>The people you rob (the ones paying the bulk of taxes) have a lower incentive to produce.
Sure, the thought of being worth only 150 billion dollars rather than 300 would stop Bezos from starting Amazon.
The fact of the matter is that the EU has a staggeringly low output when it comes to tech innovation compared to the US. Their policies and regulations shape this.
Depends what you’re comparing to. Total comp for great engineers in Oslo is lower than for their peers in Silicon Valley.
They're not particularly cheap in the US either. Toronto might be better but hi-tech salaries are going up as well.
I wonder how the wealth tax actually works. Do I want people to invest in my company if that's just going to increase the valuation and my tax bill? Surely there must be some exceptions...
Marginal personal income tax rates, which is what others keep comparing here, are only relevant for wage earners.
Moving to the US I was able to 5-6x my income (from what I could have realistically made) , while reducing my tax burden by 15 percentage points, and so I've been happily living a workaholics' lifestyle since.
Looking back, it really boggles my mind how much engineering potential is squandered in Europe. You'd have to be an idiot to want to work hard given how raw of a deal you are getting (work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!) and people understand that intuitively (hence pushing for ever fewer work hours or even days because what else is there if your salary is essentially capped and you quickly hit a 50 % tax rate (when combining income tax and social security) for every additional hour worked).
</rant>
I really don't understand this take. Why so many engineers feel entitled to have more than the average working Joe? If you are employed, our work is not risky, doesn't consume all your energy or your time, and so on.
I fully understand the _economics_ behind our salaries, but I am more than happy to give 45% of it to the society as a whole, so also who cannot afford the economy of scale (e.g., nurses, teachers), can still have a decent life.
I really cannot grasp the individualism about "I know how to write code, I deserve a better life than 95% of the population".
What if we worded this in a different way: "I have a skill which is more in demand than the skills of 95% of the population"
Still, it doesn't mean I _deserve_ a high salary: I totally get why I get it, but I don't work harder, or studied harder, or really did anything more special than 95% of the population.
So, while I am able to earn more, I am happy to share part of it with the society as a whole, and this is why I am happy about my level of taxes, compared to the services provided.
There are wastes? Of course there are! So many! But the solution to "governments waste money" is not "less money to the governments", is "more accountability".
This is of course my view of the world, but I still haven't found anybody that explains why my job deserves to be in the top 5% earner in my country, apart from being just a consequence of the fact that my job scales to billions of users due its very nature (that is completely inconsequential from the choices I have made), while other jobs have physical limits and they don't scale.
On a more ideological level it feels like you're looking for some sort of moral or "greater truth" behind the economics, but I'm not sure it's there. You've shared your personal beliefs and motivations, and seem to have lots of conviction to guide yourself, so why ask someone else to convince you there's a deeper cause? Just use your results to act how YOU want to impact the outcomes of others.
I don't think any other (widely popular) work occupies so much of a one's mind as software engineering.
The difference is not that US workers earn more on average, but that being an engineer doesn’t make you automatically rich in Europe like it does in tbe USA.
You're missing something here. You can omit the first sentence. People already believe they deserve a better life than 95% of the population, even without being able to code specifically.
It's not "I am a engineer, thus I deserve to have more", it's "I deserve more, what part of my life can I use to say this?".
If everyone desires to be above average and strives to produce more, earn more, then over time the average will rise. This is good.
Just because the nano machinery is invisible, doesent mean it cant spin great things from nothing. Half the giants you see today, were nothing one generation ago.
Above average investments (time , effort & money) have a natural feeling of entitlement for above average returns.
Cost of getting an engineering degree of value is nowhere near any "average" degree.
Recent years have driven the median cost up and the median returns down. Hence the laments about "college is not worth it"
Overall, it's a trade-off, though. You are right about the US opportunities, but there are downsides, too:
- crime (you get crime everywhere, but the US has a particularly and unnecessarily high level of serious crime like gun crime - e.g. school shootings happen pretty regularly);
- not everyone has good healthcare & social services (I am aware you will not personally be exposed to that, as you will have private healthcare; but it even bothers me if people around me are ill and cannot afford to get cured. I don't want to live somewhere where I can get a regular check at the Mayo clinic and my neighbor cannot afford their emergency dentist);
- low average education level (people generally don't know much of the world, history, literature).
- cultural life (theater, classical music etc.) is very uneven distributed.
Also, US taxation isn't that low in general, it dramatically depends on the state you live in (TX 0% state tax versus NY, MN etc. >40%).
There are places in Europe that have small tax rates (CH, LU), but they are not the best places to live for everybody. Everyone needs to weigh their priorities and match with the overall "package" (e.g. Canada is a good compromise: near-US salaries but Europe-like education of the general public) - and in any case, not everyone is free to leave where they currently reside.
Austria in particular has rather low salaries (but also low rents) - but places like Vienna have a magic feel to it that just doesn't exist on other continents. In comparison, in neighboring Switzerland are very high (anyone with a tech Master's degree would be on a six digits salary), but with a huge salary gap between locals and expats for doing the same job.
(I have lived in the UK, US, CH and DE.)
I love Europe: its history, its music, its art, its architecture, its legacy - yes! the good and the bad -, its food, its cultures. But from my point of view we are killing ourselves, choked in an endless decay, metastasizing bureaucracy, and never-ending hopelessness.
I'm sure the Nordic Country are happy though, and that's the problem: American tend to compare the worst of their country with the best of our continent.
Everyone does that. There seems to be a type of bragging that works by emphasizing how much more dangerous one's own country/state/town/village is than someone else's.
Yeah sorry I can't fly to another country because I'm not satisfied with -only- a family home.
But I'm originally from Italy, and the tax rate is exorbitant down there as well, with ridiculously low salaries.
You do you, but there is more to life than gross income from your employer. This is why I'd rather stay in this continent.
Here in DC metro, a mid-career developer should be able to afford a home without much trouble. Many of the best jobs are well outside the city (Tysons to Ashburn corridor) where housing costs aren’t terrible.
If you're lucky. The salaries in my country are so abysmal that nobody in my generation can buy a house: the only one with houses inherited them or have rich parents.
> and so o I've been happily living a workaholics' lifestyle since.
That is one key aspect. I'm not a workaholic and most other people aren't either. I do somewhat enjoy my work, but I work to pay for my live, not the other way around. I make a decent salary and work 35h/week with 36 days of vacation. I do pay a lot of taxes, but I live in a city with pretty good and affordable public transit, I got my university education for free (okay, I admit, I paid a total of 600€ for my bachelors), etc.
In a well governed country, you don't only pay taxes but also receive something in return.
> work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!
This isn't necessarily a result of high taxes, its also a result of Europe being much denser populated than the US (or Australia), limiting the supply side for construction land. The kind of the construction also plays a role, the average newly built European home is substantially more solidly constructed than the reference in the US.
> hence pushing for ever fewer work hours or even days because what else is there if your salary is essentially capped
Have you ever considered that many people would much rather have more free time than more money? Beyond a certain level, increased income doesn't correlate with increased happiness/wellbeing. Where this level is certainly depends, but it is much lower than many people anticipate.
You will bankrupt from your accountants’ bills.
The EU has a lower output because there are fewer investors. One successful startup creates wealth in the hand of knowledgeable people who can create the next startup. There are simply not thousands of millionaires and billionaires who can successfully pick the next round. There is also less of a network effect where venture capitalists can offer their portfolio as leads for the sales teams of their new investments.
The Nordic welfare levels can turn out to be the path to European success. It's easier to start an idea when failure doesn't end in an existential crisis.
Perhaps Peter has earned his cash by working really hard. But perhaps not, perhaps he just exploited other people to hustle his way up some corporate food chain.
If Peter did in fact work hard and now he's stripped of the results of his labor while being told that probably he only managed to accumulate capital because he was just exploiting others, what incentive landscape does that create.
Is a lot of profit a function of factors much less commendable than creating value for others? Sure. But by lumping in the productive people with the parasites, you are undermining those people who deserve your protection the most.
At the very least, you have to start out with wealth or a strong support system (which is down to luck in your input conditions), or get fantastically lucky in your first(-ish) attempt at starting something.
Then, if you want to make the kind of money that, say, Bezos or Musk makes, you have to make the kinds of decisions that many of us simply would never make, because they're morally reprehensible. I wrote another comment about this [0] on an article about a week ago, but basically, in the very best case scenario, once you're past the point where more money would make no material difference in a healthy lifestyle (which is going to happen, at the very latest, somewhere in the millions), if you're using the excess to make yourself more money, rather than help improve other people's lives, you are being selfish at a level that makes you effectively indistinguishable from evil.
> if you're using the excess to make yourself more money, rather than help improve other people's lives, you are being selfish at a level that makes you effectively indistinguishable from evil.
If you're using your business to create value for millions of people, you are in fact improving millions of lives by the amount of value created. If you capture a little bit of that value for yourself and become fantastically rich, good for you and good for the system that enabled this whole thing. Even better for you if you decide to give some of it away, but to call you evil if you don't? I suppose your own belt could be tightened a bit more so that you could give more away?
Other than what arises from rent-seeking behavior, profit is not inherently immoral.
If you take enough profit to make billions of dollars for yourself, that's bad.
Because no one person (or family) can ever realize anything resembling a proportionate benefit from that money, all you're doing is raising your dollar-denominated high score, at the expense of all the other people you could be helping more if you invested that money back in your business, or paid it in taxes, or invested in other local businesses, or any of a thousand other ways to make it work for the world instead of just being a selfish Number Go Up for you.
Once again, profit is not immoral. It serves as an important signal for capital to be directed in the value-creation cycle that ends up producing wealth for everyone. In the words of Isabel Paterson: "Production is profit; and profit is production. They are not merely related; they are the same thing. When a man plants potatoes, if he does not get back more than he put in, he has produced nothing."
You are saying that if a man who planted potatoes harvests them and keeps some for himself above and beyond what he needs to subsist, he is evil. I'm really not sure how you justify that position.
I don't, because that's not what I'm saying.
If you actually read my post, I did not say that taking any profit was evil. I said taking enough profit to make you a billionaire was evil.
The scale of what it takes to become a billionaire is absolutely mind-boggling. I might, if I am lucky, make enough in my lifetime to have a million dollars saved up.
I would have to work a thousand of those lifetimes to get a billion dollars.
And yes; someone who is a billionaire keeps that money in stocks and things, and it's true that it's not just a pile of cash...but that doesn't actually mean that it's usefully "in the economy". It's still theirs. (And remember, unless you buy it as part of a direct issuance from the company, buying stock doesn't actually put more money in their pocket.)
Full story here: https://www.propublica.org/article/lord-of-the-roths-how-tec...
I can tell you what kind of incentives such a system promotes: different ones!
In particularly a welfare system gives incentives to people who want to create something out of intrinsic motivation, not because of financial motivation. Many of the things the most profitable companies use are actually but on tools and mathematics that were created without any financial freedom.
So I would rather reserve the word "toxic" rather for the current system consisting of purely financial motivation to hoard money that your are so vigorously defending.
2. Progressive taxation is the basis on which the best places to live were built. This is an empirical observation, make of that what you will, but it's strange to give your gut feelings of "basic economics / human nature" more weight than objective reality.
3. Why do is the word "rob" applied to taxation? Without the state to at least enforce laws, enforce property rights, and physically protect you, there wouldn't even be any wealth creation. Your current life is only possible because you are inserted in a society, it's only far you have a debt to pay society back.
This is the kind of minimalist state that libertarians would agree to. People talk about robbery when the state is spending money on arbitrary things.
The fact that most people don’t agree is why tax is taken by force.
I'm quite confident that a lot of thought goes into pretty much all government spending, even if a proportion is misguided, counter productive, and non-essential.
Sure, but at some point it starts to sound abusive, like a narcissistic parent telling their child that they and not the little child owns their accomplishments, because without them the child would not have existed.
The state, at least in the US, is supposed to work for you, the people. The burden of proof is on the state if it wants to tax more and expand itself. It needs to justify every penny of the taxpayer's money it spends. It simply cannot take the position that everyone's output is by default a debt owed to it, and by its grace alone are the people allowed to keep some of it. That's the talk of the divine right of kings.
One of the things that are never really discussed in these kind of things is that you are already paying for welfare, its just not even. Poverty leads to crime, which costs you, either in lost property, crap neighbourhoods, or in insurance.
unlike the US you can just leave and not pay.
it seems to me people outside countries with decent welfare have all of the issues?
something like give me private jets or let me starve by the side of the road, nothing in between must exist.
i actually enjoy paying for people playing video games all day while smoking weed and getting drunk while businesses scream how they cant find employees. Specially the combi self centered and assholes really cant find anyone anymore.
You have to pay what it costs to hire people. If the offer isn't competitive with not working you are going to have to pay more.
Long term employees are also leaving for better jobs.
ill gladly pay for the transition back to sanity.
Also, banks should chip in a lot more than they do. They’re basically printing money and should be taxed harder.
And yet when the top tax rate was 96%, Americans still produced.
When I was 12, I was impressed by Atlas Shrugged, but by the time I was 17 I realized it was ludicrous.
People are forgetting that the high tax countries are enjoying the fruits of lower-tax countries labor.
Technology and drugs are the big ones. Big, evil companies create life-saving drugs and generics are created and sold for pennies to these countries.
With no incentive to create (ie: large profits), humans will definitely not advance.
Money is also freedom. The less we are able to keep, the less free we become (and more dependent on the government/state).
Humans won’t create without incentives? That’s frankly ridiculous.
Do you think people do Office Space style work out of the goodness of their own hearts?
> That’s frankly ridiculous.
The feeling is mutual.
The world is full of software that people built because it’s interesting and/or useful. Linux for example was created as a hobby project during college.
People love to create. Just because YOU wouldn’t touch software doesn’t mean it’s true for everyone.
If you're so inclined to work on things for your own pleasure, please do give us a hand by solving some of these.
And I do contribute to open source, but I prefer to work on stuff that isn’t connected to some company.
That's exactly my point.
I work in a field that is really very important, but it's not interesting enough for you to work on purely for your own amusement. That's why there needs to be a financial incentive.
> "Esqueleto, a SQL DSL for Haskell"
The code specific to the business is proprietary.
Obviously.
You seem to be under the impression that unless people are coerced they'll only work on projects that entertain them in some way, like a child playing with bubbles.
I feel sorry for you that you have such a poor opinion of humanity. Personally, I think humans are curious, collaborative, and like to build things. Yes they like to build things they find interesting but interesting is a wide concept. If my Mom got cancer then I'd probably be more likely to work on cancer software.
I want to live in a world where people can voluntarily work together to build things based on shared interests, whatever those interests might be. A world where people aren't forced to submit to business owners like you.
I’m aware that people like to create things, but that depends on what those things are. Your offer to work on cancer software to help cure your mother’s hypothetical cancer only comes with intrinsic motivation. If we relied on that, we would not have made the progress in that field that we have made, and many more people would be dead.
My mother has cancer. I’m quite glad the scientists working on researching better treatments are actually getting paid.
> A world where people aren't forced to submit to business owners like you.
It’s curious that you have such contempt for entrepreneurs on a website themed around entrepreneurship and published by a venture capital firm.
---
I get the feeling you’re no stranger to the words “anarchist”, “ancap”, and “communist”, so I’ll just leave this here:
>writing software for banks or insurance companies
Look at Gimp. It's the software that people like to write but not the one designers like to use.
There was this submission: 'Ask HN: How might HN build a social network together?' [1]. With Mastodon, people create a social network, but one that is unnecessarily inefficient. Why hasn't that submission led to a better social network?
Ford is quoted with saying: 'People would have asked for faster horses'.
How do you give the people with new ideas the power to implement them?
It’s no wonder projects like GIMP don’t take off because these developers work on it in their spare time. They don’t have the time or energy to fully commit to it because they’re busy being forced to write someone else’s software.
Linux, for example, was built over the course of 8 years while Linus Torvalds was in college. He was able to do so because his college in Finland provided room and board and the freedom to pursue his interests alongside his studies.
You proved my point again. Everything in your responses is about YOU and YOUR software and what people can do for YOU.
If you want someone to work on your project you should have to convince them that it’s worth their time. Instead they rely on you for insurance and a livelihood. If you think your employees would still work for you if they had the freedom to pursue their own interests then I have a bridge to sell you.
This is interesting because you look at the situation from a different point of view. I was wondering how somebody can influence others to create change and you focus on how to remove influence to create change.
I believe that you can never supply enough resources for people to feel free to implement change. What are the basic needs that have to be met? I would like to say that they are already met. Every software developer can reduce their working hours to a minimum and have ample time to pursue whatever they want.
People are already empowered but they lack motivation. Compared to the global south, the north has plenty of resources. But most citizens don't invest them. Instead they spend them on vacations, clothing, cars and houses because they want to match their peers.
With that perspective, what could incentivize people whose basic needs are met, to spend their time on innovations?
Reducing your hours is a risky proposal. Even asking your boss about it can be a big risk. Becoming a contractor is a big risk too. The reality is that, for most people, their boss owns most of their lives, and trying to go off on their own is very risky. Plus you risk messing up your resume and having to explain yourself which is yet another thing working against you.
So yes, being employed might put food on your table and a roof over your head. If your a software developer it'll even let you buy gadgets and take vacations. However, the current system prevents people from reaching farther up Maslow's Hierarchy of Needs, because taking that next step to pursue your own interests in very risky and expensive.
So to answer your question, I don't think you need incentives. You need to enable people to pursue their intrinsic motivations.
But that's kind of the point. In a world where there is no majority to give people the space for their intrinsic motivation, who is going to pursue innovative ideas? People could make it socially acceptable to take time off or to work less, but they don't. If you have to nudge them to make that change, you are back at square one: 'How do you give the people with new ideas the power to implement them?'
If it is work itself that inhibits people from pursuing their intrinsic motivation, how could you make it economically viable to give everybody the space for their intrinsic motivations? If it is not viable, doesn't that leave us with incentives?
There isn't a fixed amount of stuff, nor a fixed amount of money. Otherwise turnover, ie GDP, would never rise.
Don't get your stocks and flows mixed up.
This is one reason the energy Windfall taxes being proposed everywhere seem ludicrous to me. If you tax energy producers at a high marginal rate, they will actually be disincentivized from producing a lot of energy. This is basic economics/human nature.