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You’re exactly right. The German system is setup so that you make use of it only if you are on average or below average income. Anything more is a diminishing r

by wreath 4y ago

You’re exactly right. The German system is setup so that you make use of it only if you are on average or below average income. Anything more is a diminishing return. This is for pension, maternal/paternal leave, health insurance etc. The reasoning being that “so we have more equal society”. Yes equal but there simply is no incentive to progress without being penalized. The lucky ones are those with “old money” or those who prefer to rely on the system instead of themselves.

seoaeu 4y ago
You're proposing cutting government support for the poor so that they'll try harder to escape poverty? Since I'm pretty sure there's already plenty of incentives to not living in poverty
- wreath 4y ago
  Where exactly did I say that?
  - seoaeu 4y ago
    "there simply is no incentive to progress without being penalized". Perhaps I misunderstood?
    - wreath 4y ago
      Yeah I think you did. Here is an example, maternity leave is 65% of salary but capped at 1800 euros. If you make 6000 a month and want to make use of maternity leave, you have to lower your living standards significantly so you can stat with your child. This would make a lot of sense and fair for someone making ~2800 though. But as a high earner, and a high tax payer, i cannot use this system “feature”.
      - seoaeu 4y ago
        Presumably you could take the 1800/month and make up the difference with savings? Even with the maternity leave conditions, it is clearly better to be the person making 6000 than 2800. But I still don’t understand your broader point. Mathematically a progressive tax system is going to have high income people pay more taxes than they receive back in government services, to fund the services provided to low/zero income earners
        wreath 4y ago
        An average income earner has the incentives to go on maternity leave without lowering their living standards, thats not the case for higher earners without burning through their savings. Its simply unfair to contribute a lot without getting a fair share (65% without cap would have been more fair)
        deleted 4y ago
        [deleted]
atq2119 4y ago
The top marginal income tax rate in Germany is not much higher than in, say, the US. The real injustice is that capital gains (i.e., unearned income) are taxed less. But of course that's also very common internationally.

by wreath 4y ago

seoaeu 4y ago

You're proposing cutting government support for the poor so that they'll try harder to escape poverty? Since I'm pretty sure there's already plenty of incentives to not living in poverty

wreath 4y ago
Where exactly did I say that?
- seoaeu 4y ago
  "there simply is no incentive to progress without being penalized". Perhaps I misunderstood?
  - wreath 4y ago
    Yeah I think you did. Here is an example, maternity leave is 65% of salary but capped at 1800 euros. If you make 6000 a month and want to make use of maternity leave, you have to lower your living standards significantly so you can stat with your child. This would make a lot of sense and fair for someone making ~2800 though. But as a high earner, and a high tax payer, i cannot use this system “feature”.
    - seoaeu 4y ago
      Presumably you could take the 1800/month and make up the difference with savings? Even with the maternity leave conditions, it is clearly better to be the person making 6000 than 2800. But I still don’t understand your broader point. Mathematically a progressive tax system is going to have high income people pay more taxes than they receive back in government services, to fund the services provided to low/zero income earners
      - wreath 4y ago
        An average income earner has the incentives to go on maternity leave without lowering their living standards, thats not the case for higher earners without burning through their savings. Its simply unfair to contribute a lot without getting a fair share (65% without cap would have been more fair)
      - deleted 4y ago
        [deleted]

atq2119 4y ago

The top marginal income tax rate in Germany is not much higher than in, say, the US. The real injustice is that capital gains (i.e., unearned income) are taxed less. But of course that's also very common internationally.