5 ms·

German income tax rate is progressive, and maxes out at 45%. While capital gain tax is a flat 25%

pavlov 4y ago
Yes, it’s the same in USA. (The federal rates are lower, but state and local taxes can push your tax bill up to European levels, especially if you own property in a desirable area.)
- mbeex 4y ago
  Point here is, crypto - as well as Gold and Real Estate - are considered a special case of capital. Contrary to stock they have - different - 'speculation periods' (Spekulationsfristen). If they are held beyond this period, no tax is collected for gains of the sale. This was true for stock too before 2009 (unfortunately).
edmundsauto 4y ago
I think you're probably aware of this, but for non Americans - this is the same as in the US. Except I think the capital gains rate (holdings > 1 year) is 15%? (America also has progressive income tax that caps out around 40% I believe... any gains from holdings sold < 1 year are "short term capital gains" which is at standard income tax rates)
deleted 4y ago
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rcMgD2BwE72F 4y ago
If you're poor and only have your work to sell, you'll get taxed progressively until you're rich enough to save money and invest. Meaning your effective tax rate increases as you get reasonably rich (from work) and then when you're really rich, the rate slowly decreases down to the level of capital gain tax. I don't understand why this is accepted. I find this revolting as I'm in the position to benefit (my tax rate going below that of people far less wealthy than me).
- chii 4y ago
  capital gains is income from investing, which is how new productivity gets funded (via buying new plant and equipment, etc). Encouraging investments is not a bad idea. Of course, it's possible to be too pro-investment, but a 25% flat rate on investment based income is not too low, but not too high. It's slightly lower than wage income as an incentive for people to save and invest.
  - rcMgD2BwE72F 4y ago
    >capital gains is income from investing, which is how new productivity gets funded (via buying new plant and equipment, etc). How does that justify taxing work more than capital? For people with high salary, any extra income (from work) is taxed almost 2x that of capital gains. Also, only a small % of investment actually goes funding productivity. Most is just rich people's money changing hands, base only on speculation with zero regards for impact on businesses/society. >a 25% flat rate on investment based income is not too low, but not too high Do you have a study on this, or is this your opinion?
    - chii 4y ago
      > a study on this, or is this your opinion? it is an opinion. The policy setting is not a fact based research, but ideologically based opinion. i would argue that any research is basically paid opinion pieces to try and convince someone on the fence. > How does that justify taxing work more than capital? the justification is in my comment above - it is taxed less than wage income to encourage people to spend their money investing, rather than spending it in consumption.
      - BlargMcLarg 4y ago
        But capital gains tax alone doesn't make the entire equation of risk vs reward, unless you're putting capital gains tax all the way to 100%. Even if it was 90%, if the risk was zero, the time investment was near zero and the reward was your assets going up by 4% post-tax, you'd bet people would still invest, regardless of income tax.
papito 4y ago
With all the wining about European socialism, this is what I pay with combined NYC, state, and federal taxes, plus all the deductions for the safety net that the government should provide anyway.

Yes, it’s the same in USA. (The federal rates are lower, but state and local taxes can push your tax bill up to European levels, especially if you own property in a desirable area.)

mbeex 4y ago
Point here is, crypto - as well as Gold and Real Estate - are considered a special case of capital. Contrary to stock they have - different - 'speculation periods' (Spekulationsfristen). If they are held beyond this period, no tax is collected for gains of the sale. This was true for stock too before 2009 (unfortunately).

edmundsauto 4y ago

I think you're probably aware of this, but for non Americans - this is the same as in the US. Except I think the capital gains rate (holdings > 1 year) is 15%? (America also has progressive income tax that caps out around 40% I believe... any gains from holdings sold < 1 year are "short term capital gains" which is at standard income tax rates)

deleted 4y ago

[deleted]

rcMgD2BwE72F 4y ago

If you're poor and only have your work to sell, you'll get taxed progressively until you're rich enough to save money and invest. Meaning your effective tax rate increases as you get reasonably rich (from work) and then when you're really rich, the rate slowly decreases down to the level of capital gain tax. I don't understand why this is accepted. I find this revolting as I'm in the position to benefit (my tax rate going below that of people far less wealthy than me).

chii 4y ago
capital gains is income from investing, which is how new productivity gets funded (via buying new plant and equipment, etc). Encouraging investments is not a bad idea. Of course, it's possible to be too pro-investment, but a 25% flat rate on investment based income is not too low, but not too high. It's slightly lower than wage income as an incentive for people to save and invest.
- rcMgD2BwE72F 4y ago
  >capital gains is income from investing, which is how new productivity gets funded (via buying new plant and equipment, etc). How does that justify taxing work more than capital? For people with high salary, any extra income (from work) is taxed almost 2x that of capital gains. Also, only a small % of investment actually goes funding productivity. Most is just rich people's money changing hands, base only on speculation with zero regards for impact on businesses/society. >a 25% flat rate on investment based income is not too low, but not too high Do you have a study on this, or is this your opinion?
  - chii 4y ago
    > a study on this, or is this your opinion? it is an opinion. The policy setting is not a fact based research, but ideologically based opinion. i would argue that any research is basically paid opinion pieces to try and convince someone on the fence. > How does that justify taxing work more than capital? the justification is in my comment above - it is taxed less than wage income to encourage people to spend their money investing, rather than spending it in consumption.
    - BlargMcLarg 4y ago
      But capital gains tax alone doesn't make the entire equation of risk vs reward, unless you're putting capital gains tax all the way to 100%. Even if it was 90%, if the risk was zero, the time investment was near zero and the reward was your assets going up by 4% post-tax, you'd bet people would still invest, regardless of income tax.

papito 4y ago

With all the wining about European socialism, this is what I pay with combined NYC, state, and federal taxes, plus all the deductions for the safety net that the government should provide anyway.