| ▲ | bigstrat2003 6 days ago |
| 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. |
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| ▲ | 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! |
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| ▲ | 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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