You can't rely on such paper figures to determine real tax burden in the past.
It makes sense to compare tax burdens of well-paid employees, a favorite cash cow of most governments. These are the people who sometimes start new businesses, and use their savings to do so.
And there is a meaningful difference to the volume of their savings if their top tax bracket is 30 per cent or 55 per cent.
BTW, rich don't actually pay much taxes. The luxury life they live is usually not taxed, most of the things they do is considered business expense.
When a worker flies to Ibiza they first pay social security and income taxes, then they pay consumption taxes like VAT.
When a businessman flies to Ibiza they deduct whatever they can as an expense so they don't pay income tax and VAT. For whatever they can't claim that it is a business expense they will pay with a cheap loan against their assets and avoid paying income taxes. Since they still have those assents, they pay just the interest later when the assents increase in value. If their business fails those assets fail, the bank takes the assets and no taxation happens.
Once you're at more than 1 million per year there are other challenges and you can probably afford to hire someone to take part of that burden off your shoulders, but until you get to that point you're on your own and it's very damn stressful (and by stressful I mean that that includes the possible inflated but all to real fear of getting to prison because of that tax-thingie that you didn't fill the 100% correct way or because some work your company did broke some municipal regulations or whatever and now you're on the hook for damages and, yes, personal liability).
Actually your VAT-skimming thing at the end is a very good example of that mentality, i.e. the innovators here having to have the Tax man front and center in their minds, before innovation and trying to build something useful off the ground, because if you don't know how to play the Tax man (at the limit of legality, as your example is) then you're toast. That "playing the Tax-man" thing consumes a lot of people's energy in the early stages, energy that would have been way better spent trying to actually make something new and innovative.
[the 50k and 1 million figures are just used as examples, maybe it's not 50k but 70k or 80k and maybe it's not 1 million but 5 to 10 million, but the idea stays the same]
For example a company like Uber could have never taken off here in Europe because the tax authorities (and not only) would have never let that happened, i.e. Uber (the company) playing the "they're not real employees" game with the authorities. Yes, Uber eventually made it into Europe, but only because by that time it already was a big and established company in the States so it had lots of money to spend on lobby activities.
My take would be that once people have 100k€ in net annual income per person, they just do other things and work less because it brings them more happiness than the additional money would.
https://taxpolicy.org.uk/2024/03/10/infographic_marginal_rat...
No one's making that choice. Most businesses fail, even in somewhere entrepreneur-friendly like America. Why not just work for someone else, given the rewards are capped even at relatively low level of success? Why take the risk, when taxation has failed to price risk into reward?
Nobody is talking about the difference between 1 and 2 billion, they are talking about the difference between 50 and 100 thousand, while competing.
It's not so much any single regulation, as it is there's so many little ones that seem reasonable on the face of it. But it's also that what makes the ruling Canadian class so is the authority to bypass those regulations.
I can give one personal example; I was able to secure some public funding application for a non profit I'm affiliated with. But the only reason I was able to do that was because my parents were university classmates of the elected official that was able to pressure the staff that was handling the paperwork to prioritize and approve our application ahead of probably the hundreds in front of us. The official's going to get a nice thank you dinner out of it, but I also had to offer some information that the official could financially benefit from for him to even consider it, and a promise of some future favors.
For better or worst that's how a lot of Canadian system works. Grant applications, personal tax work, personal and business banking, etc. Anyone can get through it eventually for anything. But if you want it done quickly and in a way probably won't get tied up in the system itself, you better know someone that owes you a favor.
As it turns out, he also complained about excessive documentation he needs to get public funds for his project.
So both of you are actually complaining about accessing public funds and not actually doing private investment or starting a private company with private funds.
this is not what most of the Americans do and this is not what they mean by startups or business. Mostly.
If someone's businesses is already working, then why would they go and get investment money?
It seems like the investors don't realize that if someone does have that much net profit, they actually don't have that much leverage over them to get good equity deals. So they are essentially just paying high and selling low later.
Life changing money is going from $50k/year to $1m/year. Not from $1b to $2b.
The vast majority of tax burden and complexity hits the middle class.
> When Apple was founded, the tax rates were %70.
It was 35% on capital gains.
And no, millionaire or billionaire doesn't matter much. Europe lacks Billionaires not Millionaires. Europe is full of small businesses and by small I mean millions in profits and revenues.
In Europe %99 of the companies are small or medium sized enterprises, which is not different than the USA. In USA however, large companies have slightly higher number of employees which is an indicative of concentration of power and that's how you get your "USA has 5 unicorns in top 10 but EU has only 1" lists.
Contrary to the narrative, Europe has much more small and medium sized enterprises per capita: https://www.nationmaster.com/country-info/stats/Economy/Micr...
It lacks both.
The US has 8.5% millionaires. Germany has 4.1. France has 5.6. Norway has 5.9. The UK has 5.8. Once you include the rest of the EU it goes even lower.
https://en.wikipedia.org/wiki/List_of_countries_by_number_of...
edit: And in the US there's no need to start a business to be a millionaire. You can become one by just working a regular job. Sales, consulting, tech, finance, etc. jobs can even pay you $1m per year.
You made it a point, not me. If you're going to try changing the goal post when proven wrong then there's no point in talking further.
That assumption appears to hold in general (Luxembourg and Switzerland have higher GDP and significantly higher millionaire percentages than the US), but there are a LOT of exceptions, like Ireland/Norway (way less millionaires than you would expect from GDP).
This is very interesting, I would not have expected to see such significant differences between countries...
Why would you skip having 1 billion Euros just because you could have had 2 Billion but the government took the rest? Up until 1960's rich Americans payed %91 tax, and yet they kept their entrepreneurial spirit - why you can't do the same at the stated %50?
When Apple was founded, the tax rates were %70.