5 ms·

the "wanting to be rich" thing is frankly a cliche. Lots of people like money in France as much as everywhere else, and I don't see much difference between Fran

by cdavid 14y ago

the "wanting to be rich" thing is frankly a cliche. Lots of people like money in France as much as everywhere else, and I don't see much difference between France and UK. It is certainly more prevalent in the US, but I would say the US are the exception. And if you want money, I am not sure startup is the likely way of doing it. Certainly, for people with the right diploma, working in the finance sector is much more rewarding financially speaking. Regarding the taxes, I will say what I always say: yes they are higher than in the UK, but you get more. So you need to compare what you're getting, otherwise the comparison is meaningless. I am working in the UK, where I paid around 35 % of taxes, so quite lower than France, where it would be closer to 50-55 % I think for my salary. But then, I get shitty health care and essentially no pension. And if I have kids, I will have to pay a lots of money to get them a decent school. I would love paying 15-20 points more taxes in exchange for that in the UK. IMO, the main issue in France is more the education system and how the incentives are highly biased toward going to a big company. The whole society is highly biased against failure, and the only path to a 'career' is through 'soft' areas. I am just over 30 and my parents don't understand why I am still doing engineering instead of 'managing' people, for example. This is the main reason why I have been leaving outside France for the last 8 years or so, not taxes.

mseebach 14y ago
Certainly, yes, services provided need to be compared along with the tax rate to get a fair comparison - but the idea that you get your taxes back is a red herring. There is a clear element of redistribution built in, there will always be some people who put in more than they use and some people who get out more than they put in - otherwise you could just let people buy these services for themselves.
- cdavid 14y ago
  Yes, of course, there is some redistribution going on. But that's not the main explanation of the difference between say UK and France taxes. If you remove pension funding alone, you get very close between UK and France, I believe, although I have not checked the numbers (it would cost me around 17 % of my pre-income tax to contribute to the French pension system, so I am basing my calculation only my case alone with all the associated caveats). As for letting people buy those services, this becomes more dependent of what you believe: I don't think it is that clear cut that there is no net benefit of having everyone getting the same basic health care in terms of costs, etc... A lots of what is costly in France is closer to insurance than anything else. Buying an insurance against disability is so expensive in the UK that nobody does it (which is why it is expensive in the first place). Since everybody has to do it in France, the system becomes much more viable since the pooling is very large.
  - mseebach 14y ago
    The difference between UK and French pension payments is that in the UK you actually own your contributions, in France you merely hope that a future politician won't decide that you're too rich to get a state pension ("means-tested benefits" is fancy word this in the UK). In Denmark it's a national sport for politicians to figure out just how many pensioners/soon-to-be-pensioners you can afford to piss off in a given election cycle and adjust various limits accordingly.
    - mercurial 14y ago
      I think the situation in the UK is only superficially different. Does anything prevent the government from increasing taxes on private pensions?
      - mseebach 14y ago
        I think there is a substantial difference in the political tactics required, mostly founded in the awareness of those affected. It's easy to promise that the lowering of pensions is temporary until the crisis passes, while once you've taxed somebody's savings (rather than properly borrowing them, which is very common - pension funds are enormous holders of public debt), there's no cover to pretend you'll give it back. EDIT: Also, public pension schemes can be allowed to become progressively underfunded to the point where it's impossible to fix and the responsible officials have long since retired. No so with private savings.
    - cdavid 14y ago
      This is only a superficial difference. On a relatively big economy like France, the difference between state-based pension and capital-based ones are very minor: in both cases, you're hoping that people who work when you retire will be able to pay for your retirement. Private funds in UK are severely underfunded by the way (although I can't find a reference on the exact number, which is supposed to be around 250 billions pounds), in the same that state-based systems are underfunded. The main factor for retirement is the 'working people'/retired people ratio (ration de dependence in French, not sure about the proper English translation), much more than how it is funded. Governments can easily change tax benefits/incentives on those funds, so the taxation aspect is not that different either.
babarock 14y ago
I agree with what you say, but it doesn't really contradict what I'm saying: - the "wanting to be rich" is a bit of a cliche, but it's still a major social taboo. As a foreigner who came to France, that was a major culture shock. True, people want to be rich, but politicians don't say it out loud. From what I see, much more efforts are put into helping poor people become middle class, than helping middle class become rich. - I agree with you on the taxes thing. After all, I'm living here by my own will and I like these social securities. Nevertheless, while it may work out well on the personal level, it doesn't encourage people to start companies. It's great that my kids' schooling is afforded by the government, but these high corporate taxes are still heavy on entrepreneurs. - I completely agree with the bias towards being a manager at a big company. Point in case, I work for a major investment bank. It's also true that failure is not easily accepted here. I know relatively few entrepreneurs (I'd say less than 5% of my graduating class 2 years ago) and those who "failed" (whatever that means) are having a hard time going back to the "regular" corporate path.
- estebank 14y ago
  > From what I see, much more efforts are put into helping poor people become middle class, than helping middle class become rich. I really don't see the problem with that.
  - babarock 14y ago
    And who says it's a problem? I only say it's, in my opinion, a subtle obstacle to developing a truely startup-friendly environment. Is society better off that way? probably. I actually like it here. But it's also probably one of the reasons why HN spent all morning debating the state of startup-land in France.

by cdavid 14y ago

mseebach 14y ago

Certainly, yes, services provided need to be compared along with the tax rate to get a fair comparison - but the idea that you get your taxes back is a red herring. There is a clear element of redistribution built in, there will always be some people who put in more than they use and some people who get out more than they put in - otherwise you could just let people buy these services for themselves.

cdavid 14y ago
Yes, of course, there is some redistribution going on. But that's not the main explanation of the difference between say UK and France taxes. If you remove pension funding alone, you get very close between UK and France, I believe, although I have not checked the numbers (it would cost me around 17 % of my pre-income tax to contribute to the French pension system, so I am basing my calculation only my case alone with all the associated caveats). As for letting people buy those services, this becomes more dependent of what you believe: I don't think it is that clear cut that there is no net benefit of having everyone getting the same basic health care in terms of costs, etc... A lots of what is costly in France is closer to insurance than anything else. Buying an insurance against disability is so expensive in the UK that nobody does it (which is why it is expensive in the first place). Since everybody has to do it in France, the system becomes much more viable since the pooling is very large.
- mseebach 14y ago
  The difference between UK and French pension payments is that in the UK you actually own your contributions, in France you merely hope that a future politician won't decide that you're too rich to get a state pension ("means-tested benefits" is fancy word this in the UK). In Denmark it's a national sport for politicians to figure out just how many pensioners/soon-to-be-pensioners you can afford to piss off in a given election cycle and adjust various limits accordingly.
  - mercurial 14y ago
    I think the situation in the UK is only superficially different. Does anything prevent the government from increasing taxes on private pensions?
    - mseebach 14y ago
      I think there is a substantial difference in the political tactics required, mostly founded in the awareness of those affected. It's easy to promise that the lowering of pensions is temporary until the crisis passes, while once you've taxed somebody's savings (rather than properly borrowing them, which is very common - pension funds are enormous holders of public debt), there's no cover to pretend you'll give it back. EDIT: Also, public pension schemes can be allowed to become progressively underfunded to the point where it's impossible to fix and the responsible officials have long since retired. No so with private savings.
  - cdavid 14y ago
    This is only a superficial difference. On a relatively big economy like France, the difference between state-based pension and capital-based ones are very minor: in both cases, you're hoping that people who work when you retire will be able to pay for your retirement. Private funds in UK are severely underfunded by the way (although I can't find a reference on the exact number, which is supposed to be around 250 billions pounds), in the same that state-based systems are underfunded. The main factor for retirement is the 'working people'/retired people ratio (ration de dependence in French, not sure about the proper English translation), much more than how it is funded. Governments can easily change tax benefits/incentives on those funds, so the taxation aspect is not that different either.

babarock 14y ago

I agree with what you say, but it doesn't really contradict what I'm saying: - the "wanting to be rich" is a bit of a cliche, but it's still a major social taboo. As a foreigner who came to France, that was a major culture shock. True, people want to be rich, but politicians don't say it out loud. From what I see, much more efforts are put into helping poor people become middle class, than helping middle class become rich. - I agree with you on the taxes thing. After all, I'm living here by my own will and I like these social securities. Nevertheless, while it may work out well on the personal level, it doesn't encourage people to start companies. It's great that my kids' schooling is afforded by the government, but these high corporate taxes are still heavy on entrepreneurs. - I completely agree with the bias towards being a manager at a big company. Point in case, I work for a major investment bank. It's also true that failure is not easily accepted here. I know relatively few entrepreneurs (I'd say less than 5% of my graduating class 2 years ago) and those who "failed" (whatever that means) are having a hard time going back to the "regular" corporate path.

estebank 14y ago
> From what I see, much more efforts are put into helping poor people become middle class, than helping middle class become rich. I really don't see the problem with that.
- babarock 14y ago
  And who says it's a problem? I only say it's, in my opinion, a subtle obstacle to developing a truely startup-friendly environment. Is society better off that way? probably. I actually like it here. But it's also probably one of the reasons why HN spent all morning debating the state of startup-land in France.