This is incorrect. The French like to complain about their taxes, but it's not that different from California.

Employee protection regulation absolutely is problematic in France, because it over-protect relatively small groups at the expense of everyone else.

Small and medium-sized businesses are most affected by this. The transition from 40-ish people to 200-ish people is where the system really breaks down for French startups, because you are too big to benefit from the early-stage incentives, and not large enough to have political clout and bend the rules.

No different than California? Let's see. I don't know the numbers well in Cali but I know what I paid in France. I'd be curious to see what one would pay in California for a similar situation.

For a 100,000 euros income as a sole proprietorship, I paid 42% altogether. From those 42%, 7% were income tax, the remaining 35% were Charges sociales which covers healthcare, unemployment and retirement benefits. When French people complain about high taxes for hiring, they complain about the Charges sociales.

When ones is employed, most of the charges sociales are paid by the employer so do not come out of the employee salary (but it's the same in the end).

Honestly, it's not as big a problem in tech where wages are quite a bit lower than the US to account for the high charges sociales. But for smaller companies hiring low skilled labor or for jobs that are traditionally less paid (customer service, etc...), then it is rather high.

And to add insult to injury, the organisms that are charged with collecting those charges sociales are a complete clusterfuck. For the same year, they calculated 3 different amounts and none matched what my accountant had calculated. Closing down the business and getting out of the RSI's list took 2 years and repeated letters.

That said, I do agree with you regarding employee protection. Those regulations are helpful and should be there but there's a balance to be had between both extremes. It's the same with renter's protection in France which are way too biased against landlords and also create a lack of available apartment (coming back to France after living abroad for multiple years meant that I didn't qualify for the new unpaid rent insurance the government created and locked me out of a third of the apartments in the city I wanted to live.

100k euros would be ~$124k. At that salary if you are single your marginal tax rate would be 28% federal + 6.2% employee social security + 6.2% employer social security + 1.45% employee medicare + 1.45% employer medicare + 9.3% California income + 0.9% California disability insurance = 53.5%. This doesn't include unemployment taxes (California or federal) which might be another 0.3-0.5%. Though for real math, the employer paid taxes should increase the denominator when calculating rate. This number includes employer-paid taxes, but you were doing the same.

Of course effective tax rate is much lower than marginal tax rate. Effective federal income tax would be 17.1%, effective California income tax would be 6.9%. This would make effective total tax 40.2% (it was 42.6% in 2017, before Trump's tax cuts).

Note that you’re basing your calculations on a EUR 100k salary. His 100k are the sum of salary and employer-paid charges.

It’s true that California taxes are high. But it’s also true that France taxes are higher. And, to be fair, bring with them higher entitlements.

They're higher in France but not meaningfully higher, hence my comment "not that different". In fact if you take into account the cost of typical private employer-paid healthcare, the cost might actually be higher in California.

And I maintain that taxes are just not high enough to be a major obstacle to entrepreneurship in France - and yes I am aware of the dreaded "charges sociales". The reason we hear so much about them is because complaining about high taxes is easy and not controversial. Unlike the topic of employee protection, which is deeply polarizing.

Looking at the numbers, you do indeed have a point. It would be interesting to look at the taxes and charge sociales for different ranges of income but, for software startups who hire highly qualified people, taxes wouldn't be an obstacle compared to Malaysia.

And I very much doubt that availability of qualified hires is the obstacle either since the level of engineering Grandes Ecoles is quite good (I might be biased there)

So, I guess factors for why France is not doing that well re startups would be Employee Protection, Kafkaesque bureaucracy when dealing with creating the company and paying the said Charges Sociales and lack of capital.

I guess it depends on what do you consider meaningfully higher. And we didn't mention VAT: from your "post-tax" income, 20% of it will be paid as tax anyway when you buy products of services. A reduced rate is applied for some products/services but it should be kept in mind that France collects more money from VAT than from all the other taxes combined.

When you compare California tax you should then add the cost of private health insurance and retirement plan. I'd be be really surprised if the sum would come under 42%. It seems to me you're getting a very good deal! I would not have expected the 7% average income tax in particular, is it due to the sole proprietorship? Would you pay more if you directly invoiced as a person?

I’m in SF and get paid 13,750 USD a month and take home $8328 after taxes (no 401k deferral) which is roughly 39.5%.

100k euros in the uk is about £87k. That would be £77k gross wage or net of £52500 - about 40% total tax, do not excessively different to France.

The same position that got you £80-100k gross in London will only get you €40-50k gross in Paris.

If accurate (links?) that's a function of supply and demand rather than tax.

Third option. The supply and the demand doesn't exist because of taxes.

In California it probably adds up to 35% for an average person making $100k. Lots of variables like if you are married, have kids, own a house, etc. And health care benefits depends of the employer through the ACA is helping for the time being.

You might want to also talk to small businesses in France that deal with with unexpected setbacks -- from what I have observed, this usually ends up with a dead startup.

Not sure what your point is, if you have no money, you are screwed whatever the country.

In a similar situation, many US startups survive, after laying off of their half their at-will employees. That's my point.

I don't know what perception of the country you have but it's not the Soviet Union you know, having financial issue is a valid reason to fire employees. The US is the only developed place without reasonable workers laws so it's more an exception than anything else.

In the US, we call this argument "Red Baiting". Sure, let's accuse our opponent of starving 10s of millions of people to death!

When there's a financial problem, there are multiple differing opinions as to what's reasonable.

But if you want to call the US the "only developed place without reasonable worker laws", you might want to consider Denmark. Because they don't have the opinion you're propagating.

Yeah but in Denmark they compensate with very high unemployment benefits paying up to 90% of your previous salary for up to 2 years (that's much higher than in France), I don't recall any of that in the US.

Comparing to Denmark, which has way better employee laws than the US, is weird regardless because of the difference in unemployment benefits and general safety net there is in Denmark. Free hospitals, free education, etc.

"Free?"

The personal income tax rate averaged 60.45% in Denmark from 1995-2018.

Those are some of the most expensive "free" hospitals and universities I've ever heard of.

If you want that view, then I guess nothing is ever free then, and it's a pointless word, so why even bother?

Also, the tax is more complicated than simply throwing out 60.45%. It goes:

- From 0 - 50,000 you pay 0% tax - Everything above you first pay 8% work market tax, and then from the leftover you pay - the amount you earned above 50,000 - 498,900 is 37% - the amount you earn above 489,900 is taxed 52,2%

So you don't pay 60.45% of the full amount. Never. You pay progressively as you go up.

Monthly that'll go something like, deduct 5,000 form your paycheck, deduct 8% of the remaining amount, and then 38% of the remaining amount of that. Now, what you have left is the remaining amount + the 5,000 tax free. And of course a bit more of the amount if you go into the top tax bracket.