| ▲ | psychoslave 6 days ago |
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| ▲ | tomhow 6 days ago | parent | next [-] |
| This comment breaches the guidelines and is not conducive to the kind of discussion we're trying to cultivate on HN. It's an important and difficult topic, and thus care needs to be taken to avoid getting activated, then commenting in ways that activate charged reactions in those who see things differently, as this is what takes threads into flamewar hell. Please take a moment to read the guidelines and make an effort to observe them in future, particularly these ones: Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive. Please don't fulminate. Please don't sneer, including at the rest of the community. Eschew flamebait. Avoid generic tangents. Omit internet tropes. Please don't use Hacker News for political or ideological battle. It tramples curiosity. https://news.ycombinator.com/newsguidelines.html |
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| ▲ | olieidel 6 days ago | parent | prev | next [-] |
| While rather sarcastic, your comment does hit an interesting point: How much does the infrastructure and society of any given state contribute to the "building" of a company? I'd argue that, for software companies, not very much; at least if you contrast it with a hardware company. If you're, say, forging steel, you're using roads, trains, a lot of electricity, you've got an industrial plant, worker unions, public accident insurance, etc., etc. - a significant chunk of state-associated infrastructure is a part of your business, and was a part of your business when you built it. But for software companies? I mean, you need a stable internet connection, good mobile phone coverage (tricky in Germany sometimes), rule of law, efficient bureaucracy (e.g. when hiring people), good banks which don't lose your money, electricity, etc. - none of these "infrastructure factors" feel as big as the ones for a hardware business. On the contrary, for a software business, one could argue that Germany is actively hostile to you: Founding a company takes weeks / months and is expensive (notary), most processes are still paper-based, hiring people (especially internationally) is a huge pain, mobile internet is spotty, residential internet has outages. Charging customer credit cards via Stripe exposes you to a rabbit hole of VAT bureaucracy - all companies I've met so far rolled their own, broken software stack to somehow match up their Stripe + VAT charges with their internal bookkeeping software (e.g. Datev). A huge mess. It doesn't end there. But I may be wrong. |
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| ▲ | mensetmanusman 6 days ago | parent | next [-] | | You need peace, law enforcement, trust in others to lower stress and increase creativity, good teachers and education. Someone growing up in a society is strongly an outcome of that society. | | |
| ▲ | caseysoftware 6 days ago | parent | next [-] | | > You need peace, law enforcement, trust in others to lower stress and increase creativity, good teachers and education. This is a great point. The flip side is that if a government fails to deliver those, they have failed their side of the social contract. Then ideally, the citizens they've failed should be able to opt out.. | |
| ▲ | olieidel 6 days ago | parent | prev [-] | | What about a software company founded in Germany by someone who grew up in another country, and accordingly got their education elsewhere? What if that company is a remote company which hires people all over the world, and none of those people benefited from the {education|peace|law enforcement|trust} in Germany? I do agree with you, in principle, that a company is somewhat coupled to the country it was founded in. The exact nature of that coupling, however, is not that simple, I would say. Reality is complicated, I suppose :) | | |
| ▲ | EndsOfnversion 6 days ago | parent [-] | | Lets drop you into the mid Cretaceous period and see how far your education takes you. Without the contributions of millions of others on a daily basis you’d have nothing. | | |
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| ▲ | cherryteastain 6 days ago | parent | prev | next [-] | | > I'd argue that, for software companies, not very much If you build any successful business, including a software business, in a lawless and corrupt country you will have local mafias try to extort you for money the moment they hear about it. In especially corrupt countries, corrupt cops/prosecutors etc will be in on it so there will be nothing to protect you. Blackouts will be common due to a poor power grid. Likewise, internet access will be unreliable, slow and expensive due to poor infrastructure. A country like Germany is absolute godsend compared to, say, Nigeria or Cambodia. | | |
| ▲ | abtinf 6 days ago | parent [-] | | > If you build any successful business … you will have local mafias try to extort you for money the moment they hear about it. Precisely how is this different from mixed economies, like the US or Germany? |
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| ▲ | jacob_a_dev 6 days ago | parent | prev | next [-] | | 1. Attract software companies While minimal infrastructure investments would need to be made to entice software companies, their is a political price to pay by allowing young business people into your country who likely will out-earn the average resident (many historical examples of this). This makes the majority of people unhappy, but brings in educated-non-criminal customers and tax dollars. Lets say Germany does (1) great, they attract 1000 smart europeans to found companies, and 10 years later 1 of those companies becomes a megacorp. 2. Keep software companies happy 10 years has passed, new politicians are in charge. Pursuing #1 is a separate strategy to #2. I would hope i live in a country that wants to (1) attract young talent and (2) keep talent happy, but of course thats not necessarily true. The new politicians in charge need to appease the majority of people again as its election season! I think Germany / USA can't really have an honest conversation about this as Germany + USA already have highly progressive tax systems. A significant % of USA and Germany residents don't pay any reasonable amount of tax, and are drains on the tax system. I assume these %s are likely projected to grow in the future rather than decline. If the price of bread happens to rise? Then our politicians and voters will support squeezing more tax out of productive sects of society for the short term gains. Then those productive and mobile members of society will slowly move elsewhere. | |
| ▲ | carstenhag 6 days ago | parent | prev | next [-] | | "If you comply here, you will be compliant in almost all EU countries or even around the world" situation, many qualified students, international talent pool due to attractive cities, quality of life, startup grants/funding, hotspot for B2B fairs... | |
| ▲ | 6 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | neves 6 days ago | parent | prev [-] | | It looks like education is cheap. |
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| ▲ | bigstrat2003 6 days ago | parent | prev | next [-] |
| Presumably you paid for that infrastructure in the form of taxes while you did business in the country. Why, then, should the state have additional claims on the money you made? Were the taxes they collected already not enough? |
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| ▲ | nbadg 6 days ago | parent | next [-] | | That's not what the exit tax is, though. The German exit tax is effectively just a way to give the existing capital gains tax a way to tax unrealized gains when you leave the country, to prevent you from dodging taxes on capital gains by simply leaving the country. In other words, it's not an additional claim. It's simply an enforcement mechanism for the money you already hypothetically owe. | | |
| ▲ | olieidel 6 days ago | parent | next [-] | | Yes, that's true, but the implementation is.. not very elegant. In theory, the exit tax should ensure that Germany gets the taxes of the sale of your company. So, if you ever sold your company once you're no longer in Germany, Germany wouldn't get those taxes, so it charges you immediately once you leave Germany in a sort-of "virtual" sale. This, of course, sucks tremendously because you actually haven't sold your company, and "normal" people don't have this sort of cash on hand. Other countries have "smarter" exit tax implementations and only charge you when you actually sell your company in the future. I think that's pretty fair. It also doesn't hinder people from leaving the country. | | |
| ▲ | mitthrowaway2 6 days ago | parent | next [-] | | Another reasonable implementation would be for the government to accept payment in the form of shares of your company. Personally I think this is how all taxation of illiquid assets should be done, but I suppose it could get complicated. | |
| ▲ | nbadg 6 days ago | parent | prev [-] | | As an immigrant to Germany, I've often made the observation that Germany frequently has a really severe implementation problem. So I'm generally very sympathetic to that idea. That being said, I'm not entirely sure that's the case here, and this is often also brought up in the context of strengthening the inheritance tax in Germany. In both the inheritance tax and the exit tax, the inherent applicability conditions are such that the end result is that there simply aren't that many people in a situation where it actually has a measurable impact. For the exit tax, you'd need to find people who 1. want to leave Germany, 2. already started a company here, 3. that company grew large enough that the Wegzugssteuer would really be a burden, and 4. that don't have enough liquidity, or cannot raise enough liquidity by selling some of their ownership, to cover the tax. That ends up being a really small number of people, which always eases questions about the reasonability (Angemessenheit) of the law. And in the context of inheritance tax, there's the added point that there's a floor to its application. As another commenter mentioned, even for those situations where the exit tax actually is burdensome, just as with inheritance tax, there are two really simple solutions: first, create a floor for the minimum valuation by which the exit tax is actually assessed, and second, allow you to "sell" shares to the German government as a means of paying the tax, turning the Finanzamt into a silent shareholder in the company. I think both of these would be substantial improvements to both the German exit tax and inheritance tax. |
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| ▲ | pfannkuchen 6 days ago | parent | prev [-] | | Don’t you have to pay capital gains on sale to USA government even if you leave? I thought it was based on where the shares were assigned. |
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| ▲ | elpocko 6 days ago | parent | prev [-] | | In Germany only 40+% of your income goes to taxes and social security. Plus another meager ~20% on most things you buy. Plus a small tax on many things that are supposedly bad for you, like ~70% on cigarettes. Death is taxed at a discount, only 15-40% depending on how rich you were. "Free" healthcare though. It's a bargain! | | |
| ▲ | WalterBright 6 days ago | parent [-] | | "Free" healthcare always turns out to be the most expensive healthcare. | | |
| ▲ | stouset 6 days ago | parent | next [-] | | This take is wildly out of sync with the reality that the U.S., as one of the few developed nations without free healthcare, pays more for their healthcare than all of them while having worse than average outcomes. The worst healthcare is in reality American healthcare. We pay through the nose for the privilege of getting terrible results. | | |
| ▲ | _zoltan_ 6 days ago | parent [-] | | Switzerland has almost the same system as the US, and it works - when my wife needed an MRI, she got referred at around 11am by a specialist, for a call around 1pm to see if she's available that afternoon. She wasn't so they agreed on the next day. Is it expensive? Yes. Does it work? Absolutely. | | |
| ▲ | WalterBright 6 days ago | parent [-] | | I received a CAT scan a couple years ago, about 4 hours after I wandered into urgent care. Before they stuffed me through the toroid, I asked the operator to set the dials to 1988 so I could advise my former self to buy MSFT with everything I had. The bill was quite a whopper, though Obamacare paid most of it. Of course, my Obamacare premiums are about 4x what they were before Obamacare. |
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| ▲ | vjvjvjvjghv 6 days ago | parent | prev [-] | | I call BS on this statement. And German healthcare isn’t even free. | | |
| ▲ | WalterBright 6 days ago | parent [-] | | Of course. And historically, US health care costs rose at about the rate of inflation until the late 1960s, where the curve tilted strongly upwards at a much higher rate, and continues today. What happened in the late 1960s? The advent of "free" healthcare! | | |
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| ▲ | msukkarieh 6 days ago | parent | prev | next [-] |
| I think most people would be okay with an exit tax if it's reasonable. Requiring the owner of a business generating €20k in profit to then pay €70k in taxes is not reasonable. Canada also has an unreasonable exit tax. Canadian founders are taxed on 50% of the FMV of their shares on departure. So if you own half of a company that is worth $50m, your taxable income for the year of departure is increased by $12.5m. |
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| ▲ | olieidel 6 days ago | parent [-] | | Agreed. As mentioned in another comment, I think it'd be fair to levy the exit tax when you actually sell your company in the future. Like, if I ever sell my business, I'd be happy to pay my fair share of German taxes on said business, even if I'd no longer be a tax resident of Germany. The current implementation which essentially simulates a "virtual" sale of your business once you leave the country is pretty terrible, as most normal humans don't have that sort of cash on hand because, well, they actually didn't sell their business at that point in time. Interesting pointer on Canada - thanks! |
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| ▲ | typewithrhythm 6 days ago | parent | prev | next [-] |
| The idea that a company is "siphoning out" value is fundamentally flawed. The company is creating value, and society enables it.
This enablement is ongoing, and should be paid for with ongoing tax.
If the actual value creator decides that they can get a better deal somewhere else, then barriers to exit come in because the government is trying to get more out of a company than it provided. (Since if there are superior places to operate, the worth of what the state you are leaving provides must be overvalued, otherwise you wouldn't leave). |
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| ▲ | tticvs 6 days ago | parent | prev | next [-] |
| You'd have a point if Germany did anything to actually support businesses scaling instead of trying to kneecap them at every turn |
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| ▲ | ghufran_syed 6 days ago | parent | prev | next [-] |
| Perhaps you would apply the same logic to a family car, or the clothing you bought? Should they tax the value of your medical degree when you leave the country? |
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| ▲ | neves 6 days ago | parent | next [-] | | Yes. Remember that in Germany you don't pay for University degrees. High education isn't just for a wealthy minority. | | |
| ▲ | pigeonhole123 6 days ago | parent [-] | | That doesn't make the degree worthless, surely | | |
| ▲ | neves 6 days ago | parent [-] | | Sure. I just want to say that your educated workforce is part of the infrastructure provided by the "evil" government. |
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| ▲ | toast0 6 days ago | parent | prev [-] | | I would assume that logic is applied. Exit taxes are generally applied as if the taxpayer sold all capital assets on the day of leaving. At least in the US taxation regime (I'm unfamiliar with others), family cars don't qualify for a capital loss, and rarely appreciate. Clothing would be similar. But it doesn't seem unreasonable that a country should want to be paid tax on unrealized gains as you're leaving. It would probably be more fair to wait until the gains were realized and then apportion the gains among the countries of residence, but if you're leaving, it's going to be hard to compel your participation later, so it makes more sense to do it as you're leaving. |
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| ▲ | wmf 6 days ago | parent | prev | next [-] |
| In many cases people want to move precisely because Germany doesn't provide as good infrastructure for startups as other countries. Also, the "you can't leave because you owe society" argument, while not necessarily wrong, is strongly associated with the abuses of Communism. |
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| ▲ | wagwang 6 days ago | parent | prev | next [-] |
| Yes globalism is bad :) outside of certain forms of trade. Next up, remittances. |
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| ▲ | dzhiurgis 6 days ago | parent | prev | next [-] |
| > State that let you build Excuse me, why I need state permission for building business? |
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| ▲ | toofy 6 days ago | parent | prev | next [-] |
| yep, there’s a reason these people start their businesses in stable economied countries, yet certain groups of them do everything to pretend they owe nothing back. i’d love to see a comprehensive study on how much corporate tax avoidance costs a country vs food stamps so we can get an accurate view on who leeches/gains more. my suspicion is corporate wage theft/tax avoidance/evasion/subsidies are significantly higher, particularly if we add in executives and major stock holders. |
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| ▲ | bravesoul2 6 days ago | parent | prev | next [-] |
| In the article it shows that very rich owners can evade the tax (probably they've already planned and left!), while middle class people the tax wipes out their business and probably send them bankrupt. It's more like handcuffs than socialism. I am sure they could achieve the same goals of fair tax but learn some game theory before doing so. |
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| ▲ | dash2 6 days ago | parent | prev | next [-] |
| Man soll den Flüchtlingen aus Deutschland keine Träne nachweinen, eh? |
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| ▲ | hasnd 6 days ago | parent | prev | next [-] |
| You talk as if society and the infrastructure society paid for somehow belonged to the state. |
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| ▲ | grassen 6 days ago | parent | prev [-] |
| [flagged] |
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| ▲ | tomhow 6 days ago | parent [-] | | This comment is in breach of several guidelines. I understand these are important topics and it's fine to raise these points, but HN can only be a good place for discussing difficult topics like these if people make the effort to avoid inflammatory rhetoric. Please take a moment to read the guidelines and make an effort to observe them in future, particularly these ones: Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive. When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3." Please don't fulminate. Please don't sneer, including at the rest of the community. Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith. Eschew flamebait. Avoid generic tangents. Omit internet tropes. Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something. Please don't use Hacker News for political or ideological battle. It tramples curiosity. https://news.ycombinator.com/newsguidelines.html |
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