In Germany, you get decent public transportation, great education and healthcare for your tax money. In Italy these things range from tolerable but inefficient to outright useless depending on where you are.
I've also lived in Germany, and while they do love their paperwork and forms you are more or less guaranteed a specific result if you comply with the process, and it happens within a determined time frame. In Italy you can do the same exact process 5 times and get 5 different responses, or simply no response at all as they will happily lose your paperwork over and over. In many cases officials ask for random documents that don't exist and are not listed anywhere as required, simply to make you leave and bother someone else.
I've become convinced however that all of these issues above are actually caused at their core by nepotism, cronyism and corruption. The most incompetent and corrupt get promoted to the top, and the rest are trampled until they give up or leave. There's no future and no opportunity for bright young Italian people.
Where I live businesses still pay protection money to the mafia, openly. Why would any young person want a part of that? This is going to get worse for Italy as young people, who would normally be the catalyst for progress and change, simply leave.
It's all about stuffing your pockets and those of your family. Because nobody can be trusted. You don't build for the future. You don't care about that now.
It seems that there is a fundamental lack of trust amongst Italians. And if there's no trust, you can't build on each other and focus on the long-term. Because you have to spend tons of time watching your back and taking care of yourself.
How will you fucking turn around such a culture?
This to say: I'm not sure Italians will ever turn it around, still I sometimes think it would be nice to come back and try to change things, but it is incredibly hard given that most of the young people there either leave, they accept shitty jobs or have the same mentality of their parents.
Take now... some hard-headed business man, who has no theories, but knows how to make money. Say to him:
"Here is a little village; in ten years it will be a great city; in ten years the railroad will have taken
the place of the stage coach, the electric light of the candle; it will abound with all the machinery and
improvements that so enormously multiply the effective power of labor. Will in ten years, interest be any
higher?" He will tell you, "No!" "Will the wages of the common labor be any higher...?" He will tell you,
"No the wages of common labor will not be any higher..." "What, then, will be higher?" "Rent, the
value of land. Go, get yourself a piece of ground, and hold possession." And if, under such circumstances, you
take his advice, you need do nothing more. You may sit down and smoke your pipe; you may lie around like
the lazzaroni of Naples or the leperos of Mexico; you may go up in a balloon or down a hole in the ground;
and without doing one stroke of work, without adding one iota of wealth to the community, in ten years you
will be rich! In the new city you may have a luxurious mansion, but among its public buildings will be
an almshouse.
[0] Not like that story: https://en.wikipedia.org/wiki/Apple_Inc._v._Samsung_Electron....
Top-down:
- U.S. Civil War and Reconstruction
- U.S. Civil Rights Act, enforced by National Guard troops
Bottom-up:
- women's suffrage protest movements of early 20th century
- educational reformist movements e.g. U.S. 19th century
- religious heresies -- Lutheranism
The weakness of "top-down" is that the dysfunction re-emerges when the top-down force is relieved -- if the Civil War and subsequent Reconstruction had fully succeeded, the National Guard would have had no need to walk the streets of Alabama with rifles in hand.
The weakness of "bottom-up" is that lasting, visible improvement takes years, and is therefore uninteresting to politicians chiefly looking to get re-elected, say, next month.
[1] Payroll taxes go towards the Social Security budget, which covers health insurance, retirement pensions, unemployment insurance, etc.
[2] Income taxes (and VAT) go towards the state budget, which covers debt interests payments, education, justice, police, military, etc.
Gross income: 100.000 EUR / year [2]
-------------------------
TAXES
- Income tax (28.600 EUR)
- "solidarity premium" (2.300 EUR)
- church tax (1.600 € - cumpolsory until you leave the curch)
SOCIAL SECURITY (compulsory)
- unemployed insurance (1.200 EUR)
- pension insurance (7.300 EUR)
- health insurance (4.500 EUR)
- long term care (800 EUR)
-------------------------
Net income: 53.700 EUR
Add to that what is often called gross-gross-income: Hidden from your paycheck is that social security has to be paid by your employer as well (so in this case amounts to 113.080 EUR which makes for a combined rate of 53%) [3]
[1] Hypothetical young graduate from Italy/Spain/France: Unmarried, no children and catholic
[2] 100k is not the typical pay for freshly graduated-from-school devs in Germany, but an attainable income goal after some working years nonetheless
[3] some exemptions in that employer-part, its a bit less than the employee-part
Smaller companies in Berlin like SoundCloud, ThinkCell, and Simplaex offer €100k+ for engineers with the experience they need.
Even startup salaries are nudging €75k on AngelList and StackOverflow Jobs.
Most countries have a system in which this is prevented in a tiered system (like the German example) where there is the utter bottom layer where you get just enough money to fulfil primary needs (health, roof, bed, food, power, water etc). This status often also means you get other things as well, like free education for people that really cannot afford anything. This basic needs for existence tier is no fun to live in as far as I've seen/heard, and is a pretty good motivator to get out of as soon as possible.
As far as I know, this is also why you don't see the same tent camps underneath overpasses you see in the US; unless you completely remove yourself from society (by choice or by mental status), there is no need for it.
Then, on top of that base layer, which is not something you usually get to, there are the layers that deal with cases where injury causes you to not be able to work, as well as simply losing a job (which is usually because your contract expired, the company no longer exists, or you did something yourself -- not the case where the employer simply said "we don't want you" -- they can't , not with a permanent contract). This layer gets you anywhere between 50% and 80% of your last salary in most countries.
Keep in mind, that with most of those constructions, a lot of systems are in place that prevent you from going that low, or staying that low, on the income/self-sufficiency ladder. This is because it was mostly modeled on the concept that enabling people to live is cheaper than having a bunch of people on the street, as well as simple compassion and empathy. A lot of it comes from historical concepts, but it seems to grow in the same direction.
The "basic" one (ALG 2) which amounts to ~9-12 EUR/day + rent (if it is a reasonable flat) [1] It comes with a lot of strings attached, like you have to use up your savings first and can recieve penalties if you don't show up for job interviews etc.
The "premium" one (ALG 1) pays you ~65% of your last 12 months gross income regardless of savings and termination pay. You guessed it, for that to make sense you would have to be employed at least 12 month before becoming jobless and at a sufficient pay-rate. Also it is limited to 1 year (after that -> ALG2)
PS: Health-insurance is included
[1] grossly simplified
Kinda beside the point, but that does not actually make sense. My home budget and car budget are different, but I collect them from the same source. I don't get a different job to pay for my car. Many countries pay for social security out of income taxes, or pay for general budget stuff out of payroll taxes.
I don't know what the real reason behind payroll taxes is. Probably it's mostly historical, as opposed to something you would reimplement if you were doing it from scratch today. But it is most definitely not simply because those taxes go into a different budget.
However it's important to note that many people don't actually pay that much income tax in France, or at least nowhere near the 20% to 40% number you're giving.
If you're married it depends on your spouse revenue, whether you have kids or not (especially between 0 an 3 yo because you get a tax credit on daycare, etc...)
I think the biggest difference between a Software Engineer in France and UK or Germany is not the taxes, but that the gross salary would usually be much lower in France.
until next january (finally!)
My reason to leave was my career. In Spain most things work via connections and meritocracy hardly exists. I went from a salary below the median and a dead end job to a top paying job with unlimited growth potential.
I love Spain as a holiday destination, but I will never go back to live there. I agree that the problem is way deeper and more culturally involved than tax rates and bureaucracy.
Taxes may be excessive but lower if the services received for the taxes are inferior or undesirable. Or if the tax is raised in regressive or arbitrary ways.
Germany may have a large, effective bureaucracy while Spain may have a smaller, corrupt bureaucracy. This I believe is demonstrated by the "Corruption Perception Index".
Welfare states really have nothing to do with how regimented society is.
In the south it's usually non-existent. The root of the issue is nepotism and cronyism, which gives very little hope to young people who would normally be the catalyst for change and improvement. Instead of participating in a rigged system they can just leave now, and most do.
Pretty much all bureaucracy happens online and my experience as an individual, is that it's minimal. I've never tried running a business , so I can't say anything on the bureaucracy there.
We don't have that nice Southern France climate, though.
[1]: https://en.m.wikipedia.org/wiki/Ease_of_doing_business_index
I know two who did, neither now intend to ever come back to the UK with its austerity and constant wish to move in the US direction. One later got relocated by his firm from Denmark to Sweden.
Of course, everyone has their own take on whether that's good or bad.
You don't have to pay 60% taxes to get these.
Regarding the taxes. They are not that discriminating! Because in absolute values other workers may pay to the state even less than programmers. A good programmer may earn up to $3000 every month, so $3000·5% = $150 is what he gives to the state in taxes. An ordinary worker earns (official stat) $350 a month, so he gives only $350·40% = $140. I am not sure about 40% though...
We also have very low prices here too. For instance, potatoes cost only ¢15/kg, so if you are European or American you are welcome to spend your money here : )
But the main reason of their poor life is corrupted government which have been here for many years and which didn't give them opportunity to invest properly (not everyone can be a programmer, I admit). We had several hyper-inflation periods with banks going bankrupt, with too complicated legislation no one seriously followed, unfair privatization of former state property, policemen killing and robbing people, etc.
...€2.32 for 1 kg of potatoes in Norway?! I got a millionaire idea.
People generally don’t mind paying a premium in time or money if they feel what they get it worth it. Everyone knows this is true, witness people happily stand in line for hours to buy an expensive but desirable item or experience.
In Germany and Sweden and a few other countries taxes are high but you can look around you and see that it goes on high quality public services and infrastructure. The bureaucracy is time consuming but you know when you finally fill in that form, something will actually happen.
Countries where people complain about taxes and bureaucracy are countries where the tax money disappears into a Black hole and where paperwork is pointless.
Now I live in Thailand with my girlfriend and while infrastructure is much worse and public services are of (much) lower quality than The Netherlands, yet here I will be able to make much more savings due to low (in my case pretty much non-existent except VAT) taxation.
I think it's better for us to raise our daughter here because we'll be able to give her an easier life where she will not have to work very hard and can enjoy her life. I think it's easy to save at least 35k a year here (if not more) where in The Netherlands, due to high taxation and high cost of living I should be happy to save maybe 15k.
I also think in the near future we'd have some property coupled with some other investments that will allow me to "retire" by 45 if not earlier. In The Netherlands I don't believe this would be possible either. I am 36 years old now by the way.
But the private hospitals are very nice indeed in Thailand and very affordable as well. A decent healthcare plan for me + girlfriend would cost us around 1200 EUR a year (total), while in The Netherlands it would be double that amount and we would just get basic healthcare (i.e.: not to be used for private hospitals).
I do believe it's highly unlikely I will lose my job (mobile programmer) in the coming years. I believe there will be plenty of work for at least the next 10 years and probably much much longer. And as a freelancer I might be less affected by ageism.
Isn't it arguable though that the politicians are choosing to cut social welfare instead of choosing to cut cronyism and political favors? In which case it's actually the left-wing which is abusing the economic crisis, using those in poverty as pawns in a bigger game?
> I want higher taxes if it comes, for example, with free university, like in Germany.
Is that really fair? Those in poverty are less likely to be qualified to go to university, so you are essentially subsidizing the wealthy with policies like that.
Using taxes in a manner that gives everyone the same benefit is seems like a reasonable thing, especially when compared to the places tax money seems to be spent to much (arms, military, open-loop energy systems, politics) or too little (i.e. too little for roads and bridges...).
The main difference is getting value out of your taxes. Value can be direct or indirect (the impact of education on your family, neighbors, friends etc indirectly impacts you as well, this goes for infrastructure, healthcare etc. as well), but having very little value kind of misses the point of a taxation system in an organised society. Might as well live in a forest by yourself in such cases. (but people tend to migrate to a country with a better system instead)
More than 50% each year have the formal qualifications for university in Germany.
See the table on https://de.wikipedia.org/wiki/Abiturientenquote_und_Studiena...
Columns are: Year | qualified(West, East, Total) | of those: going to university | students getting a degree
If anything Germany needs to increase the value and prestige of vocational education again (which is, for the most part, also free, plus salary).
> Is that really fair? Those in poverty are less likely to be qualified to go to university, so you are essentially subsidizing the wealthy with policies like that.
You are right, and that's precisely the reason why rich people must pay much more taxes than the poor if you want to sustain a welfare state.
I don't understand what you're saying here. Cutting social welfare is not a left wing position. Neither is avoiding to cut cronyism.
British exports have mainly gone up because gold (which doesn’t come from the UK, it just happened to be stored there) is being moved out of the country in economically significant quantities.
https://www.ft.com/content/0407854e-f9d0-11e6-9516-2d969e0d3...
This isn’t to say the Euro is brilliant or not, I don’t have the knowledge necessary to argue that topic pro or con.
The fluctuations since then have been within the same sort of range as is normal for such a currency: the fall since April is of about the same size as the falls in July 2011, Summer-Winter 2014 etc.
The narrative that the UK economy or currency is collapsing is trivially disproven by simply looking at a graph.
With respect to gold, the story you linked to says it's being moved by Chinese investors as a hedge against problems with their own currency. It's unrelated to the politics of the EU.
The UK economy has grown strongly since the vote. If you look at the GDP data you'll see there's hardly any difference in the last few years:
https://tradingeconomics.com/united-kingdom/gdp-growth
Note that Q1 GDP growth is usually revised upwards some time after publication, so I'd expect Q1 2018 to come into alignment with the other years after enough time has passed.
May I suggest that if you managed to lose large sums of money in an environment where the economy is growing and GBP is behaving as it normally does (and not "collapsing" as you put it, unless you think USD is also "collapsing"), then maybe the fault lies with you instead of Brexit?
As for where I live, that's got no relevance to the correctness of my arguments, has it? But I'll give you a hint - GBPCHF shows a similar pattern as GBPUSD. At the start of this year, the currency pair was at the same place it was in April 2016.
Your belief that the UK economy is doing badly just isn't grounded in anything concrete. At best you can say the Eurozone may be recovering somewhat. You clearly want to believe leaving the EU = sky falling, but it's just not - as evidenced by the fact that people are still moving to the UK in huge numbers!
It's possible the figure for 2018 will be slightly lower in the end, we'll have to wait and see. But GDP growth went from 3% to 2% between 2015-2016 and nothing much was happening then, so again, you're taking perfectly normal and quite small fluctuations in economic indicators and linking them all to Brexit, which is logically unsupportable.
As I said before, the strengthening of the Euro is related to economic changes in the eurozone and not anything to do with Brexit. That can be easily seen by just comparing GBP vs other currency pairs. Your trip cost more because Europe became less poor, not because the UK did.
As for the implication I somehow don't know what the UK is like, knock off it mate. I visit the UK every month or two because I work for a company based there, and actually am British myself. I am very familiar with how it's doing, and it's doing fine. Stop assigning arbitrary fluctuations in a single exchange rate to your personal political biases.
So more people than not still see the UK as better than elsewhere. Call me when migration turns negative.
GBP/USD:
* 7 Jan 2016: 1.46
* 20 Oct 2016: 1.22
* 15 Dec 2016: 1.34
Jan-April 2017 were at the level of early 2016, but still lower than just before the referendum itself.
Then it went back down again. It’s currently 1.31
That graph looks like two patches of normal currency variations separated by a vertical line on 24 June 2016. If that’s not a collapse, what is?
It's a cultural problem, not a regulatory one. And thanks to brain drain the young people are leaving instead of affecting change.
In contrast, the Euro affects entire nations, which can depress weaker economies as a result of it being tied to stronger economies like Germany. This affects every manufacturing and export business, with no way to become more competitive relative to stronger economies within the Euro zone. Wealth will continue to drain out to stronger economies. The currency itself is an insurmountable problem, it's not a level playing field, and there's no way to correct that without reverting to a freely floating national currency or political and monetary union. And the latter is not going to be acceptable to the public any time soon; the Euro zone is more likely to collapse before that ever happens.
I'd also suggest that a lot of the migration out of Italy and Spain is a consequence of the Euro-induced economic collapse, not the primary cause. Though it certainly will have a reinforcing effect. I've met plenty of Italians who migrated to work in the UK and US over the last decade+, and for most it wasn't because migration to the UK or US was a life goal for economic or other reasons, it was because there were simply no opportunities or a future for them at home. They would have liked to stay if they could. Open borders would have made this choice easier, but that's an enabling factor, not the primary driver. The situation for these countries is increasingly desperate; they need to have a future for their own people.
The Euro is icing on the cake, not the… I guess the metaphor would imply “the main course”?
He's arguing that, essentially, countries like Italy, Spain, Greece etc cannot reform their cultures and without the Euro would effectively be forced to re-calibrate their economies by a sinking exchange rate. That is, they'd be unable to afford foreign exports so they'd buy more domestic products, and that in turn would grow their economy. But in the euro there are no floating exchange rates, and people are very reluctant to pay themselves less, and governments are very reluctant to pay out less in benefits, and the EU/ECB is very willing to finance all of this with money printing and huge bailout "loans" .... so in the end there's no incentive to reform or make it easier to get things done.
Convenience of currency changes when migrating is certainly not the issue at hand.
Contrast with, say, Venezuela, where there's a fake exchange rate propped up by the government that the average person cannot get, and you start seeing some actual monetary friction.
This leaves lowering wages (at least in real terms) as the pretty much the only remaining way to offset low productivity growth in comparison with its industrial competitors. Unfortunately wages take much longer to adjust downwards because its very difficult to tell people to take a pay cut (over the long term the only way to do it on a large scale is to give low/no pay increases for seniority).
In the mean time, returns on investment fall and one suspects a partial downward spiral has developed as a result, where lower returns attract less capital and less capital investment leads to further poor productivity growth.
Do the rich countries of the EU have the same appetite?
As a matter of fact, Germany and the other EU countries do massively finance the poorer EU countries (per https://en.wikipedia.org/wiki/European_Union_statistics#EU_b...).
Problem is corruption: EU funds too often get shunted sideways (e.g. for Hungary, https://www.theguardian.com/world/2018/feb/12/how-hungarian-...).
https://en.wikipedia.org/wiki/Federal_taxation_and_spending_...
The EU budget is 1% of GDP while the US federal budget is 20% GDP, 60% of which goes on social security / medicare / safety net programs. US federal spending acts as a huge inter-regional stabilizer.
Regional transfers must significantly increase within the Eurozone if the Euro is to avoid breaking up or immiserating huge numbers of citizens.
https://www.npr.org/2011/01/25/133112932/paul-krugman-the-ec...
I replied to a comment here, not to Krugman. This should be obvious?
The problems are more complex and historical. The EU economic crisis have been abused by right-wingers to argue that we have a too heavy social system. In fact, the demolition of the social system in the south is precisely preventing it from really leaving the crisis. I want higher taxes if it comes, for example, with free university, like in Germany.