europe. That coupled with fewer VCs funding “Uber for cats” ideas, there’s just not the appetite for paying devs US level salaries.
- redis_mlc 6y ago
  1) Canada also has lower income taxes than the US when doing an itemized return. 2) But Canadian tech salaries are like the EU, in that they're unbelievably low compared to the US. The US TN visa is known as the easiest work visa, so Canadians can work in the US easily on a temp work visa. 3) Part of the reason that SV pays so high for devs is that the interview process filters out 99.9% of candidates, so it takes 6 months to hire anybody in SF. It's partly because the coding interview has escalated from whiteboard to electronic with tests (2018) to electronic with advanced algorithms with tests (2020). Am seeing electronic tests with questions in 4 languages(!) with tests now (late 2020.)
- barry-cotter 6y ago
  > That coupled with fewer VCs funding “Uber for cats” ideas, there’s just not the appetite for paying devs US level salaries. That’s not why the salaries are so much lower. European companies are less profitable so they don’t bid up the wages of developers as much. The more money a company makes the more a productive member of staff is worth to them, so they are more willing to pay it. That drags up the market rate because everyone has to compete with the highest payers for the best devs.

That's not the problem. The tax in Europe is similar to that in California. The problem is tech companies pay very very low.

jariel 6y ago
The Tax in Europe is generally much higher, but a lot of it is hidden in payroll tax and VAT that you don't see. So x% has already 'come off your paycheck' before you see it, and then an extra 15% on everything that you buy. Which is also hidden. That is offset by extra services, esp. healthcare, but in tech, healthcare is usually a benefit on top of salary anyhow.
- lordnacho 6y ago
  I've yet to see a calculation where these factors balance the salary gap across the Atlantic. How is a European dev on 40k going to get to say $120K with tax, healthcare, and holidays?
  - jariel 6y ago
    Well it's more than that: it's also parks, public transport, nice civic infrastructure, a lot of local civic things, generous benefits when out of work, cheaper education, probably higher relative salaries for 'many others'. The US may not average $120K for devs, it's probably lower across the board. Then you actually do have apparent inequality problems in the US and if that were taken care if, it would be even less. It's not as wide as indicated by salaries, but it's still a gap.
    - blocked_again 6y ago
      You raise an interesting point. Europeans don't really need to save much money. Because the government takes care of health, education and all the essential things. Why do you need a lot of money if you have everything taken care of. On the other hand when you are living in US or anywhere else you need to have a shit ton of money in bank just to make sure that you don't go bankrupt. For example education for your kids would be ridiculously expensive in US. And if you don't have an insurance you might get bankrupt if you have to hospital for emergency. If I have a choice to be born again in a random country, I would be opting for Germany or some scanadanvian country for sure. US is too risky to be born randomly.
      - jariel 6y ago
        ? Education and Healthcare are just 'a few things' not the most essential things. Europeans still need money. Also, remember, that taxes pay for that, so with less incentive to work, there's equally less incentive for taxes to pay for all of that stuff. The degree to which it is an incentive is really complicated, but it is real to some extent.
        blocked_again 6y ago
        I am not saying Europeans don't need money. There is no strong reason for them to have shit ton of money like in Silicon Valley. A German who makes 60k euroes in Berlin has so much better quality of life than someone who makes 120k dollar in San Francisco. Rent is affordable, public transport is great, health care is taken care of and you don't have to save much for children's education. What else someone need money for? Or am I missing something.

Swenrekcah 6y ago

But unless you make over something like 300k/year, you almost certainly get as much or more value from society than you pay in tax. Total effective tax rate is perhaps 20-45% depending on location and salary, but education, daycare, health care, etc is very heavily subsidised instaed.

hiharryhere 6y ago

You say that, but between federal, state and city income tax in NYC I was paying a higher rate there than when I lived in London. The reason is that you’re competing in a much more varied market with less silly money splashing about. Cost of living in London is high, but you’re competing for jobs with competent teams in Eastern Europe. That coupled with fewer VCs funding “Uber for cats” ideas, there’s just not the appetite for paying devs US level salaries.

redis_mlc 6y ago
1) Canada also has lower income taxes than the US when doing an itemized return. 2) But Canadian tech salaries are like the EU, in that they're unbelievably low compared to the US. The US TN visa is known as the easiest work visa, so Canadians can work in the US easily on a temp work visa. 3) Part of the reason that SV pays so high for devs is that the interview process filters out 99.9% of candidates, so it takes 6 months to hire anybody in SF. It's partly because the coding interview has escalated from whiteboard to electronic with tests (2018) to electronic with advanced algorithms with tests (2020). Am seeing electronic tests with questions in 4 languages(!) with tests now (late 2020.)
barry-cotter 6y ago
> That coupled with fewer VCs funding “Uber for cats” ideas, there’s just not the appetite for paying devs US level salaries. That’s not why the salaries are so much lower. European companies are less profitable so they don’t bid up the wages of developers as much. The more money a company makes the more a productive member of staff is worth to them, so they are more willing to pay it. That drags up the market rate because everyone has to compete with the highest payers for the best devs.