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Iceland: The emerging tech-ecosystem of the Nordics
- gumballindie 3y agoThe main issue with the nordics is that you get taxed to death.
- mataug 3y agoThose taxes aren't wasted usually, one does get some value out of paying such high taxes.
- newZWhoDis 3y agoThat value does not make up for the costs, it’s not even close.
- buildbot 3y agoSure, but the benefit to freedom by disconnecting social support services such as healthcare from employment is massive. It’s a tradeoff many seem pleased with.
- bbarn 3y agoI see you haven't used the Icelandic health care system - which receives over half of the high income tax rate. It's trauma care, not health care. Anything preventative is deprioritized and the country beats the United States in Obesity rate. Get hurt, they patch you up, but have a chronic condition, like say a thyroid problem? See you in 6 months.
- gpm 3y agoUS Obesity rate: 41.9% Iceland Obesity rate: 21.9% Source: https://en.wikipedia.org/wiki/List_of_countries_by_obesity_rate https://en.wikipedia.org/wiki/List_of_countries_by_obesity_r...
- runarberg 3y agoAs somebody that grew up in Iceland but live in the US now, the Icelandic health care system might be bad, and is definitely getting worse, and the main reason for that being that it is severely underfunded (and the main reason for that is the Independence Party [See your post above]), but compared to the US system it is still heaven.
- emptysongglass 3y agoThe public healthcare system in Denmark is a travesty. Preventative care is almost totally absent. Yet Danes defend it as "unnecessary tests" [1] That perception is made clear in this Reddit thread [1] https://www.reddit.com/r/copenhagen/comments/11xbvvk/boom_in_private_health_insurance_prompts_doctors/ https://www.reddit.com/r/copenhagen/comments/11xbvvk/boom_in...
- 3np 3y agoNot on capital gains, with schemes available to cap salaries and shift compensation to equity, especially for executives. So despite the public perception on progressive taxes, in practice the Nordics can be quite attractive compared to European countries which have lower income tax rates but income through equity/stocks are progressively taxed together with income taxes. So they can eat their cake and have it too in a sense, by being more accomodating for the wealthy tax-wise than most of the population realize.
- TehCorwiz 3y agoMy understanding is that unlike the US they actually have get social benefits like healthcare and university for their tax dollars. https://taxsummaries.pwc.com/iceland/individual/taxes-on-personal-income https://taxsummaries.pwc.com/iceland/individual/taxes-on-per... And according to Wikipedia Iceland has a lower marginal tax rate than the US. https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rates https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rat...
- newZWhoDis 3y ago>And according to Wikipedia Iceland has a lower marginal tax rate than the US. Does that “marginal tax rate” in the US include payroll tax? If not it is inaccurate. Employees pay payroll tax, even if they don’t see it taken out on their paychecks.
- WalterBright 3y ago> Employees pay payroll tax, even if they don’t see it taken out on their paychecks. Yes, the so-called "employers' contribution" is a fine piece of propaganda.
- paddw 3y agoIn the U.S corporations have lots of ways to avoid tax, not sure about Iceland.
- WalterBright 3y agoThe best way for a US corporation to avoid tax is to lose money.
- paul7986 3y agoAnd free geothermal bathhouses to enjoy and socialize after work like the Romans did. The Blue and or Sky Lagoons (disney world of spas) for me werent that great when compared to meeting/conversing with locals at the local and free bathhouses (not free for tourist though; $10).
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- neuronexmachina 3y agoDo you have any numbers for how many die from taxes there annually? It looks like they have a pretty high QoL: https://worldpopulationreview.com/country-rankings/standard-of-living-by-country https://worldpopulationreview.com/country-rankings/standard-...
- ksimukka 3y agoBut I get a lot of value from those taxes. To name a few: - Education. - Daycare/kindergarten. - Healthcare. - Public transportation. - Libraries and museums.
- busterarm 3y agoIt's not that much more than living in New York City or SF. Also you actually get the benefit of your tax dollars.
- slushh 3y agoIt can also be an advantage. You are only taxed on profits so it's only a disadvantage for those who are in a business for the money. I would assume that this leads to better business relations with better opportunities because greedy people will leave.
- WalterBright 3y ago> those who are in a business for the money ... greedy people Well, yeah. And people who get a job also do it for the money.
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- imartin2k 3y agoIn Sweden, if you invest in / trade stocks and choose an “ISK” type of account, you pay almost zero tax on your gains (you pay a very low flat tax on the total value of your stocks, and this is quite unsubstantial for most average people who invest/trade) At least compared to most other European countries, where every profit from stocks is heavily taxed, this is quite wild. The downside of this ofc is that losses aren’t tax deductible either, and that you still pay the tax even if your stocks lost in value during the year. But still: Your capital gains earned through this scheme are close to be tax-free. If you bought a lot of Nvidia in January and sold it now, you could even withdraw the profit to buy a house or a car - and thereby avoid most of the tax that would come as a consequence of a bigger value of your stock holdings. Just writing this to point out that there’s more nuance to this “taxes are high in the Nordics” narrative.
- paddim8 3y agoAdding to this, Sweden has no property tax or inheritance tax, unlike the US.
- alexanderchr 3y agoNL works similarly but without the opt in, i.e. all your assets above a threshold are taxed at a fictitious income level, like it or not. Means they have no capital gain taxes at all. Makes for great countries to be rich in, but if you’re a high earning low wealth individual like many early-mid career programmers you’ll be taxed to death.
- tpmx 3y agoThis is true. The fix is to start your own company and do consulting instead of being employed. Some companies are cool with this, some aren't. This allows you to even out high income periods with low income periods, thus avoiding the high margin tax on income.
- klabb3 3y agoEmpirically I haven’t heard of anyone paying lethal doses of taxes, and I’m from Sweden so I should know. But I have heard of people dying from a lack of health insurance, or other preventable causes, but that’s in a different country..
- xkbarkar 3y agoSo you are saying the waiting times in the Swedish hospital system have no effect whatsoever? Right… Nordics love to pick on US when their own healthcare have up to a decade of waiting times for inportant procedures. Up to two years for even an interview with a specialist. Every single hospital sydtem in the Nordic countries is broken beyone hell. Both Sweden and Denmark offer private insurance so you can bypass lines and cut down costs. Iceland does not. No idea about Finland and Norway. In the nordics you pay socialist taxes for what is turning in to a kapitalist system. I wish my fellow Nordics would grow up and face our crippled internal system of throwing immature comments on the US about our “free” healthcare. Its neither free nor is it working. I pay 43% of my salary to taxes. I also pay private health insurance as do half of the population here. I also pay road tolls, school fees, taxes because I have a mobile ohone from work due to on call. Taxes because work offers food on premis. The dentist costs 100 euro just for a basic examination and some xrays. Food cost is at an all time high, so is heating and electricity. Nordics celebrating nordic superiority is more like the frog being boiled so slowly he doesnt realize until its too late.
- klabb3 3y ago> So you are saying the waiting times in the Swedish hospital system have no effect whatsoever? I wasn’t saying anything even remotely similar to that. > Nordics love to pick on US when their own healthcare have up to a decade of waiting times for inportant procedures. It’s not a competition. There are serious problems within Swedish (and probably Nordic overall) healthcare, in particular non-urgent procedures like hip replacement surgery. We should criticize them both. However, I’ve been living in both systems. In the US the total cost (both taxes and private) is >2x, and the outcome is significantly worse, in aggregate. Getting what’s considered “excellent” health insurance can still land you in a hell hole of legal disputes and unimaginable medical debt. I absolutely don’t blame you for your disappointment, but the US system is much, much more broken, in aggregate, and not just for “the poor”, but for everyone except perhaps multi-millionaires. > Its neither free nor is it working. It’s never free. However “working” is not a boolean, it’s floating point. It can get much, much worse. > I also pay private health insurance as do half of the population here. Out of curiosity, where? I’m not saying you’re wrong, but it’s news to me. I thought it was way less common. > Nordics celebrating nordic superiority is[..] Beyond stupid, indeed. The mindset “at least we’re better than X” leads to complacency and is a huge flaw in many people’s thinking. Everywhere. I don’t endorse any of that.
- Tor3 3y ago"Taxed to death" - where does that come from? How? I'm relatively high taxed, compared to many, I pay a bit more than 40%. But what I'm left with is disposable money, except for car and house insurance (reasonably priced). Plenty left for my wife and myself, for doing everything we want, to travel, and still add to our savings. The only economic burden I can think of is unexpected visits to the dentist - that can cost you. I'll take this system before absolutely any alternative.
- jillesvangurp 3y agoI'd say California comes quite close. People in the US pay taxes too. And depending on which state you are in it can actually add up to a lot. The advantage of the Nordic system is that it is brutally simple. You pay your taxes and there isn't a whole lot of room to change anything about that. I lived in Sweden and Finland for a while. It's nice. Everything is taken care off. There is no drama around anything. You get sick you go the doctor. You get old, you are taken care off. Etc. When I moved from Finland to Germany as part of an international transfer in the same company, the company chose to raise my salary to compensate me for the raised tax burden ... in Germany. Reason: the Finnish tax system is actually pretty alright. After you pay your insurances and taxes, which is pretty much just kept from your salary, that's pretty much it. The VAT is high as well. But there's very little else to take care off beyond things like your rent. The German tax system on the other hand is death by a thousand cuts. A little tax here, a little insurance there, etc. None of it optional. Once you add it all up, it's quite a lot. So they compensated me. Of course cost of living is a lot lower so it was a quite nice raise for me. California is more like Germany than like Finland. But once you add it all up, you are paying a lot to a lot of different things.
- napierzaza 3y ago[dead]
- bbarn 3y agoThis is a very rose colored glasses view of Iceland. Having lived there until very recently, it is not a tech utopia by any means. There are very few jobs in tech, and no matter what you do or for how long it's rare to break 1M isk a month (which is about 80,000 - 85,000USD depending on the incredibly volatile currency) due to hostile tax structures. You can make less money developing software than you can fishing, so there's not a lot of draw to stay in the tech industry. Most of that geothermal energy? Yeah, it's sent to massive aluminum smelting plants. The entire government is also influenced heavily by the fishing industry, and there is a lot of resistance to change. The article also talks a lot about per capita investment. Considering Iceland has 375,000 people, that's hardly the stat to lead with. ~250,000 of them live in the capital area. Iceland is a wonderful place, with wonderful people, but the economy is collapsing and the warring 10 parties of government are effectively slap fighting each other instead of changing anything just so they can not be the Independence party. Inflation has been hovering around 8-10% a month for the last year. Iceland's real draw is its natural beauty, and the tourism it inspires. Unfortunately, what used to be a very inexpensive place to visit is now incredibly expensive to fly to, and also expensive to be in. People I know in the tourism industries have said they saw rapid growth post-covid, but rising costs have zeroed out or even made them less profitable than before covid. It is a place I love, and a people I love, and I will continue to go back and visit yearly. It isn't going to be the next hot tech spot though.
- culopatin 3y agoIt’s interesting you say it’s expensive to fly to. We went last year from the US on our way to Poland because it was cheaper to fly to Iceland and then take a Wizz air than to fly through Frankfurt. And I’m talking a 50% savings. It’s cheaper for us to fly to Iceland from the east coast than to fly to Dallas.
- bbarn 3y agoPrice flights today. I'm going in two weeks and paid 1500$ months ago. The same ticket is even more today. Three years ago it was a 500$ flight.
- busterarm 3y agoThe dirty secret of all of the Nordics and tech is that there aren't that many jobs and the majority of the work is outsourced to Barcelona where labour is much cheaper.
- yokoprime 3y agoI’m in managment of a Norwegian tech company which is part of a larger corporation. There are plenty of tech work in the Oslo region. It’s true that straight up “keeping the power on in the data center” type of work is in many instances handled by offshore resources, we are even using an Icelandic partner for some hosting services. But for developers, architects and technical project managers work is plentiful and pay is much higher than mainland Europe.
- busterarm 3y agoIn fairness, I have the least amount of knowledge about the Norwegian market. What I said could largely apply just to Denmark and Sweden. But it doesn't sound that far off. Managers are at home and many resources are elsewhere. An architect role is fairly senior... Also I'm not saying all of the work is outsourced -- I should have said "that many jobs compared to US tech markets". I found lots of developer opportunities in Copenhagen when looking around -- but everyone I talked to they had bigger teams working in Spain and did most of their hiring there.
- emptysongglass 3y agoExcept that most of the outsourced jobs aren't going to Barcelona in Denmark: they were going to Poland before it became too expensive then Ukraine before the war and now India.
- Tor3 3y agoIf there weren't many jobs then why on earth is it so difficult for tech companies to get tech workers? Well, that's a rhetorical question of course, because the truth is that there's plenty of work and tech people can pick and choose. Which is why it's hard for companies to get enough engineers and the like. Never in my life have I encountered anyone outsourcing anything to Barcelona - that's a first. At one point it was popular to try to outsource boiler-plate work to India, well that didn't last particularly long. You get what you pay for (and in the end you pay more).
- probablypower 3y agoI countered a post I found a bit cynical in the comments, but I figured I should also counter the overly rose-tinted substack post, as it lacks some context. > Iceland is also home to lots of "love refugees," tourists who found love during their trips to Iceland and never left. The foreign workforce in the tourism industry is probably filled with people like this, so you're likely to get that impression. Most foreign immigrants move here to do all kinds of jobs simply because the salary is better than in their home country. For example, I once met a guy who was a manager at a software company in Poland that moved to Reykjavik to clean because it paid so much better. It is quite common for IT related work in Iceland to be outsourced to mainland Europe. So while there is venture funding available to create new companies, the actualy labour of software development is outsourced. This to me is a red flag that counters the underlying message of the article. > Iceland stands as a global leader in renewable energy, with 100% of its electricity grid relying on renewable resources. Technically 99.9% as some areas require diesel generators. Iceland isn't a "leader". Iceland is geograhically lucky to have a lot of glacial meltwater (hydro) and shallow volcanism (geothermal). The virtue signalling around Iceland's grid is quite on the nose, particularly when it overlooks similarly lucky countries like Costa Rica. As an Icelander in this very field, I would say Ireland is the leader in renewable energy (if interested look up Eirgrid's DS3 project), as they're literally leaders in pushing the key technical limits of grids relative to renewable energy (i.e. inertia). One broad aspect that is overlooked here is the need for work and residency permits. It is incredibly hard to get either of those as a non-european foreigner. Both because the requirements are highly restrictive and the directorate of immigration does its best to find reasons not to provide permits. The only recent positive change, that some here on HackerNews might find use for, is the long-term remote work visa (https://island.is/en/get-long-term-visa-for-remote-workers https://island.is/en/get-long-term-visa-for-remote-workers).
- guerilla_prgrmr 3y agoI didn’t know that about Ireland. Thanks for sharing.
- Slava_Propanei 3y ago[dead]
- aaron695 3y ago[dead]
- 1letterunixname 3y agoAside: Has anyone managed to rent or lease a VPS or colo box in Iceland? I found the larger vendors of the island completely unresponsive.