4 ms·

Main issue in the EU is still compensation. They are pretty stingy with equity and salary. And risk wise, yes, US tends to swing for the fences more often whic

Main issue in the EU is still compensation. They are pretty stingy with equity and salary. And risk wise, yes, US tends to swing for the fences more often which produces unicorns. EU tends to go more traditional and safe routes (aka boring).

alecco 5y ago
What's the point of high compensation when most of it will end up getting taxed away? If you combine employee/employer taxes/contributions it gets to 80%. Add a huge amount of regulations and unions to the mix. There are some exceptions in places like Bulgaria, Belarus, or Poland. But they have much higher barriers like language and climate.
- oblio 5y ago
  > If you combine employee/employer taxes/contributions it gets to 80%. Where are you getting that crazy number? US salary overhead is slightly higher than Denmark's (which I think is the highest in OECD), despite the supposedly low rates in the US you hear about. In most of Europe at very high salaries the overhead is about 50%, maybe a bit more, which is basically what it is in the US in most states. The main thing is that the US just pays a <<ton>> more. So there's more left at the end :-)
  - KptMarchewa 5y ago
    Not sure what is your source, but this seems to disprove that: https://taxfoundation.org/publications/comparison-tax-burden-labor-oecd/ https://taxfoundation.org/publications/comparison-tax-burden...
    - oblio 5y ago
      You're right, I missed this: https://www.oecd.org/tax/tax-policy/taxing-wages-denmark.pdf https://www.oecd.org/tax/tax-policy/taxing-wages-denmark.pdf But I can't find the other source, the point was the total overhead: income tax + healthcare + social security. The US is surprisingly high when you add everything up.
    - alecco 5y ago
      That's for a 35.7k salary. I'm talking 6 figure salaries. To get to a 150k NET salary if you factor in income tax, payroll tax, state pension system/insurance, union contributions, and a bunch of other things it becomes 80% of the GROSS cost for the employer. Income tax alone gets to 55% for higher bands in many countries. And due to looming pension crisis they are planing to RAISE all these taxes and contributions.
      - oblio 5y ago
        > Income tax alone gets to 55% for higher bands in many countries. Do you have a list of these countries? The highest I know is 42% for the highest tax bracket, which makes the effective tax rate around 35-38% for most salaries, including the very high ones.
        alecco 5y ago
        https://en.wikipedia.org/wiki/Tax_rates_in_Europe#Summary_list https://en.wikipedia.org/wiki/Tax_rates_in_Europe#Summary_li... Sort by Maximum Income Tax Rate (3rd column). I should've said personal income taxes and contributions not just "Income Tax". There is a nightmare of other things you can see there but effectively it's taxes on personal income. Employers pay a lot too before this. For example in Spain they pay almost 30%. https://www.bankinter.com/blog/finanzas-personales/del-salario-bruto-salario-neto-espana-asi-varia-sueldo-infografia https://www.bankinter.com/blog/finanzas-personales/del-salar... (note this is for <50k/yr, but employer contributions don't have bands)
        deleted 5y ago
        [deleted]
  - xyzzyz 5y ago
    VAT (sales tax) is much higher in Europe (20%+), though it won’t bring the total tax to 80%. On the other hand, taxes in the US are much generally much more progressive than in Europe. In the States, the wealthy pay large majority of the taxes, while in Europe, these are covered mostly by middle class. Therefore, for median wage earners in Europe, effective tax rate is much higher than in US.
    - oblio 5y ago
      The initial comment was about top earners, not median earners. And my guess is that it wasn't about VAT or sales tax, but about income tax + healthcare + social security.
  - flavius29663 5y ago
    I think only top tax states tax you at 50% in the US. The majority of developers don't live there.
    - oblio 5y ago
      Yeah, but what are we talking about, then? Most European devs who would move to the US would move to the top states, for the top salaries. You need to compare like with like.
pas 5y ago
... nonsense! EU startups are not "talent" but capital limited. Boring or not, EU startups lack money to develop their product to a decent stage, grow to a sort of minimum size to be taken seriously, etc. It's not magic though. Keeping a company alive takes money. (And if it's the investors' money it's called capital.) US startups pour a really ridiculous money into growth exactly because they want to break out of this stage. And naturally that's risky. Of course if the access to capital was a lot easier compensation would be higher too.
- varjag 5y ago
  They lack money because European capital is risk averse.
  - KingMachiavelli 5y ago
    They could even have a similar risk tolerance but Europe just has more risks. If any one of the big US startups was based in the EU they would have been regulated a long time ago.
    - varjag 5y ago
      Some perhaps (Uber? even that is debatable) but any one is really a stretch. Most of them would be entirely fine in Europe, just that it's not happening.

alecco 5y ago

What's the point of high compensation when most of it will end up getting taxed away? If you combine employee/employer taxes/contributions it gets to 80%. Add a huge amount of regulations and unions to the mix. There are some exceptions in places like Bulgaria, Belarus, or Poland. But they have much higher barriers like language and climate.

oblio 5y ago
> If you combine employee/employer taxes/contributions it gets to 80%. Where are you getting that crazy number? US salary overhead is slightly higher than Denmark's (which I think is the highest in OECD), despite the supposedly low rates in the US you hear about. In most of Europe at very high salaries the overhead is about 50%, maybe a bit more, which is basically what it is in the US in most states. The main thing is that the US just pays a <<ton>> more. So there's more left at the end :-)
- KptMarchewa 5y ago
  Not sure what is your source, but this seems to disprove that: https://taxfoundation.org/publications/comparison-tax-burden-labor-oecd/ https://taxfoundation.org/publications/comparison-tax-burden...
  - oblio 5y ago
    You're right, I missed this: https://www.oecd.org/tax/tax-policy/taxing-wages-denmark.pdf https://www.oecd.org/tax/tax-policy/taxing-wages-denmark.pdf But I can't find the other source, the point was the total overhead: income tax + healthcare + social security. The US is surprisingly high when you add everything up.
  - alecco 5y ago
    That's for a 35.7k salary. I'm talking 6 figure salaries. To get to a 150k NET salary if you factor in income tax, payroll tax, state pension system/insurance, union contributions, and a bunch of other things it becomes 80% of the GROSS cost for the employer. Income tax alone gets to 55% for higher bands in many countries. And due to looming pension crisis they are planing to RAISE all these taxes and contributions.
    - oblio 5y ago
      > Income tax alone gets to 55% for higher bands in many countries. Do you have a list of these countries? The highest I know is 42% for the highest tax bracket, which makes the effective tax rate around 35-38% for most salaries, including the very high ones.
      - alecco 5y ago
        https://en.wikipedia.org/wiki/Tax_rates_in_Europe#Summary_list https://en.wikipedia.org/wiki/Tax_rates_in_Europe#Summary_li... Sort by Maximum Income Tax Rate (3rd column). I should've said personal income taxes and contributions not just "Income Tax". There is a nightmare of other things you can see there but effectively it's taxes on personal income. Employers pay a lot too before this. For example in Spain they pay almost 30%. https://www.bankinter.com/blog/finanzas-personales/del-salario-bruto-salario-neto-espana-asi-varia-sueldo-infografia https://www.bankinter.com/blog/finanzas-personales/del-salar... (note this is for <50k/yr, but employer contributions don't have bands)
        deleted 5y ago
        [deleted]
- xyzzyz 5y ago
  VAT (sales tax) is much higher in Europe (20%+), though it won’t bring the total tax to 80%. On the other hand, taxes in the US are much generally much more progressive than in Europe. In the States, the wealthy pay large majority of the taxes, while in Europe, these are covered mostly by middle class. Therefore, for median wage earners in Europe, effective tax rate is much higher than in US.
  - oblio 5y ago
    The initial comment was about top earners, not median earners. And my guess is that it wasn't about VAT or sales tax, but about income tax + healthcare + social security.
- flavius29663 5y ago
  I think only top tax states tax you at 50% in the US. The majority of developers don't live there.
  - oblio 5y ago
    Yeah, but what are we talking about, then? Most European devs who would move to the US would move to the top states, for the top salaries. You need to compare like with like.

pas 5y ago

... nonsense! EU startups are not "talent" but capital limited. Boring or not, EU startups lack money to develop their product to a decent stage, grow to a sort of minimum size to be taken seriously, etc. It's not magic though. Keeping a company alive takes money. (And if it's the investors' money it's called capital.) US startups pour a really ridiculous money into growth exactly because they want to break out of this stage. And naturally that's risky. Of course if the access to capital was a lot easier compensation would be higher too.

varjag 5y ago
They lack money because European capital is risk averse.
- KingMachiavelli 5y ago
  They could even have a similar risk tolerance but Europe just has more risks. If any one of the big US startups was based in the EU they would have been regulated a long time ago.
  - varjag 5y ago
    Some perhaps (Uber? even that is debatable) but any one is really a stretch. Most of them would be entirely fine in Europe, just that it's not happening.