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> don't punish individuals and companies trying to get work done and benefit your economy Getting work done is one thing, why should locals support tax breaks

> don't punish individuals and companies trying to get work done and benefit your economy Getting work done is one thing, why should locals support tax breaks for expats? "Technology companies including ASML Holding NV and Adyen NV called on the Dutch government to maintain a tax break that seeks to attract expatriates to the Netherlands. Ingrid Thijssen, head of the Confederation of Netherlands Industry and Employers, said the government for budget reasons is considering shrinking or scrapping a rule that exempts 30% of an expat’s salary from income tax for five years."[0] [0] https://www.bloomberg.com/news/articles/2022-05-06/dutch-tech-firms-warn-they-ll-lose-out-if-expat-tax-break-goes https://www.bloomberg.com/news/articles/2022-05-06/dutch-tec...

jacquesm 3y ago
As a local I support this. Simply because having more smart people eventually benefits Dutch society and the long term is far more important than the short term. Usually this argument is based in some for of jealousy, but consider: an expat gives up their current life to chance it all on another, has stupendously high private costs if they want to keep up with their family and has to start all over again from scratch which also carries a lot of costs. Giving them a five year tax break seems like a smart thing to do to me.
- NalNezumi 3y ago
  Another supportive argument (especially for Europe, maybe not US) is that those knowledge workers have spent a considerable time, money, and effort to acquire that talent/skill-set, and unlike your own citizen your country spent *zero* euro paying for that. Most European countries have heavy tax but very protective social services, including free education and universal healthcare, which only works because there's an expectation that when you come of age, you'll support the same system . So every citizen before turning adult (or paying taxes) are a net-debtor for society as a whole. Knowledge worker expats start at zero debt for you. Worst thing for countries like this is if its citizen get educated there and the best talent just moves to greener pasture (SV etc). If one can let go of their jealousy and see things practically, some tax incentive makes sense, but should be done smartly (not to cover rich people buying their way in while contributing zero long-term)
  - shiroiuma 3y ago
    >some tax incentive makes sense, but should be done smartly (not to cover rich people buying their way in while contributing zero long-term) Yeah, it should be tied to your job. If you work for a local tech company in a highly-skilled position requiring a lot of education and experience, then you get a big tax break. If you're just some rich person living off of investments, or you're a digital nomad working for a US company remotely, then forget it.
  - newaccount74 3y ago
    > there's an expectation that when you come of age, you'll support the same system I think this is the wrong way to look at it. You are looking at it from an individual perspective. I think it's better to look at it from the perspective of the society as a whole. Free education isn't a gift to an individual that they need to pay back. Free education is an investment into society. Society as a whole benefits from the fact that there are now well educated people around. You don't pay taxes to pay back the education you received. You pay taxes to support the society you live in. If you want to live here, you need to pay your share, and how much you personally benefitted in the past or in the future should not affect how much you have to pay.
    - NalNezumi 3y ago
      I'm not looking from an individual perspective, but a balance-sheet perspective. It's all lovey-dovey to see Free education as an investment and all, but at the end of the day, it's the accountant that will scratch his head looking at the red number on the balance sheet. I share your idealism that education is more than just economics/investment and you shouldn't think how much you paid vs how much you receive, but when push comes to shove, and the accountant is knocking on your door in panic because the number have been red for decades, you have to face the reality and make (hopefully rational) hard decisions. And that's the part I'm talking about. You can put your head in the sand and decades down the line to create a crisis like that of Greece, or you can see that to keep this system, you need to be smart and see things for what it is, and adapt the rules around it (such as incentivizing individuals, including from abroad, that is a net-contributor to want to come) while not losing the ideal. But everyone having your ideal is fine by me. I'm the guy that got a free education(even paid) up to a Masters degree and moved country right after.
- izacus 3y ago
  How exactly does that benefit the country outside driving up the cost of living for locals (which can't afford rents, houses or other services), since they actually have to pay taxes and are outbid by foreigners which don't really contribute that much to the tax base or have any intention of staying beyond the time in which they extract maximum wealth?
  - ouroborosidiots 3y ago
    > driving up the cost of living for locals. That means they are spending a lot of money they earn on the local economy itself no? So even if their taxes are higher, if they are creating value in the economy, the locals do end up seeing those benefits imo. From the perspective of a someone in country that loses a lot of talented/educated citizens to brain drain, If i were in charge of a country to which high skilled immigrants flock to - even if it is for a limited time, I'd try to see what I can do to convert them to permanent residents. It is a tricky thing to balance because the locals shouldn't feel like second class citizens in their own lands. But at the same time, if skilled people are migrating away - that's a lot of missed potential/opportunity.
    - izacus 3y ago
      What kind of money are they spending? Besides money directly transferred to wealth land owners via rents, some service owners, the rest goes back to savings to be spend after leaving the country. How are most netherlanders actually benefiting here?
      - ouroborosidiots 3y ago
        Land owners do end up paying tax on all the money they earn no? And if people are living in a country, they still tend to spend at least 50-60% of it in the local economy itself. (Anecdotal numbers based on expat friends' spending there). So the expats spend their home country resources for 20-25 years to get educated and be qualified enough to leave it and contribute to a different country's economy, taxes. Now the host country didn't spend any of it's resources in it's education, nor will it contribute to their healthcare - which typically becomes a burden only once they are older, by when they'd have left the country. Still seems like a net positive to me. Just can't put a number on it though. (wrt the 30% tax benefit).
- logifail 3y ago
  > having more smart people eventually benefits Dutch society Given that most of them don't stay for even five years[0], how does their temporary presence benefit society? [0] "80% of expat employees use the facility for 5 years or less" https://www.government.nl/topics/income-tax/shortening-30-percent-ruling https://www.government.nl/topics/income-tax/shortening-30-pe...
  - vidarh 3y ago
    It's they stay that short, how much do they tend to rely on taxable benefits? Someone who stays a few years at the peak of above average earnings might well be highly economically beneficial even at a steep tax discount. I don't think governments ought to compete on tax in general, but this is one where it might both be a net benefit and there is the arguable case that most tax systems are geared towards people in working age overpaying to compensate for the cost of caring for children and the elderly. Someone who comes temporarily during working age without a discount will get the downside without the benefit. This will be a bigger problem for the competitive ability in places with comprehensive social support mechanisms. Given dropping birth rates, trying to offset that to be an attractive place to immigrate to may well be worth it even if most leave again - especially as long as it's profitable too. But if your concern is that it doesn't attract people who will stay, maybe there are ways to incentivise that too. E.g. let people earn a discount where a portion does not pay out unless they stay longer.
  - epups 3y ago
    Having a foreigner stay in the long term could be worse, economically. Five years of taxation on highly-paid individuals - who are presumably producing far more than their salary to the companies paying them - is essentially free money for the country. You did not spend tax money on their education so far and are reaping all the benefits. Now, if they stay permanently, you will have to pay their pensions and healthcare, which are very expensive.
    - logifail 3y ago
      > You did not spend tax money on their education so far and are reaping all the benefits That is one possibility. Another is that the foreigner may have got the job instead of it going to a local. It's also possible that as a result of that the local may be unemployed and hence costing the country money.
DropPanda 3y ago
I live in a Scandinavian country. Our welfare system is structured such that people are expected to withdraw from the tax pool during the beginning and end of life, and contribute to the pool in between. Adult immigrants will benefit less from the system than locals over their lifetime, but may end up contributing as much. Adult immigrants with advanced degrees who come to work here for a few years and then move out are penalized quite severely by the tax system, to the point where I think it makes very little sense to do that. On my locally quite high $80k annual income (STEM PhD, 40yo), my employer pays an additional $36k in taxes and pension. Then I pay $22k in income taxes and 25% VAT on everything I buy. Why would anyone with an advanced degree from China, India or the U.S. come to work here? Lowering the taxes for a couple of years following immigration, possibly proportionally to level of education, would encourage immigration and would be ethically defensible.
- dr_dshiv 3y ago
  It works. After 6 years, I’m stuck in the Netherlands with a 50% tax rate and I love it.
- fragmede 3y ago
  For love, or if they have autistic children and a way to emigrate.
- deleted 3y ago
  [deleted]
- suslik 3y ago
  I did that (moved to a Scandinavian country), and it was an undeniably poor choice from a financial perspective - or rather a chain of poor choices that looked correct at the time. Paying almost 40% of my income that is rather low by global standards (although very high locally), while not planning to have children and never even once going to a doctor - none of this made any sense in the long run. I am the same age as yourself, and given the economic situation early retirement appears to be less and less feasible.
- georgeecollins 3y ago
  >> locally quite high $80k annual income (STEM PhD, 40yo) I love Europe, both for the lifestyle and the safety net. But the salaries are kind of shocking for an American.

jacquesm 3y ago

As a local I support this. Simply because having more smart people eventually benefits Dutch society and the long term is far more important than the short term. Usually this argument is based in some for of jealousy, but consider: an expat gives up their current life to chance it all on another, has stupendously high private costs if they want to keep up with their family and has to start all over again from scratch which also carries a lot of costs. Giving them a five year tax break seems like a smart thing to do to me.

NalNezumi 3y ago
Another supportive argument (especially for Europe, maybe not US) is that those knowledge workers have spent a considerable time, money, and effort to acquire that talent/skill-set, and unlike your own citizen your country spent *zero* euro paying for that. Most European countries have heavy tax but very protective social services, including free education and universal healthcare, which only works because there's an expectation that when you come of age, you'll support the same system . So every citizen before turning adult (or paying taxes) are a net-debtor for society as a whole. Knowledge worker expats start at zero debt for you. Worst thing for countries like this is if its citizen get educated there and the best talent just moves to greener pasture (SV etc). If one can let go of their jealousy and see things practically, some tax incentive makes sense, but should be done smartly (not to cover rich people buying their way in while contributing zero long-term)
- shiroiuma 3y ago
  >some tax incentive makes sense, but should be done smartly (not to cover rich people buying their way in while contributing zero long-term) Yeah, it should be tied to your job. If you work for a local tech company in a highly-skilled position requiring a lot of education and experience, then you get a big tax break. If you're just some rich person living off of investments, or you're a digital nomad working for a US company remotely, then forget it.
- newaccount74 3y ago
  > there's an expectation that when you come of age, you'll support the same system I think this is the wrong way to look at it. You are looking at it from an individual perspective. I think it's better to look at it from the perspective of the society as a whole. Free education isn't a gift to an individual that they need to pay back. Free education is an investment into society. Society as a whole benefits from the fact that there are now well educated people around. You don't pay taxes to pay back the education you received. You pay taxes to support the society you live in. If you want to live here, you need to pay your share, and how much you personally benefitted in the past or in the future should not affect how much you have to pay.
  - NalNezumi 3y ago
    I'm not looking from an individual perspective, but a balance-sheet perspective. It's all lovey-dovey to see Free education as an investment and all, but at the end of the day, it's the accountant that will scratch his head looking at the red number on the balance sheet. I share your idealism that education is more than just economics/investment and you shouldn't think how much you paid vs how much you receive, but when push comes to shove, and the accountant is knocking on your door in panic because the number have been red for decades, you have to face the reality and make (hopefully rational) hard decisions. And that's the part I'm talking about. You can put your head in the sand and decades down the line to create a crisis like that of Greece, or you can see that to keep this system, you need to be smart and see things for what it is, and adapt the rules around it (such as incentivizing individuals, including from abroad, that is a net-contributor to want to come) while not losing the ideal. But everyone having your ideal is fine by me. I'm the guy that got a free education(even paid) up to a Masters degree and moved country right after.
izacus 3y ago
How exactly does that benefit the country outside driving up the cost of living for locals (which can't afford rents, houses or other services), since they actually have to pay taxes and are outbid by foreigners which don't really contribute that much to the tax base or have any intention of staying beyond the time in which they extract maximum wealth?
- ouroborosidiots 3y ago
  > driving up the cost of living for locals. That means they are spending a lot of money they earn on the local economy itself no? So even if their taxes are higher, if they are creating value in the economy, the locals do end up seeing those benefits imo. From the perspective of a someone in country that loses a lot of talented/educated citizens to brain drain, If i were in charge of a country to which high skilled immigrants flock to - even if it is for a limited time, I'd try to see what I can do to convert them to permanent residents. It is a tricky thing to balance because the locals shouldn't feel like second class citizens in their own lands. But at the same time, if skilled people are migrating away - that's a lot of missed potential/opportunity.
  - izacus 3y ago
    What kind of money are they spending? Besides money directly transferred to wealth land owners via rents, some service owners, the rest goes back to savings to be spend after leaving the country. How are most netherlanders actually benefiting here?
    - ouroborosidiots 3y ago
      Land owners do end up paying tax on all the money they earn no? And if people are living in a country, they still tend to spend at least 50-60% of it in the local economy itself. (Anecdotal numbers based on expat friends' spending there). So the expats spend their home country resources for 20-25 years to get educated and be qualified enough to leave it and contribute to a different country's economy, taxes. Now the host country didn't spend any of it's resources in it's education, nor will it contribute to their healthcare - which typically becomes a burden only once they are older, by when they'd have left the country. Still seems like a net positive to me. Just can't put a number on it though. (wrt the 30% tax benefit).
logifail 3y ago
> having more smart people eventually benefits Dutch society Given that most of them don't stay for even five years[0], how does their temporary presence benefit society? [0] "80% of expat employees use the facility for 5 years or less" https://www.government.nl/topics/income-tax/shortening-30-percent-ruling https://www.government.nl/topics/income-tax/shortening-30-pe...
- vidarh 3y ago
  It's they stay that short, how much do they tend to rely on taxable benefits? Someone who stays a few years at the peak of above average earnings might well be highly economically beneficial even at a steep tax discount. I don't think governments ought to compete on tax in general, but this is one where it might both be a net benefit and there is the arguable case that most tax systems are geared towards people in working age overpaying to compensate for the cost of caring for children and the elderly. Someone who comes temporarily during working age without a discount will get the downside without the benefit. This will be a bigger problem for the competitive ability in places with comprehensive social support mechanisms. Given dropping birth rates, trying to offset that to be an attractive place to immigrate to may well be worth it even if most leave again - especially as long as it's profitable too. But if your concern is that it doesn't attract people who will stay, maybe there are ways to incentivise that too. E.g. let people earn a discount where a portion does not pay out unless they stay longer.
- epups 3y ago
  Having a foreigner stay in the long term could be worse, economically. Five years of taxation on highly-paid individuals - who are presumably producing far more than their salary to the companies paying them - is essentially free money for the country. You did not spend tax money on their education so far and are reaping all the benefits. Now, if they stay permanently, you will have to pay their pensions and healthcare, which are very expensive.
  - logifail 3y ago
    > You did not spend tax money on their education so far and are reaping all the benefits That is one possibility. Another is that the foreigner may have got the job instead of it going to a local. It's also possible that as a result of that the local may be unemployed and hence costing the country money.

DropPanda 3y ago

I live in a Scandinavian country. Our welfare system is structured such that people are expected to withdraw from the tax pool during the beginning and end of life, and contribute to the pool in between. Adult immigrants will benefit less from the system than locals over their lifetime, but may end up contributing as much. Adult immigrants with advanced degrees who come to work here for a few years and then move out are penalized quite severely by the tax system, to the point where I think it makes very little sense to do that. On my locally quite high $80k annual income (STEM PhD, 40yo), my employer pays an additional $36k in taxes and pension. Then I pay $22k in income taxes and 25% VAT on everything I buy. Why would anyone with an advanced degree from China, India or the U.S. come to work here? Lowering the taxes for a couple of years following immigration, possibly proportionally to level of education, would encourage immigration and would be ethically defensible.

dr_dshiv 3y ago
It works. After 6 years, I’m stuck in the Netherlands with a 50% tax rate and I love it.
fragmede 3y ago
For love, or if they have autistic children and a way to emigrate.
deleted 3y ago
[deleted]
suslik 3y ago
I did that (moved to a Scandinavian country), and it was an undeniably poor choice from a financial perspective - or rather a chain of poor choices that looked correct at the time. Paying almost 40% of my income that is rather low by global standards (although very high locally), while not planning to have children and never even once going to a doctor - none of this made any sense in the long run. I am the same age as yourself, and given the economic situation early retirement appears to be less and less feasible.
georgeecollins 3y ago
>> locally quite high $80k annual income (STEM PhD, 40yo) I love Europe, both for the lifestyle and the safety net. But the salaries are kind of shocking for an American.