On the other hand, Europe has lower inequality amongst citizens, and an argument could be made to say that this increases happiness. What they are missing out on wrt fortune 500's is creativity that creates new technologies that pushes boundaries and revolutionizes the world (perhaps an oversimplification of the argument). Though they may not be at the forefront of this, it would be inaccurate to say that they do not benefit from innovations occurring in the world.
My argument is that they currently occupy the coveted position to benefit both from the inequality of other countries yet retain the benefits of a more equal society. Viewing the entire world as an unequal society, the winners would be the ones at the top of unequal countries, followed by the equal countries, with those at the bottom of unequal societies trailing. Ideally the entire world would all have equal societies, but in no situation would I think countries with equality strive for the benefits of those with unequality
Workers are also a pretty big beneficiary: look how well workers at recent Fortune 500 entries like FAANG are paid. Even after accounting for subsidised health and education benefits the average European developer is still lucky to earn even half of what the average US developer does. Sure it's noble for Europeans to want more equality but I don't think policies that reduce salaries are a good way to do that; better to lift the worse-off up than pull the better-off down.
FANNGS, by definition, are 1% of the Fortune 500. In term of headcount, it's even lower. They should not even be part of this argument. You can't base taxation policies around the personal experience of hyper-specialized, in-demand trained professionals.
Fortune 500 no1: Walmart. no2? Amazon.
Are you arguing that those kinds of companies have a upward pressure on salaries? Because at least in the case of Walmart and Amazon (excluding AWS), it's proven that it doesn't. And in terms of workforce, the low-pay employees that those companies hire overwhelm "well-paid" engineers from FAANGS a 1000-1. And that's not even accouting for all "red badge" contractors not lucky enough to get a cosy position at those FAANGS, who don't appear in the company's salary statistics, and are not in such a good financial situation themselves.
One can hold many opinions about the matter, and one can dispute that there is a net benefit at all, but it is clear that referring to this as "good for workers" is not particularly enlightening.
As much as I support local, family-owned businesses on an individual level, I also recognize that for the vast majority of people, cheaper goods are much better for their lives.
I do wish we forced large corporations to pay for any government benefits that their workers collect, though, and continue to push for living wages that make sense at the local level.
Transparently, I ask that question because I’m wary of creating a system where employers have a direct economic incentive to not hire people who would be likely to receive government benefits. Nearly the last thing someone on government support needs is employers not wanting to hire them.
If that means (as I think it does) that corporations are not individually tagged for their specific workers’ benefits, so be it.
I’m also opposed (though less strongly) to creating a taxation system where taxation levels are not reasonably predictable, given enough effort. If I don’t know whether Joe is going to cost me $30K/yr or $50K/yr and I’ve got 500K “Joes”, that’s $10 billion dollars of annual uncertainty. Even if you cap the uncertainty to between 25% and 75% of the range, it’s $5B. For $5B/yr, I can find a bunch of other arrangements that give me less exposure (most obviously using subcontractors who aren’t themselves “large companies”, but even if they are, it becomes “their problem” which is better than “my problem”).
Right, must be good for those workers too!
Take a look at the second chart (bottom of "Page 1", the third actual page considering the title page and contents page). [0]
Revenue may be small, but profits are huge, and market capitalization (aka "wealth") is absolutely massive. And that market cap is what feeds retirement plans & pensions. So while Europe is taxing people, the US is growing profits and wealth.
The World Economic Forum had this to say about Europe's tech giants in 2017: "In total more than a third of European tech founders are based in the UK." [1] That doesn't bode well for the future, when your economy is stuck in old industries, and the leader is leaving the party.
BTW, hats off to the Finns - not sure what they are doing with gaming, but they punch well above their weight.
When it comes to creating wealth, taxation doesn't do anything but redistribute it. In order to actually generate wealth, you need capital, and people who use that capital more efficiently & effectively will become richer. It is a virtuous spiral. And what's important is that every one of those high paying tech jobs is one less low-paying job. Most of the low paying jobs have existed for decades in various industries (esp retail), but most of those tech jobs didn't exist 20 years ago. I can only imagine how many high paying tech jobs there will be in the US in 20 more years, even though I expect low-paying jobs to still outnumber them.
[0] - https://www.yardeni.com/pub/yardenifangoverview.pdf
[1] - https://www.weforum.org/agenda/2017/10/meet-europe-top-tech-...
Sure, it's a virtuous spiral if you're one of the minuscule number of people that the spiral is pointing to. Otherwise, you see it for what it is, wealth being siphoned from Us to Them.
Also, the level of political control that huge companies almost automatically exert greatly minimizes democracy, leading to things like the bottom 50% of Americans having almost no bearing on the political sphere, at least at the federal and state levels.
Not happy with 1 share? Save more, buy more.
Want cheaper shares? Found your own company and you’ll have infinite shares for free. You’ll have to make it successful afterwards, though, to raise each share's value up from 0. That’s what "They" did.
You seriously misunderstand how little money people at the bottom actually have, and how little access to the kind of credit you'd need to start a business. Like, saving for a car when their old one breaks down will probably take some people months or years. Saving to buy shares????
> That’s what "They" did.
A minuscule handful of them, if even that. For every Jack Ma there's a thousand Mark Zuckerbergs or Bill Gatess who were born with a silver spoon and will die with a silver spoon, as will 3 generations of their children at the very least. The descendants of the people who laid the railroad tracks, the large slave plantations, all of these people are the vast majority of the top. Even people like Elon Musk are still coming from a background of pretty high privilege. The people who were born in the bottom 50% that you have ever heard of (outside show-business) can probably be counted on at most a few people's hands.
Plus, an economy can't run on business founders alone. It requires workers that actually, you know, do the work, and who are willing to be paid for a less than that work is worth (you know, 'profit').
If anyone is living in an echo chamber, I assure you it is not the 99%. It's the smug 1% hoarding wealth and justifying it to themselves by thinking 'anyone could do this if they were as smart/hard working/enlightened as me!' while forgetting the luck and connections and old money that got them where they are.
Sure, you can't succeed if you don't try. But you also can't succeed if you don't have anything to eat, and for the vast, vast majority of people, trying is likely to make that a real problem.
I also believe that it is our duty as society to make sure everyone can have a decent life even when not granted the same privileges others get for free.
Assuming everyone can put in the hard work and make it, you imply that everyone has or can learn "quickly" a markeatable skill, including the business acumen, the available free time and the mental/physical health required to succeed.
But the real issue is that even if everyone was able to try to get rich starting on an equally levelled field, our economic system can't allow everyone to succeed. We need poorer people to do employed jobs in order for their value produced in "excess" to be sent to shareholders and CEOs.
It just seems madness to me to have this global competition where the poor race against each other in order to be allowed to become one of the rich. We can do way better than this.
Competition is great, but at all levels.
Wealth creation is not zero-sum. Read PG's essay: http://paulgraham.com/wealth.html
Also some investment books: "A Random Walk Down Wall Street" "Rich Dad Poor Dad" "The Millionaire Next Door" https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_...
Have fun learning!
There would be lots of knock-on effects from this, such as more company perks to offset the large taxation of salary, but there are ways to combat that (tax benefits provided to employees as compensation). This would allow companies more capital to invest in R&D or expansion. Some of that money would go to higher wages (but if you distribute taxes more heavily to the wealthy along with this, it wouldn't affect median employee salary much).
A downside (among many, I'm sure) would be even more concentration of wealth in companies which might be used for non-free market operations, such as lobbying. It's all interconnected, so it's complex, but it also doesn't feel like we're in such a good situation socially, economically and politically that we should refrain from making large changes like that.
How many low paying jobs are taken by e.g. a high paying e-commerce job? Hundreds surely. And if there are less low paying jobs you can pay someone less to do them because there are so many people looking for those few jobs.
Market cap is a myth based on the fiction that is the share price.
> So while Europe is taxing people, the US is growing profits and wealth.
Tell that to 23 million Americans who can't afford their next rent, or can't afford to go to the doctor.
Europeans who keep tooting that "we don't need US salaries" tend to be the more privileged ones who will also inherit a house from their boomer parents and take it for granted, so they don't feel the stress of the rat race with skyrocketing house prices and income inequality.
So no, we DO want better paying jobs and lower taxes otherwise we'll go back to a feudalistic society where a select few own the housing and means of production through inheritance and everyone else and their offspring will forever be stuck working for the upper class so they can consume their products and pay them rent.
In most of the US, learning leet-code offers one a meritocratic lift up to the upper class while in most of Europe(except the East) it does not.
Wait, something doesn't add up here. I see many programmers migrating from eastern to western Europe, but not the other way around.
It is true that programming as a profession will offer comparatively higher standard of living in eastern Europe (when compared to other professions), but that's because the overall standard of living is lower than it is in the west.
Even if you're talking about just software devs, people still move to the west for higher salaries, though I believe there is more movement towards the US, especially since the software industry has a lot of local branches of US companies.
But I can tell you from the ground that at least the common perception is that you are generally going to be wealthier as a software developer in western Europe than in Romania, even though in Romania software devs tend to be much better off than the majority of the workforce (and even though software devs in Romania don't pay income tax on their salaries, which is a nice 15% rebate).
People generally don’t buy but rent and the rental market is set in such a way as not to gouge people. Still expensive but salaries are relatively high and in all other respects costs of living is very reasonable
> Today, Munich is Germany’s most expensive city in which to buy property, with asking prices reaching €35,000 per square metre in some exclusive developments, according to Engel & Völkers. The average price per square metre in the city is €7,630, dwarfing the €2,993 in Germany as a whole. [0]
That's wild. In USD per square foot, that's $3,700/sqft, $800/sqft, and $316/sqft respectively. Meanwhile, San Francisco's median is $1,100/sqft, the metro area's is $500/sqft, and california's as a whole is $315/sqft, remarkably close to germany as a whole. America's is $123/sqft.
Thank god for SF salaries (apparently about 150% of munich salaries).
[0] https://www.ft.com/content/9ba4873a-60f3-11e9-9300-0becfc937...
You now get a fast shrinking middle class and dismal living condition in lower class.
Of course, they could have combated this with more supply. Not sure if they have done so.
It just seems weird to me. Why are people paying such high prices when there is farmland so close by that you could buy and use to build some condominiums, townhomes, duplexes or even single family homes.
[0]: https://www.supermoney.com/inflation-adjusted-home-prices/
Rent is determined by what people with jobs can pay, property prices are determined by what international investors with deep pockets and easy credit can pay. Which one are you? If you are the former, you will be paying down a mortgage that you can barely afford. You will be a slave to the property. What if you lose the ability to pay? How secure is your paycheck really?
Keep your cash, and invest it somewhere else. You can find a new place to rent. You can leave if your community turns to shit.
The international investors with deep pockets own very, very, very few properties compared to regular people.
What if you lose the ability to pay? How secure is your paycheck really?
What if you lose the ability to pay rent? How does that make you any better off?
Keep your cash, and invest it somewhere else.
I have a mortgage with 75% of the principal left to pay, where the interest on the loan is somewhere between the third and the half of what I'd pay in rent for equivalent property. If I was renting instead of paying mortgage, I wouldn't have any cash to keep to invest elsewhere anyway.
You can find a new place to rent. You can leave if your community turns to shit.
You can also sell your house/condo and move somewhere else, at any time.
Doesn't matter, a rising tide raises every boat.
The point is that property prices have diverged from rental income, because low-interest credit from around the world is chasing properties, while stagnant wages imply stagnant rental income.
> What if you lose the ability to pay rent? How does that make you any better off?
I don't have to foreclose.
> I have a mortgage with 75% of the principal left to pay, where the interest on the loan is somewhere between the third and the half of what I'd pay in rent for equivalent property.
Between a third and a half? That sounds like a lot.
> If I was renting instead of paying mortgage, I wouldn't have any cash to keep to invest elsewhere anyway.
So you're saying your mortgage payment, taxes, insurance and upkeep is equal to rent? Where the hell do you live?
> You can also sell your house/condo and move somewhere else, at any time.
At any time? Yeah, good luck with that.
I bought my house 6 years ago. Rent prices have gone up about 30% in that time. I used to think my payment was crazy compared to renting, not I know of people renting much worse locations that are paying more, and I'm about to drop the mandated PMI because I dropped below 80% of the principal left to pay, so my payment will go down be a couple hundred more.
Give it time though! The Dublin NIMBYs scream and shout anytime anyone tries to build anything, and then wonder why only tech workers can afford to live in the city centre.
The median salary is about $106k a year which isn’t too far from €100k a year. I am not sure if these wages include non-salary comp.
And if you look at the class disparity we have in the United States, the middle class is almost completely gone now.
Given a fixed amount of resources, this isn't a choice but a matter of fact. You cannot do one without causing the other. This then becomes deciding what the lowest level you're comfortable having your fellow countryperson living at with the requisite cost to those with the means.
People don't consume resources, they consume goods and services. The IPhone is valued at a much higher price than the sum of raw resource components it contains.
Economic growth is what allows us to increase the amount of goods and services people can consume from a given set of resources. Economic growth is why a single farmer with modern equipment can produce more food than a hundred subsistence farmers could a few centuries ago. Economic growth is why we can have real-time high-definition video conversation with somebody anywhere in the world.
The more obstacles we put in the way of growth, the slower we improve our productivity, the slower we grow the amount of value we can extract from the resources we have.
I would counter that it isn't economic growth that enables the technology of today, but technical innovation that drives economic growth that enables either larger populations or a more wealthy population. Given unequal societies, economic growth is only beneficial for those who are already benefiting from the system and serve to increase inequality, but given an equal society benefits all. Therefore instead of worrying about economic growth, I propose that we invest in technical innovation that will drive economic growth as a byproduct and legislate for a more equal society to benefit the most amount of people.
Lastly, some pies are not growing.
All technology is a science, i think you are trying to draw is the distinction between fundamental science that discovers laws of nature, and indutrial kind that figures out the best process for manufacturing stainless steel.
>> "Often times technology precedes the science," This can happen by freak accident, but generally science has to find and researched some law of nature before you can take advantage of it to develop some product or manufacturing process.
People are not equal in many ways - I don't see why we always focus on wealth. What about influence, what about looks, what about education, what about family life quality, etc...
I completely disagree - increasing total wealth allows new things and is more important than how people judge their wealth relative to others.
You just restated your opinion without providing any new arguments.
> People are not equal in many ways - I don't see why we always focus on wealth. What about influence, what about looks, what about education, what about family life quality, etc...
Most of these things can't be redistributed.
that's not true. Especially if you view it from the angle of absolute poverty.
I wouldn't care that Bezos has another bazillion dollars due to economic growth - because with said growth comes more economic opportunities for the poor. Where once they had no economic value, there could be from being an amazon deliverer.
Where once there was no economic value as a subsistence farmer, the outsourcing of labour has generated economic value for underdeveloped nations. SO much so that China is now threatening the hegemony of the USA!
Economic growth lifts all.
Economic growth does lift all, but in an unequal society disproportionately lifts those who are already well invested in it. It will barely improve the lives those at the bottom with no equity in the market, perhaps with slightly better consumer-grade technology, but nothing in terms of income, social safety, or health that comes with climbing out of poverty.
You mean all of the workers at foxconn benefiting from their innovative suicide nets?
Literally any entity they interact with. And F500's interact a lot with a lot of entities!
Take Amazon. Employees in warehouses are low wage and hire and fire jobs. The CEO is getting richer and richer, not everyone is profiting as well as it could be.
What Europe would need is to excel in computer science as well as design and engineering. The topic is pretty lacking here and would need a push.
The result would be companies that could deliver experiences equal to the US or better. Take Facebook, a European version with the data protection laws here would be infinitely better.
Bezos is not taking enough cash from Amazon to be even remotely relevant to what they pay their warehouse workers. His cash compensation in 2019 was 1.6 million. Not sure how that reflects in 2020, 2021, but the point is that Bezos is only absurdly rich in theory He is theoretically worth hundreds of billions- but his actual consumption of goods, services, resources is a tiny percentage of that.
There is no direct link between Bezos net worth and allocation of resources to laborers, and attempts to paint that picture are misguided.
You criticize Amazon for their 'low paying' jobs- do you really understand the space these jobs exist in? I've worked warehouse gigs in college. I'm sure the Amazon jobs suck- but their minimum wage is what my supervisor got paid at a small building supply company. Amazon is actually considered a high paying gig in that arena.
If they raised wages of factory workers, profits go down, stock goes down, Bezos net worth go down. no?
They then also can hire a better class of workers, leaving some working there now no longer working there. And as prices go up, everyone loses some value to buying these goods, which is then less to spend on other things.
When a worker is willing to work for some wage and an employer is willing to pay it, both sides benefit, and society as a whole is not paying extra.
> ... profits go down
As does innovation which is paid for from those profits. And outside places, such as teacher pensions, 401ks, union pensions, state pensions, all lose money too. Taking this money from those who funded Amazon via stock purchases and secondary markets would ensure that later there is less investment available for new companies, now jobs, new industries.
Stock markets lets companies get capital to grow and usually employ more people. Taking out these incentives means less companies and less jobs, which means less competition among employers to hire people, which means less wages.
Doing things inefficiently, such as paying lots more than needed to clear wage floors, or paying a worker to do one task instead of two, or similar, means less value in society overall than if the things were done efficiently.
No "normal"employee/worker is achieving that. And he's working equally hard.
I think saying that other jobs are worse and amazons are so great so people should shut up and be happy is the wrong idea.
Instead we should strive to make all jobs better and when jobs are shit no one should be forced to do them. That's a goal humanity should achieve.
In the current world workers choose to work there.
There are usually many other choices available that were discarded by those workers. What if all replacements were just like those numerous other companies that the current workers didn't choose? That seems more likely than some company appearing that gives them vastly better options.
same old argument that marx has - that capital ownership (and by extension, capitalism) is the cause for such inequality.
I personally don't think all inequality is the same, and inequality is what drives people. There's a reason why communism, and their strive for equality, has so far failed as a form of governance, and as a form of market economy.
Absolutely! If there is no inequality there is no profit for working more. If I can't earn more by working more then I'll just do the bare minimum and still receive my equal share.
Luckily I never lived under a communist regime to witness it, but I've seen this happen in companies with middle managers who don't care: a few employees start working very little, a few more follow suits, motivated individuals complain, see that nothing happens and then start slacking as well.
And China, if anyone, has shown how protectionism, and making sure outside companies can only reach your internal market if they play by your rules, and favoring national companies over international ones, is a winning strategy in the 21st century.
The effective rate actually paid by the top 1% was around 42%, which is not much higher than now: https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/. . The US had also emerged as pretty much the only unbombed industrial country after a global war, giving it a significant advantage.
>so thoroughly debunked by now
Debunked where? Here's a random paper I found showing a strong correlation between economic freedom and GDP: https://mpra.ub.uni-muenchen.de/49220/ . https://www.cato.org/sites/cato.org/files/pubs/efw/efw2019/e... also has a graph on page 18 showing a strong relationship between economic freedom and income per capita.
>What is it with this obsessive focus on supply-side economics, and complete disregard for the demand side?
Demand is a factor in short-term market dislocations, but demand cannot create long-term economic growth. Growth requires that some of the value created be saved and invested, in order to increase capital, and no amount of demand will compensate for a long-term fall in investment.
The middle class is basically paying for the rich and poor and they don't have money to spend on the economy. We can't support our companies because their products are actually more expensive than outside products (companies pay a lot of taxes too).
It's more than known by every good economist that overtaxing isn't good for any economy.
[0] https://en.m.wikipedia.org/wiki/List_of_average_annual_labor...
And in all the countries the middle class pays for the rich and poor... unfortunately.
Something like tax rates statistics wouldn't tell you whether those taxes are actually paid - but tax revenue statistics do exactly this.
Imagine a person in Portugal has a 1000€ salary, and the state takes 40%, the person has 600€ to live.
A person in Germany gains 3000€, the state takes 60%, the person has 1200€, double the Portuguese.
Cost of living in Germany is higher, but not twice that much. And the cost of living already factors in some taxes, such as VAT, so it's not an apples-to-apples comparison.
Hm...that's a good point actually - net PPP-adjusted household displosable income is definitely lower in Portugal: http://www.oecdbetterlifeindex.org/topics/income/
The US is largely socialism and profits for the corporations and free market absolutism and costs for the working poor.
Doesn't seem like it to me.
These kinds of statements don't really add much to the debate - they sound like political slogans. To add to some light instead of just heat to the discussion, it is better to explain what you are saying. How are you defining poor? What tax rate do you think this group should pay? What tax rate do you think corporations should pay? How does that compare with other countries? etc.
(I don't mean to single out this particular posting, as I have seen political slogans used throughout this thread.)
The actual taxes paid aren't as important as the incentives they create.
Ding-ding-ding - you hit the nail on the head! The US' competitive advantage and special position in the world, including all those fortune 500 companies, doesn't come from its special adherence to laissez-faire capitalism, it comes from other historic advantages. The supply-side trickle-down cult didn't start until the 70's and incidentally real median purchasing power in the US has been in decline ever since.
> Debunked where? Here's a random paper I found
Here's a very non-random book I found: https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
Also, do I really need to remind you that correlation is not the same as causation?
According to Wikipedia, that book makes the argument that economic equality will grow over time. It doesn't show that countries with more economic freedom grow slower. To copy from the "Criticisms" section of that wiki page:
" According to Financial Times columnist Martin Wolf, he merely assumes that inequality matters, but never explains why. He only demonstrates that it exists and how it worsens.[36] Or as his colleague Clive Crook put it: "Aside from its other flaws, Capital in the 21st Century invites readers to believe not just that inequality is important, but that nothing else matters. This book wants you to worry about low growth in the coming decades not because that would mean a slower rise in living standards, but because it might ... worsen inequality." "
>Also, do I really need to remind you that correlation is not the same as causation?
Indeed, fortunately we also have economic models suggesting such a relationship should exist so it's not just blind correlation.
Meta-comment: I find this style of argument (make one claim, have the claim debunked, make a different claim and say "see I was right") to be very annoying, and I wouldn't mind if it disappeared from HN.
I will very happily argue for any of the points I've made, and I promise not to change topics and stay with a single point as long as is needed.
The winning strategy depends very much on what stage of economic development a country is at. Developing countries often benefit from some level of protectionism (this is the "infant industries argument," which Alexander Hamilton proposed), but developed countries benefit much more from lower trade barriers. In 20 years, it will be China that is pushing for developing countries to lower their trade barriers.
There is no such cycle in Europe, and it’s all because the lack of stock options. Without them, startups only offer very low pay with little to no reward, and good luck trying to attract the top talent startups actually need to succeed.
I don’t think this is accurate. Even in successful startups, most employees don’t get rich. Yes, some manage to navigate the complicated financials and can afford to execute their options, but typically only valuable roles are offered stock options and not all employees can afford to execute them.
Even if the company is “successful” and goes IPO, employees that execute their options can lose money while trying to execute their options (many Uber employees right now and plenty of 1999-2000 IPO employees).
In short, stock option incentives are gambling. I’m not sure they are a net positive even for the USA. Yes, we get harder workers for cheaper, but this depends on VC and Fed Reserve money being plentiful, which comes with other costs.
For early stage startups in the valley, pretty much all employees receive options. How many options, dilution and if if a positive exit will occur are all variables, but generally everyone gets an option grant.
Employees who don't stay long enough to vest (much or at all) don't get rich.
Employees who work in roles like office admin, security guard, janitor, intern, etc. usually aren't offered options (frequently because they are outsourced or independent contractors, etc). I'd wager that engineers, designers, and management are consistently offered options, but most other roles vary. Sales frequently insists on large cash commissions, so management probably wouldn't augment that with expensive early stock options.
There is inherent risk in owning stocks -- you need to time your exit well or a wise purchase in options/RSUs can turn into a financial liability or can significantly cut your profits if you exit the stock at the wrong time. I have a friend who exited FSLY as soon as their options execution turned to long term cap gains (resulting in a comfortable profit), but they could have more than doubled their profits (and been borderline "rich") had they stayed in until peak.
Employees don't always time their options/RSU executions well (because life is unpredictable). There is an opportunity cost to risking startup life at a lower up-front salary than working at a larger more stable company that pays more but offers no stock benefits.
Employees can't afford to execute their options/RSUs at the right time (eg. I could have owned significant CloudFlare stock if I was better at saving money while in university).
Employees don't always spend the money to gamble on options/RSUs and their tax obligations because they don't anticipate the company worth much (which can be a misperception or a lack of trust in management/owners).
Do most startup successes (which themselves are quite rare) result in most employees becoming rich? I've had my share of successful startup experience as an employee, and there was a nice payoff, but I'd hardly call it "rich" in any accepted definition of the word. At best, it's made up for the time I spent being underpaid compared to market rates.
Really? I thought most startup get a successful exit, result into their employees being modestly compensated, probably on par with the counterparts in mega corps.
At vest, in the US, a percentage of shares are immediately sold to cover taxes.
With illiquid stock - as in a startup - where there's no public market for it, and no one to sell it to, you can't really do that, and you're creating a tax problem for your employees.
The company can pay those taxes on your behalf - but that's expensive when a startup is explicitly paying in stock because they need the cash to grow.
The problem isn't taxes, the problem is founders who believe they are above the social contract. They want the benefits of a highly stable society with high taxes and high standards of living, but they don't want to pay their share of keeping that system alive.
The world needs more founders anyway. They are the ones who created the amazing wealth we are enjoying right now, not the politicians, bureaucrats, regulators or commissioners.
Who are you optimizing for?
Going by https://worldhappiness.report/ed/2017/ , figure 2.2, the US is happier than the majority of European countries.
>Who are you optimizing for?
I'm not trying to optimise for anything, rather I'd prefer people are given the chance to optimise for themselves how they spend their time and money, and the less bureaucracy they have to deal with, the easier it is for them to do this.
"Happiness has fallen in America
The USA is a story of reduced happiness. In 2007 the USA ranked 3rd among the OECD countries; in 2016 it came 19th. The reasons are declining social support and increased corruption (chapter 7) and it is these same factors that explain why the Nordic countries do so much better."
> I'm not trying to optimise for anything, rather I'd prefer people are given the chance to optimise for themselves how they spend their time and money, and the less bureaucracy they have to deal with, the easier it is for them to do this.
You've bought into the propaganda propagated by the ultra rich via cable news and other outlets in order to justify their continued accrual of more and more of the world's wealth: That economic freedom is just freedom from taxes - it's not freedom from ever worrying about going bankrupt or becoming homeless if you get sick. That society works better when nobody cares about the well-being of their fellow citizens, that the freedom to care about nobody but yourself somehow makes us stronger as a society, not weaker. That publicly run institutions are always just 'bureacracies' and 'inefficient' - not the solid foundations upon which other parts of society and the market can rest, which many public institutions prove every day, by freeing citizens and companies that rely on them from having to pay for one or more layers of shareholder profits, freeing them to invest in other things instead. The talking points you are reiterating sound good on their surface, but in reality they are just that, talking points. The reality of what the world becomes when they are used as policy is being felt all around the world these days.
Happiest countries don't have the highest suicide rate.
Nordic countries do have a significant portion of population living in areas where SAD is prevalent, which naturally causes increase in suicide rates. Yet they are not the highest rates.
What would Europe stand to get from having more Fortune 500 companies? It doesn't seem like it's helping in the US at all. On the other hand, Europe still has a much better lifestyle for people who are not rich.
We must end the concept that nations are subject to the market and corporations whims. That's the narrative they are spreading, but they can't do without Europe's profits, so it's better we realize that as states we have more power over them than they'd like to admit.
The situation is far more dire in the EU than even that would suggest.
Spain and Italy (#3 and #4 largest economies in the EU) will spend the next 20 years just trying to get back to where they were in 2007, and will have lost a minimum of 30 years to net economic stagnation. That's the good scenario.
Prior to the virus, France had seen zero net economic growth for 12 years. That's despite adding three million people to their population, which means the pie is shrinking for each French person.
Germany had seen zero net economic growth for 11-12 years. With the virus hit they'll probably go a net 20 years with zero GDP per capita expansion.
The same scenario is playing out across most of the EU's members. There's no growth to be found anywhere outside of the Baltics and Ireland (11m population combined), while social system costs continue to climb and demographics continue to age. You can see this erosion effect playing out for example in the collapse of EU spending on infrastructure (which has fallen below the US level as a share of GDP).
An alternative interpretation is that the high degree of taxes and regulations in Europe is preventing the growth of new companies there, resulting in fewer jobs, opportunities and investments. If Apple was a European company Europe would be getting a lot more taxes from it. In spite of Europe's larger population, in the past few decades it has produced way fewer new Fortune 500 companies than the US (and now also fewer than China).