Bezos would not have kept Amazon in the US if it adopted Nordic welfare levels of taxation.

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.

I looked up taxation in Norway, it looks very similar to ours. Personal marginal tax rates cap at 48% and corporate taxes are 23%. What am I missing?

https://en.m.wikipedia.org/wiki/Taxation_in_Norway

It has nothing to do with taxation - or else the Arab Gulf or Cayman Islands would be entrepreneurial hubs, not California or the Toronto area. It’s all about the price of quality labour. It’s about access to long-term risk capital (aka venture funds) + high quality labour at affordable prices. As in, entrepreneurs having cash to fund projects and being able to actually hire people that will help build them. Try hiring a hundred software engineers in Norway: your hourly cost would probably blow up. The low-tax destinations are the place billionaires go to park their wealth, not create it (for example, outside of Tech Nordic billionaires move to Switzerland after they get rich)

> Try hiring a hundred software engineers in Norway: your hourly cost would probably blow up.

Depends what you’re comparing to. Total comp for great engineers in Oslo is lower than for their peers in Silicon Valley.

Total cost to the company may not be. Employees are costlier to the companies in Europe.

Also you get really great engineers in norway, something about the lack of light, cold, snowy eternal night, produces excellent devs. Lots of fantastic open source projects exist due to the vikings no longer using boats..

>" Try hiring a hundred software engineers in Norway"

They're not particularly cheap in the US either. Toronto might be better but hi-tech salaries are going up as well.

You can get 100s of SWE in Poland (or Ukraine pre-war) way cheaper than US, yet extreme cases of tech startups like FAANGs will never happen because market is too small.

You’re missing the wealth tax. 1.1% of global wealth, including unrealized gains of startup share positions.

https://www.skatteetaten.no/en/rates/wealth-tax/

I know a lot of founders whose companies are allegedly worth a lot on paper, but cash on hand is very limited.

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...

This year, quite many have actually chosen to move from Norway to Switzerland, probably due to taxes

Not a problem for a startup surely, they have debts not wealth.

You need to look at the entire spectrum of direct, indirect and near-taxes. A couple of examples: VAT of 15-25% on almost everything. With social security contributions a maximum marginal tax rate on labour of more than 50%. Norway is actually pretty efficient and by far the best of the region compared with other countries but also massively subsidized with north sea oil money.

The US is prized because of its large market… not because it’s a tax dodge. The US dan cut off access to any company unwilling to pay local taxes just like how China forces any foreign company wanting to tap into its large market to give majority control to a local entity.

The EU is a large market too but startup founders aren't going there.

EU has a market on legislative base, however in language, culture, ... it is split. It is very hard to build a company serving larger parts of Europe.

Many American companies have done it. Instagram is very popular across the EU.

They started with an American focus, holding doors open for others and once things were running expanded more actively. Also they were acquired after 1.5 years when not even having a Android app, which is more spread in Europe than US compared to iphone

The US is absolutely a tax dodge because of low capital gains taxes and low corporate tax rates.

Marginal personal income tax rates, which is what others keep comparing here, are only relevant for wage earners.

It's all relative isn't it? Singapore is a tax dodge, but I would't characterize low corporate income taxes as a tax dodge. How does one get money out of a corporation if not via marginal personal income tax rates?

Long term capital gains.

Can you elaborate?

...and lots of other factors, like access to risk capital.

Can confirm. Lived a very frugal early retirement lifestyle in Austria because it was practically impossible to build wealth (high taxes, comparatively very low tech salaries, little entrepreneurial support/incentives).

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>

> (work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!)

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".

> 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"

And this is why I say that I understand the economics behind it.

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 practical level you probably did work/study harder, do something more special, had more resources, been luckier than the vast majority of the population; that's why you're in the position you occupy.

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.

>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.

I don't think any other (widely popular) work occupies so much of a one's mind as software engineering.

The average Joe in American can earn many times more than an engineer in the EU

The average Joe in the US earns $60-70k, same as an average software engineer in the EU.

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.

> I really cannot grasp the individualism about "I know how to write code, I deserve a better life than 95% of the population".

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.

That's... illuminating. Really. It's a sad take, but could completely be true.

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?".

But I don't think it's sad. The desire to have more for ourselves and our children (why else would they be talking about buying a family home?) is a large part of the reason why living standards keep rising.

If everyone desires to be above average and strives to produce more, earn more, then over time the average will rise. This is good.

Because we are the gateway to exponential free work. Program once, run on x machines, supply all 8 billions with a service, for defacto nothing. From these hands flows cornucopia..

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.

Not OP but I think if you're gonna earn an average salary then tech is a pretty bad choice due to the constant shifting base of knowledge, lack of security (dot com type bubbles) and ageism prevalent in the industry. Being something like a government worker or teacher makes much more sense then. And unsurprisingly, in Europe a huge part of GDP is created by the government. Software developer roles in Europe are dominated by immigrants for much of the same reason - locals don't see these jobs as such a lucrative career path.

> Why so many engineers feel entitled to have more than the average working Joe ?

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"

I agree with your point about Europe squandering engineering talent.

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.)

All the problems you listed as US-specific problems exist in my corner of Europe too, except gun violence. And on top of that we have fewer jobs, lower salaries, higher taxes and high unemployment.

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.

> American tend to compare the worst of their country with the best

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.

>You'd have to be an idiot to want to work hard given how raw of a deal you are getting

Yeah sorry I can't fly to another country because I'm not satisfied with -only- a family home.

Not all of Europe runs on a 50% tax rate though. My tax rate as company director in the United Kingdom is somewhere around 25%, and I can afford higher salaries than the rest of Europe while still enjoying the basic safety net of public health care.

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.

I'll be lucky if I can afford a single family home after 20 years of software engineering in the US. halfway there now, we'll see. Moving to a senior position has helped but I feel like a lot of people forget that the compensation in SV is not normal in other places.

SV is an outlier in both income and housing costs.

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.

>work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!

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.

I feel like this is somewhat misguided

> 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.

"Consumer tech" like social media. And the reason is 30+ different smaller markets, because this business makes little sense if you can't capture 100s of millions of users.

Your taxes shouldn’t be based on where your HQ is but rather where your customers are.

Please go file your taxes in 37 different countries with different regulations where your customers are.

You will bankrupt from your accountants’ bills.

Amazon doesn't make profits and thus doesn't pay taxes. Bezos doesn't sell much and thus doesn't pay taxes either. Changing rates wouldn't change anything. Tax rates only affect the middle class, and as @jliptzin has pointed out, those tax rates are quite similar.

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.