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Bezos would not have kept Amazon in the US if it adopted Nordic welfare levels of taxation. The fact of the matter is that the EU has a staggeringly low output

Bezos would not have kept Amazon in the US if it adopted Nordic welfare levels of taxation. The fact of the matter is that the EU has a staggeringly low output when it comes to tech innovation compared to the US. Their policies and regulations shape this.

jimnotgym 4y ago
...and lots of other factors, like access to risk capital.
chrischen 4y ago
The US is prized because of its large market… not because it’s a tax dodge. The US dan cut off access to any company unwilling to pay local taxes just like how China forces any foreign company wanting to tap into its large market to give majority control to a local entity.
- uffndnjfncnc 4y ago
  The EU is a large market too but startup founders aren't going there.
  - johannes1234321 4y ago
    EU has a market on legislative base, however in language, culture, ... it is split. It is very hard to build a company serving larger parts of Europe.
    - uffndnjfncnc 4y ago
      Many American companies have done it. Instagram is very popular across the EU.
      - johannes1234321 4y ago
        They started with an American focus, holding doors open for others and once things were running expanded more actively. Also they were acquired after 1.5 years when not even having a Android app, which is more spread in Europe than US compared to iphone
- svnt 4y ago
  The US is absolutely a tax dodge because of low capital gains taxes and low corporate tax rates. Marginal personal income tax rates, which is what others keep comparing here, are only relevant for wage earners.
  - chrischen 4y ago
    It's all relative isn't it? Singapore is a tax dodge, but I would't characterize low corporate income taxes as a tax dodge. How does one get money out of a corporation if not via marginal personal income tax rates?
    - svnt 4y ago
      Long term capital gains.
      - chrischen 4y ago
        Can you elaborate?
jliptzin 4y ago
I looked up taxation in Norway, it looks very similar to ours. Personal marginal tax rates cap at 48% and corporate taxes are 23%. What am I missing? https://en.m.wikipedia.org/wiki/Taxation_in_Norway https://en.m.wikipedia.org/wiki/Taxation_in_Norway
- dkga 4y ago
  It has nothing to do with taxation - or else the Arab Gulf or Cayman Islands would be entrepreneurial hubs, not California or the Toronto area. It’s all about the price of quality labour. It’s about access to long-term risk capital (aka venture funds) + high quality labour at affordable prices. As in, entrepreneurs having cash to fund projects and being able to actually hire people that will help build them. Try hiring a hundred software engineers in Norway: your hourly cost would probably blow up. The low-tax destinations are the place billionaires go to park their wealth, not create it (for example, outside of Tech Nordic billionaires move to Switzerland after they get rich)
  - Annatar 4y ago
    [dead]
  - pcl 4y ago
    > Try hiring a hundred software engineers in Norway: your hourly cost would probably blow up. Depends what you’re comparing to. Total comp for great engineers in Oslo is lower than for their peers in Silicon Valley.
    - htkibar 4y ago
      Total cost to the company may not be. Employees are costlier to the companies in Europe.
  - winReInstall 4y ago
    Also you get really great engineers in norway, something about the lack of light, cold, snowy eternal night, produces excellent devs. Lots of fantastic open source projects exist due to the vikings no longer using boats..
IronIvan 4y ago
Can confirm. Lived a very frugal early retirement lifestyle in Austria because it was practically impossible to build wealth (high taxes, comparatively very low tech salaries, little entrepreneurial support/incentives). Moving to the US I was able to 5-6x my income (from what I could have realistically made) , while reducing my tax burden by 15 percentage points, and so I've been happily living a workaholics' lifestyle since. Looking back, it really boggles my mind how much engineering potential is squandered in Europe. You'd have to be an idiot to want to work hard given how raw of a deal you are getting (work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!) and people understand that intuitively (hence pushing for ever fewer work hours or even days because what else is there if your salary is essentially capped and you quickly hit a 50 % tax rate (when combining income tax and social security) for every additional hour worked). </rant>
- uffndnjfncnc 4y ago
  [flagged]
- sph 4y ago
  Not all of Europe runs on a 50% tax rate though. My tax rate as company director in the United Kingdom is somewhere around 25%, and I can afford higher salaries than the rest of Europe while still enjoying the basic safety net of public health care. But I'm originally from Italy, and the tax rate is exorbitant down there as well, with ridiculously low salaries. You do you, but there is more to life than gross income from your employer. This is why I'd rather stay in this continent.
- washmyelbows 4y ago
  I'll be lucky if I can afford a single family home after 20 years of software engineering in the US. halfway there now, we'll see. Moving to a senior position has helped but I feel like a lot of people forget that the compensation in SV is not normal in other places.
  - alistairSH 4y ago
    SV is an outlier in both income and housing costs. Here in DC metro, a mid-career developer should be able to afford a home without much trouble. Many of the best jobs are well outside the city (Tysons to Ashburn corridor) where housing costs aren’t terrible.
KptMarchewa 4y ago
"Consumer tech" like social media. And the reason is 30+ different smaller markets, because this business makes little sense if you can't capture 100s of millions of users.
dd36 4y ago
Your taxes shouldn’t be based on where your HQ is but rather where your customers are.
- stanislavb 4y ago
  Please go file your taxes in 37 different countries with different regulations where your customers are. You will bankrupt from your accountants’ bills.
s3000 4y ago
Amazon doesn't make profits and thus doesn't pay taxes. Bezos doesn't sell much and thus doesn't pay taxes either. Changing rates wouldn't change anything. Tax rates only affect the middle class, and as @jliptzin has pointed out, those tax rates are quite similar. The EU has a lower output because there are fewer investors. One successful startup creates wealth in the hand of knowledgeable people who can create the next startup. There are simply not thousands of millionaires and billionaires who can successfully pick the next round. There is also less of a network effect where venture capitalists can offer their portfolio as leads for the sales teams of their new investments. The Nordic welfare levels can turn out to be the path to European success. It's easier to start an idea when failure doesn't end in an existential crisis.

jimnotgym 4y ago

...and lots of other factors, like access to risk capital.

chrischen 4y ago

The US is prized because of its large market… not because it’s a tax dodge. The US dan cut off access to any company unwilling to pay local taxes just like how China forces any foreign company wanting to tap into its large market to give majority control to a local entity.

uffndnjfncnc 4y ago
The EU is a large market too but startup founders aren't going there.
- johannes1234321 4y ago
  EU has a market on legislative base, however in language, culture, ... it is split. It is very hard to build a company serving larger parts of Europe.
  - uffndnjfncnc 4y ago
    Many American companies have done it. Instagram is very popular across the EU.
    - johannes1234321 4y ago
      They started with an American focus, holding doors open for others and once things were running expanded more actively. Also they were acquired after 1.5 years when not even having a Android app, which is more spread in Europe than US compared to iphone
svnt 4y ago
The US is absolutely a tax dodge because of low capital gains taxes and low corporate tax rates. Marginal personal income tax rates, which is what others keep comparing here, are only relevant for wage earners.
- chrischen 4y ago
  It's all relative isn't it? Singapore is a tax dodge, but I would't characterize low corporate income taxes as a tax dodge. How does one get money out of a corporation if not via marginal personal income tax rates?
  - svnt 4y ago
    Long term capital gains.
    - chrischen 4y ago
      Can you elaborate?

jliptzin 4y ago

I looked up taxation in Norway, it looks very similar to ours. Personal marginal tax rates cap at 48% and corporate taxes are 23%. What am I missing? https://en.m.wikipedia.org/wiki/Taxation_in_Norway https://en.m.wikipedia.org/wiki/Taxation_in_Norway

dkga 4y ago
It has nothing to do with taxation - or else the Arab Gulf or Cayman Islands would be entrepreneurial hubs, not California or the Toronto area. It’s all about the price of quality labour. It’s about access to long-term risk capital (aka venture funds) + high quality labour at affordable prices. As in, entrepreneurs having cash to fund projects and being able to actually hire people that will help build them. Try hiring a hundred software engineers in Norway: your hourly cost would probably blow up. The low-tax destinations are the place billionaires go to park their wealth, not create it (for example, outside of Tech Nordic billionaires move to Switzerland after they get rich)
- Annatar 4y ago
  [dead]
- pcl 4y ago
  > Try hiring a hundred software engineers in Norway: your hourly cost would probably blow up. Depends what you’re comparing to. Total comp for great engineers in Oslo is lower than for their peers in Silicon Valley.
  - htkibar 4y ago
    Total cost to the company may not be. Employees are costlier to the companies in Europe.
- winReInstall 4y ago
  Also you get really great engineers in norway, something about the lack of light, cold, snowy eternal night, produces excellent devs. Lots of fantastic open source projects exist due to the vikings no longer using boats..

IronIvan 4y ago

Can confirm. Lived a very frugal early retirement lifestyle in Austria because it was practically impossible to build wealth (high taxes, comparatively very low tech salaries, little entrepreneurial support/incentives). Moving to the US I was able to 5-6x my income (from what I could have realistically made) , while reducing my tax burden by 15 percentage points, and so I've been happily living a workaholics' lifestyle since. Looking back, it really boggles my mind how much engineering potential is squandered in Europe. You'd have to be an idiot to want to work hard given how raw of a deal you are getting (work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!) and people understand that intuitively (hence pushing for ever fewer work hours or even days because what else is there if your salary is essentially capped and you quickly hit a 50 % tax rate (when combining income tax and social security) for every additional hour worked). </rant>

uffndnjfncnc 4y ago
[flagged]
sph 4y ago
Not all of Europe runs on a 50% tax rate though. My tax rate as company director in the United Kingdom is somewhere around 25%, and I can afford higher salaries than the rest of Europe while still enjoying the basic safety net of public health care. But I'm originally from Italy, and the tax rate is exorbitant down there as well, with ridiculously low salaries. You do you, but there is more to life than gross income from your employer. This is why I'd rather stay in this continent.
washmyelbows 4y ago
I'll be lucky if I can afford a single family home after 20 years of software engineering in the US. halfway there now, we'll see. Moving to a senior position has helped but I feel like a lot of people forget that the compensation in SV is not normal in other places.
- alistairSH 4y ago
  SV is an outlier in both income and housing costs. Here in DC metro, a mid-career developer should be able to afford a home without much trouble. Many of the best jobs are well outside the city (Tysons to Ashburn corridor) where housing costs aren’t terrible.

KptMarchewa 4y ago

"Consumer tech" like social media. And the reason is 30+ different smaller markets, because this business makes little sense if you can't capture 100s of millions of users.

dd36 4y ago

Your taxes shouldn’t be based on where your HQ is but rather where your customers are.

stanislavb 4y ago
Please go file your taxes in 37 different countries with different regulations where your customers are. You will bankrupt from your accountants’ bills.

s3000 4y ago

Amazon doesn't make profits and thus doesn't pay taxes. Bezos doesn't sell much and thus doesn't pay taxes either. Changing rates wouldn't change anything. Tax rates only affect the middle class, and as @jliptzin has pointed out, those tax rates are quite similar. The EU has a lower output because there are fewer investors. One successful startup creates wealth in the hand of knowledgeable people who can create the next startup. There are simply not thousands of millionaires and billionaires who can successfully pick the next round. There is also less of a network effect where venture capitalists can offer their portfolio as leads for the sales teams of their new investments. The Nordic welfare levels can turn out to be the path to European success. It's easier to start an idea when failure doesn't end in an existential crisis.