6 ms·

I'm kind of surprised by the idea of saving nothing for your children. Is it a symptom of the dog eat dog American system of capitalism that it seems kinda wild

I'm kind of surprised by the idea of saving nothing for your children. Is it a symptom of the dog eat dog American system of capitalism that it seems kinda wild to me? I guess if you can be certain that their fundamental needs will be met, it isn't as important. But in the US your life can be pretty crap, even if not abject developing world style poverty.

nackerhewz 6y ago
It's because most people in Europe don't really make enough to do so. Also if you somehow manage to increase your income, over half of it disappears in taxes and social security contributions.
- terwey 6y ago
  Denmark and the Netherlands have the highest income tax bracket at 52/53%. Germany is 43%. However they are stacked taxes. In Germany (where I reside), the first €9744 (2021) is untaxed, then 14% until a certain amount (can't find it atm) and max 43%. However, if you do your tax returns your effective tax rate will drop significantly. I'd wager that most pay around 25% in total income taxes, excluding things like the health insurance and other taxes. However, we indeed do not worry about saving up money to put our kids through school. Earning 65k which what most companies in the tech scene now offer to lure them in as a SWE in Germany is a great salary realistically, considering for example an architect with a masters degree will earn around 55k and no real improvement in sight. Also don't forget to factor in that the concept of being fired for PROPER reason is nearly impossible in most European countries. Even if an employer hits hard times they cannot just lay off an entire department to quickly green out the numbers in the books, there needs to be proper grounds. I currently need to give my employer 3 months notice before I can even leave, same goes for them to me.
  - ABeeSea 6y ago
    Except for financially dubious start-ups, getting laid off at a tech company comes with a fairly nice severance package. Dropbox, for example, is giving 3 months salary, Q1 equity, and 100% of 2020 bonuses.
  - throwaway894345 6y ago
    I was laid off recently due to the pandemic. Because I work in tech, it took me two weeks to find a new job and it ended up being a promotion and a 20% raise. I would make 40% less in Europe, even in a big city, and unless I lived in a small European town my cost of living would be quite a lot higher. Even factoring healthcare (contrary to what Europeans perceive, the healthcare system works very well for the upper middle class) and student loan debt, I’m far better off financially than I would be in Europe. Of course, this isn’t true for Americans in general. I want us to adopt European social policies; however, for SWEs, the financials are just better in the US.
    - martin_a 6y ago
      > the healthcare system works very well for the upper middle class See, that's the point. In Europe it works well for everyone, no matter how much you earn. It's a mentality-thing in the end (where the US position is hard to grasp for Europeans).
      - throwaway894345 6y ago
        I agree. I was responding to the narrower context of the post: affordability for SWEs.
    - beagle3 6y ago
      > contrary to what Europeans perceive, the healthcare system works very well for the upper middle class) ... until you get a really expensive chronic disease. And then it fails miserably. I know upper middle class parents whose kids got a disease which need ~$5000/month meds for a few years (and nontrivial infusion center costs on top). It worked ok for some, many had been informed that the insurance company decided not to pay - requiring lawsuits (some settled, some ongoing). No European, Canadian or Israeli parent that I know of kid with the same disease ever had to fight or pay out of pocket - it was all covered by the single payer with no hassles.
      - ABeeSea 6y ago
        Not defending the US healthcare system, but I’ve never heard of an insurance plan without an out of pocket maximum. For example, my plan has a 2k maximum for individuals and 4K for married couples. Combined with a health savings account (allowed to be funded pre-tax from both the employer and employee), I’ve generally put $1-2k a year in that during my 20s when I rarely needed medical expenses. I still haven’t had a year where I’ve spent more than I’ve saved to the point I could cover multiple years of out of pocket maximums just from that account. And since it’s a “savings account” I can invest the tax-free savings into the stock market with index funds. I’ve actually had a decent amount of growth in that account just from stock market gains.
  - llampx 6y ago
    Interestingly enough, I wrote above about this as well but with the opposite sentiment. The Spitzensteuersatz of 42% is applicable for income from 57k€ onwards. That's hardly rich and hardly deserving of so much tax. Meanwhile I could earn millions through investments and dividends and would only pay 25% capital gains tax. Also, 25% sounds ridiculously low when you add up the income tax, social contributions, sales tax, capital gains tax etc. Not to forget yes the 7%/14% you pay for health insurance. Or you have cherry-picked a family of 4 with one person earning 45k€ a year and drawing the most Kindergeld possible.
hogFeast 6y ago
I am not sure what that alludes to either. Germans and Italians save huge amounts of their income (typically, higher than the US). You still need to save for a pension in almost every European economy, one isn't given to you (state pensions in Europe, even in the UK, are contribution-based). Welfare systems in Europe are not redistributive like in the US, they are typically contributory (you get out what you put in). So there is no sense in which your fundamental needs will be met irregardless of anything else. I think the issue with the US is that you have a very redistributive political economy, and so many people believe that those elements are the same everywhere AND they could have all the free healthcare...it doesn't really work that way (marginal tax rates on middle-class incomes are above 50% in some European economies, and top rates are usually lower than in the US...try doing that in the US).
- pietrovismara 6y ago
  > You still need to save for a pension in almost every European economy Uh, no? Pensions are contribution based but that contribution comes from taxes on your salary. Far from me to say that the system is perfect but you basically just need to work. Welfare is absolutely not contributory in Europe, it wouldn't make sense as those who need public welfare the most are those that can contribute less. Some countries like Austria have a healthcare system based on insurance, but employers are required to pay for it, students have it for free and unemployed as well.
  - terwey 6y ago
    A lot of people confuse welfare with unemployment, I assume you mean that welfare isn't contribution based which is correct. In some countries, e.g. NL/DE, unemployment however is contribution based and you always pay for it (it's tacked on next to your normal taxed), which when needed is limited to 2 years based on 60% of your last net income. The idea is that you should still be able to afford your current way of living without too many compromises when you got laid off and haven't found a new job yet. In Germany for example welfare isn't great, it's around €400/mo though the state pays your rent directly.
    - 6y ago
alkonaut 6y ago
I expect to leave them something (provided e.g the housing market doesn’t totally collapse.) But I don’t need to save for their education or anything like that. I don’t save explicitly in their name.

nackerhewz 6y ago

It's because most people in Europe don't really make enough to do so. Also if you somehow manage to increase your income, over half of it disappears in taxes and social security contributions.

terwey 6y ago
Denmark and the Netherlands have the highest income tax bracket at 52/53%. Germany is 43%. However they are stacked taxes. In Germany (where I reside), the first €9744 (2021) is untaxed, then 14% until a certain amount (can't find it atm) and max 43%. However, if you do your tax returns your effective tax rate will drop significantly. I'd wager that most pay around 25% in total income taxes, excluding things like the health insurance and other taxes. However, we indeed do not worry about saving up money to put our kids through school. Earning 65k which what most companies in the tech scene now offer to lure them in as a SWE in Germany is a great salary realistically, considering for example an architect with a masters degree will earn around 55k and no real improvement in sight. Also don't forget to factor in that the concept of being fired for PROPER reason is nearly impossible in most European countries. Even if an employer hits hard times they cannot just lay off an entire department to quickly green out the numbers in the books, there needs to be proper grounds. I currently need to give my employer 3 months notice before I can even leave, same goes for them to me.
- ABeeSea 6y ago
  Except for financially dubious start-ups, getting laid off at a tech company comes with a fairly nice severance package. Dropbox, for example, is giving 3 months salary, Q1 equity, and 100% of 2020 bonuses.
- throwaway894345 6y ago
  I was laid off recently due to the pandemic. Because I work in tech, it took me two weeks to find a new job and it ended up being a promotion and a 20% raise. I would make 40% less in Europe, even in a big city, and unless I lived in a small European town my cost of living would be quite a lot higher. Even factoring healthcare (contrary to what Europeans perceive, the healthcare system works very well for the upper middle class) and student loan debt, I’m far better off financially than I would be in Europe. Of course, this isn’t true for Americans in general. I want us to adopt European social policies; however, for SWEs, the financials are just better in the US.
  - martin_a 6y ago
    > the healthcare system works very well for the upper middle class See, that's the point. In Europe it works well for everyone, no matter how much you earn. It's a mentality-thing in the end (where the US position is hard to grasp for Europeans).
    - throwaway894345 6y ago
      I agree. I was responding to the narrower context of the post: affordability for SWEs.
  - beagle3 6y ago
    > contrary to what Europeans perceive, the healthcare system works very well for the upper middle class) ... until you get a really expensive chronic disease. And then it fails miserably. I know upper middle class parents whose kids got a disease which need ~$5000/month meds for a few years (and nontrivial infusion center costs on top). It worked ok for some, many had been informed that the insurance company decided not to pay - requiring lawsuits (some settled, some ongoing). No European, Canadian or Israeli parent that I know of kid with the same disease ever had to fight or pay out of pocket - it was all covered by the single payer with no hassles.
    - ABeeSea 6y ago
      Not defending the US healthcare system, but I’ve never heard of an insurance plan without an out of pocket maximum. For example, my plan has a 2k maximum for individuals and 4K for married couples. Combined with a health savings account (allowed to be funded pre-tax from both the employer and employee), I’ve generally put $1-2k a year in that during my 20s when I rarely needed medical expenses. I still haven’t had a year where I’ve spent more than I’ve saved to the point I could cover multiple years of out of pocket maximums just from that account. And since it’s a “savings account” I can invest the tax-free savings into the stock market with index funds. I’ve actually had a decent amount of growth in that account just from stock market gains.
- llampx 6y ago
  Interestingly enough, I wrote above about this as well but with the opposite sentiment. The Spitzensteuersatz of 42% is applicable for income from 57k€ onwards. That's hardly rich and hardly deserving of so much tax. Meanwhile I could earn millions through investments and dividends and would only pay 25% capital gains tax. Also, 25% sounds ridiculously low when you add up the income tax, social contributions, sales tax, capital gains tax etc. Not to forget yes the 7%/14% you pay for health insurance. Or you have cherry-picked a family of 4 with one person earning 45k€ a year and drawing the most Kindergeld possible.

hogFeast 6y ago

I am not sure what that alludes to either. Germans and Italians save huge amounts of their income (typically, higher than the US). You still need to save for a pension in almost every European economy, one isn't given to you (state pensions in Europe, even in the UK, are contribution-based). Welfare systems in Europe are not redistributive like in the US, they are typically contributory (you get out what you put in). So there is no sense in which your fundamental needs will be met irregardless of anything else. I think the issue with the US is that you have a very redistributive political economy, and so many people believe that those elements are the same everywhere AND they could have all the free healthcare...it doesn't really work that way (marginal tax rates on middle-class incomes are above 50% in some European economies, and top rates are usually lower than in the US...try doing that in the US).

pietrovismara 6y ago
> You still need to save for a pension in almost every European economy Uh, no? Pensions are contribution based but that contribution comes from taxes on your salary. Far from me to say that the system is perfect but you basically just need to work. Welfare is absolutely not contributory in Europe, it wouldn't make sense as those who need public welfare the most are those that can contribute less. Some countries like Austria have a healthcare system based on insurance, but employers are required to pay for it, students have it for free and unemployed as well.
- terwey 6y ago
  A lot of people confuse welfare with unemployment, I assume you mean that welfare isn't contribution based which is correct. In some countries, e.g. NL/DE, unemployment however is contribution based and you always pay for it (it's tacked on next to your normal taxed), which when needed is limited to 2 years based on 60% of your last net income. The idea is that you should still be able to afford your current way of living without too many compromises when you got laid off and haven't found a new job yet. In Germany for example welfare isn't great, it's around €400/mo though the state pays your rent directly.
  - 6y ago

alkonaut 6y ago

I expect to leave them something (provided e.g the housing market doesn’t totally collapse.) But I don’t need to save for their education or anything like that. I don’t save explicitly in their name.