Being born and working in a country with a strong social system, this is just another positive for my current lifestyle:
Just earning enough to sustain myself and paying only minimal taxes so as not to waste anything on benefits I will never get back!
I have to agree. I see this attitude in ever increasing numbers of German developers as our High-Tax System even openly admits to all the benefits you won't receive.
The amount of taxes one has to pay compared to the security one is offered feels strongly out of whack for the 60-200k/yearly family salary bracket.
There is braindrain, but also Stockholm Syndrome. I oftentimes see discussions between developers where ones that have left Germany's system get attacked behind their back for being so "irresponsible" and missing out on security systems here, while enjoying, after about two to three years of saving money elsewhere a lifestyle of financial security that is leagues above everything the german social security can offer. There are lots of reasons to stay in Germany, but social security and finances aren't ones if you are a talented developer that is just looking for a good life.
It's a strange tension currently, I'm unsure where this will lead in the long run.
Can you please explain a little more? I always thought Germany (and Scandinavia) to be a strong economy where although you pay a lot of taxes, the returns are extremely well in terms of childcare, hospitalization, etc.
I assume they compare it to upper-tier high-tech hubs like Silicon Valley, Boston & Seattle - where a software developer can earn well into 6 figures (and double or more of what they'd earn in Germany).
But I suspect this is mostly limited to those and very few other cases (e.g. top tier doctors).
Yes, but for how long? And what happens after you're put to pasture?
You can earn a lot more in the US when you're young (or at least, mid-career), but you'd better hope and pray that you never get sick, or laid off in late-middle age.
I've never lived in Germany, so I don't know the problems with their system, but the US system is (currently) a "get yours while the getting is good" approach to life.
Well, if you're German that means you move to Silicon Valley, make the big bucks for a few decades, then move back to Germany when your health starts to fail.
That strikes me as trying to claim the benefits of a system without participating in the costs.
(Unless you're suggesting that salaries are so disproportionately high in the USA that you can move here, pay all of your German taxes, and still be better off. In which case, I have to ask: what the hell is wrong with economics, and why is it leading to this obvious inefficiency?
I suspect the real answer is: "you can't actually do that.")
Germany's tax system is linked to residence, not citizenship (unlike the US). Therefore if you move to the US and work there for a few years, you will not pay any German taxes during that period.
Therefore the "free rider" effect definitely exists, but I don't think it is a huge problem, because the numbers of people migrating out and in again are not that high.
If you do it quite as cynically as that, yeah, that's sounds a bit dodgy - but the more common pattern, I think, and frankly more problematic for Germany, is the one where you go to Silicon Valley for a few years and try your luck, and if you're good (and lucky), make the big bucks and stay -- for all the badness of US health care, people who've made big bucks for decades are generally by a wide margin able to secure and keep really good health care. The people who aren't as lucky (and/or good) return and take up their €45k/yr careers.
I doubt that's a serious problem, given the odds against it happening.
Seems far more likely that someone would leave Germany, earn a higher salary in the US for a while, and return as soon as a serious health threat made the disadvantages of the US system clear.
Presumably Germany has some sort of system to tax imported wealth to handle these scenarios.
No, you can totally do that if you put up with the severe inconvenience of being an economic migrant for that time.
(Immigration bureaucracy, distance from family, working and living in your second language, navigating an unfamiliar system, immigration bureaucracy, and the risk of being arbitrarily deported)
I didn't say you couldn't do it, I said it was unlikely you'd get rich in the US (true), and there's probably a system to tax you on imported wealth (as there is in the US).
While you do not have to pay the benefits for social security while abroad, you could and it's not even that much. One pays around EUR 12k / year for social security on a rather well payed software developer job (EUR 50k / year). Given a salary difference of a factor two or more, it is actually very much feasible to life and work in a US technology hub and pay for German social security. So the question "what the hell is wrong with economics" does remain.
I think the answer to that conundrum is just that it takes a lot more time for things to even out than you'd think. It hasn't even been 30 years since the Soviet Union collapsed.
It is exploiting the system without paying for it, but there's plenty of that going in the other direction as well - educated eastern/southern europeans in their 20s coming to Germany to work with their childhood and education already paid off, pay Germany taxes for a few years/decades and then go back to their home countries.
Germany in particular gets a lot more economic immigrants than emigrants so it probably adds up as positive or neutral.
I am expecting that the good times in the US will continue for 10 more years at which point I will have enough saved up to retire[0].
[0] Assume that I make 150k a year and only live on 50k a year I can put the rest into index funds. In ~10 years my money will be producing enough money so that I can quit and live on 50k a year forever. See http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... for the math/justification.
That's certainly one perspective. But some people see it as less of a "get yours"/"hope"/"pray" game, and then the US system can be cast in a different light.
1. Salaries are much lower than, let's say US or Switzerland.
2. Taxes are much higher then, let's say US or Switzerland.
3. Real Estate prices are totally out of whack.
So if you make 60k (a very good salary for an engineer even in a big city) and want to raise a family of four you are basically on the same level as a non-working immigrant family of four. But yes, you have access to schools, universities and health care.
The trend that people are leaving or looking for exit options is definitely significant accelerating.
What's the alternative? Restricting basic needs like education and healthcare to well earning citizens?
As a german, of course I don't enjoy paying high taxes, but that changes quickly once you actually get sick. Your health and education should be taken care of regardless of whether you're a janitor or an engineer - or their child, which can't change that status yet.
1. Invest money into infrastructure which is crumbling
2. Invest in military. If you invest 1.2% of GDP in your military, as Germany does, you don't have a military, you have a museum. Actually, an argument that Trump got right in regards to Germany. (Hey, let the Americans pay)
3. European border defense. Germany has taken millions of illegal immigrants (illegals since none of them would have the right to be an immigrant based on Dublin III regulations). Most of them can't even read. They immigrate into the welfare state. I don't judge this, I would to the same in their position. Immigration should be strictly handled like in Canada or Australia.
Infrastructure spending is not the best way of propping up the economy. You get more for your buck by giving the money to the people who will immediately spend it. Germany doesn't need to increase the military. It's not running an empire like US. And doesn't need to find that kind of employment for the uneducated lower class. And Germany is what it is because of migrants. Do believe. And Japan is fucked because it's not accepting any.
"Infrastructure spending is not the best way of propping up the economy."
We were not talking about "propping up the economy", we were talking about sustaining it.
"You get more for your buck by giving the money to the people who will immediately spend it."
This is true. But by "importing all of India we don't make Calcutta rich, we make Germany a Calcutta" as somebody said.
"Germany doesn't need to increase the military."
Indeed it does not. Germany is in violation of her NATO contractual obligations. As long as she can "outsource" her defense and make the US defend her, maybe. In fact, Germany has no military anymore, Germany has a military museum.
"It's not running an empire like US."
She is unable to defend herself. Even Switzerland would be a formidable opponent in the current state. How many working tanks are left? 200 Tanks? How many helicopter pilots? http://www.n-tv.de/politik/Bundeswehr-fehlen-Hubschrauber-Pi...
There is nothing anymore. And if you are German you will likely be able to understand the Latin saying: "Si vis pacem, para bellum"
"And doesn't need to find that kind of employment for the uneducated lower class."
What other options do you see for the millions of uneducated, low IQ (please refer to Wikipedia) immigrants do you have in mind? Most of them (75%) are supposed to be illiterate. Just social welfare and mosques?
"And Germany is what it is because of migrants."
Because of immigrants with a cultural similar background. Not because of a massive invasion of uneducated people from violent and tribal societies with a very different religion (I am agnostic). Why did the population of Christians in Turkey fall from 23% to below 1% in the last 100 years? Some things don't match and mix well.
"Do believe. And Japan is fucked because it's not accepting any."
Japan is a highly educated, highly industrialized, non violent, non tribal, quite egalitarian society with a tolerant religion. Yes, they are over-aging. But all industrialized countries are over-aging. So far it seems to me that the Japanese are doing the best for a soft landing. By the way, they are extremely restrictive to Muslim immigration.
http://allfourestates.com/why-japan-has-no-islamic-terrorism...
I don't know about other states - haven't looked at those numbers. But your statistics about Turkey are deliberately misleading by an extremely large margin, because you are in fact comparing the demographics of the Ottoman Empire to the demographics of the modern day Republic of Turkey.
Not German. Many can't read or write at all, they are illiterate. So thinking they will master German in any reasonable timeframe and become employable is risky bet. They will need extensive training.
I'd say restricting fully government paid healthcare to citizens is a good step. For non-citizens (full time residents etc) the government would give basic healthcare, but anything elective or above the baseline should be funded by that individual.
In general I would say that most of social safety net benefits should be applied to citizens, and then be scaled down for the other groups of people living there.
Why should I get less than full health care if I pay the same income taxes and health insurance (15% of my wage on it's own)?
If you restrict services to permanent residents than restrict the taxes we pay as well (btw I'm 100% certain I pay more in taxes than I consume in benefits, and Germany didn't even have to pay for my education or early life).
I'm not saying restrict services to non-citizens, I'm saying do not have the government pay for those services for non-citizens. If you pay a private company for health insurance then you should be covered by that insurance for the things that the government won't cover.
This is one easy way that the government could cut health related costs.
No, the Government of the place you are living is taking 15% of money out from your salary to pay for the services that it provides to both citizens and residents. It does not have to divide equally between the two groups.
Taxes aren't that much lower in the US - it's just that what Germany are spending on social programs, the US spends on estabilishing and maintaining world domination (via the military).
What is the bigger problem is that gross dev salaries are maybe half of what they are in the US.
Is military spending that large a percentage of US tax revenue? Tomahawk missiles and F15s aren't cheap, but I thought Medicare + Social Security chew up a majority of our tax dollars.
>Is military spending that large a percentage of US tax revenue?
Those $600+ billion have to come somewhere, don't they? And that doesn't even account for the unaccountable [0].
It doesn't look that bad in % of GDP because of the US's massive GDP, but in pure numbers, the US spends more money on it's military than the next 8 countries on the list combined.
Everyone recognizes that. They don't agree that the problem is the U.S. being war hungry as much as the other countries not being willing to chip in. Here's Obama on the subject:
"""
“Free riders aggravate me,” he told me. Recently, Obama warned that Great Britain would no longer be able to claim a “special relationship” with the United States if it did not commit to spending at least 2 percent of its GDP on defense. “You have to pay your fair share,” Obama told David Cameron, who subsequently met the 2 percent threshold.
Part of his mission as president, Obama explained, is to spur other countries to take action for themselves, rather than wait for the U.S. to lead. The defense of the liberal international order against jihadist terror, Russian adventurism, and Chinese bullying depends in part, he believes, on the willingness of other nations to share the burden with the U.S.
"""
That's a narrative that works in the US and only in the US.
What are countries supposed to "chip in" for? The deterrence of a future alien invasion like in Independence Day?
Why should the world chip in for US Ambitions that result in massive destruction, like destabilizing the Middle East, while dealing with most of the brunt of the blowback of such US foreign policy decisions, in the form of refugee waves?
Nobody asked you to be "the world police" no matter how much you keep telling yourself that, "the people there asked for US interventions", is a tale many US Americans keep telling themselves to keep the "We are the good guys" narrative intact, but it has little to nothing to do with reality.
Because reality knows no "good guys" or "bad guys", in reality such terms are purely subjective.
As much as I like the US as a country and it's people, there's a huge difference in perception in how US Americans see their country vs how the rest of the world perceives their country's actions.
Ugh, as a Pole in lived in Poland being a province of a Russian empire till 1989 and now am living in Poland which is realistically a province of US/EU empire. I much prefer the latter.
I actually grew up on both sides of the Iron Curtain, maybe that's why I struggle playing along with this Star Wars like narrative which insists it's "good guys vs bad guys".
No place is perfect and how "bad" a place ends up, always depending on how much an individual adapts to the given circumstances of said place. This holds true regardless of where you are, a democracy, a dictatorship or anything in-between.
Btw: If you want to talk about Crimea then we first need to start talking about Kiev [0]. Of course, that won't happen because then the whole "Russia as aggressor" narrative wouldn't fit as neatly.
There might not be "good guys vs bad guys" but there is certainly a "better vs worse" and it's quite plain to see which side of the Iron Curtain, even after its fall, fared better overall, culturally, intellectually, and economically.
That "better" is worth defending against the encroachment of the "worse".
how much would we all have to spend to reverse the re-annexation of crimea? clearly its not enough yet. or lets shoot for a resolution of the whole syria/iraq/israel/lebannon/etc thing. how much would that cost?
does that get paid to the US directly or do we all fund our own militaries that work...under US control? or based on our own ideas?
i'm just trying to figure out how this is supposed to work.
I don't think anyone is suggesting to chip in to reverse the annexation. The point is to have the military that could adequately protect against similar future encroachments.
EDIT: Keep in mind that this is just the budget of the national government. Each state has its own budget that barely goes to military spending at all, instead focusing on entitlements, especially healthcare costs.
Going down to (relative) German level of military spending would free up around $350b (per year). That could go a long way towards improving various social programs. The other issue is that health care in the US seems ridiculously expensive (with doctors making 20x minimum wage and various insurance companies profiteering from a broken system), so in the end this money would buy less health care than in Germany. The same is true with higher education - it's free in most of Europe, but the conditions aren't nearly as lavish as in the US (so again, the money wouldn't improve the situation as much as it could).
I think the two might be linked. Maintaining world domination via the military effects the demand for engineering talent. It's not always direct; consider what Silicon Valley today would be if there hadn't been a DARPA etc.
Don't overlook the inverse incentive created and psychological aspect of this equation. If you are the one working and at the same level as the non-working, there is a cognitive dissonance that cannot be easily overcome.
In Germany, tuition is nearly free or minimal, especially compared to US. With the strong social net, I feel people can do almost anything they want there, depending in some part on their social status and ambitions, but they will neither get extremely rich nor extremely poor. Like the food, German life is quite bland as well.
"I feel people can do almost anything they want there"
'We have always done it that way and we will keep doing it that way'. There is very little chance for change and opportunity. Also, very little venture capital.
I don't live in Germany but I can now afford to buy a house. The reason I can afford this is: BECAUSE I don't live in Germany. Yet, buying a house or an apartment in Germany is totally off the table. Why?
1. I disagree with the unlimited immigration into the welfare state that will make the welfare state collapse and totally changes our non-violent open society into a more violent and tribal one.
2. Real Estate or "Immobilien" or "inmuebles" how it is called in other languages. A much better word than real estate. It means "Non Mobile". And currently real estate taxes in Germany are basically zero compared with let's say New Jersey. This will change. The government will sooner of later have to tax the shit out of the real estate owners. And again, it is NON MOBILE, while you can leave, your house can't. In my opinion it would be madness to buy a house there.
> With the strong social net, I feel people can do almost anything they want there, depending in some part on their social status and ambitions, but they will neither get extremely rich nor extremely poor
I hear that in Denmark as well, but I feel it's often accompanied by a very strong unspoken assumption around what, out of 'anything', one should want to do. Denmark is a pretty sweet deal if you have a decent income, property mortgaged to the rafters (the only real tax break is for interest payments) and a couple of kids in institution/school age (and healthy private pension savings). If that lifestyle does not appeal to you, you are going to be paying through the nose for frankly very little.
This also informs the "ambition" bit. Having high ambitions is firmly in the "should not want" camp, so not a lot of people seem to have them, and the ones that do certainly keep them private if they want to considered polite company. Every year around graduation time, the newspapers have a raft of op eds on how "straight A students" are actually miserable and missing out on youth, while the mediocre students are celebrated for knowing how to live and have fun.
>Like the food, German life is quite bland as well.
American life is bland! I'm not sure we actually know a way to arrange society that allows for most people to have exciting lives instead of bland or miserable ones.
"you are basically on the same level as a non-working immigrant family of four"
That's an exaggeration. A non-working family (not sure what immigrant has to do with it) does not have access to the same quality of life than a working family with salaries of 60k. Sure, health and education-wise they both enjoy the same benefits, but for sure not in housing as you mention in your third point.
If he is accepted into wellfare (and the last number that I saw around 700000 had been accpeted) it is comparable. I posted it on HN and got downvoted. I will post it again:
60k is 2800 € net per month.
A refugee on welfare would get approximately 400 per adult plus 300 per kid plus rent paid (and free insurance). For a family of four this is 1400 Euro. Let's assume 1000 for rent in a city. This is 2400 so basically the same that you have.
If you post this again and again please get your facts straight first: 2800 € is the amount for a single person. A married sole-earner in a family of four gets generous tax benefits resulting in 3300 € net (insurance included) plus 380 € child benefits. Substantially more I'd say.
Agreed. But please also consider the extra benefits for welfare recipients. Extra clothing support. Generous checks to buy their first furniture, laundry machine, TV. Maybe even a computer (not sure about the computer).
Fact is, even as a full working engineer your available money is not significant different. A policeman with two kids and his wife not working has less money as such a family living on welfare. In fact, he would qualify for subsidiary income.
As a rule of thumb 2000 € can be used for four persons for initial furniture etc. After two months the 60k earner is ahead. Clothing is already included in the rates you posted (there is some additional clothing support if you get another, lower rate).
Police earnings are a bit complicated but basically everyone with kids gets more than welfare after initial training. Some young police officers from Berlin (rightfully) recently complained that they are below that but this is the exception.
Can confirm that sometimes I have the impression that my SO's cousin is living quite a nice life (housewife, three children, husband's blue-collar salary) compared to us (childless, combined 6 digit salary, can't afford a 3 bedroom house without signing a 30+ year mortgage).
That's the minimum amount you need to live with dignity in Germany as defined by the Federal Constitutional Court and thus applies to everyone although foreigner's are subject to certain restrictions. Many refugees get less than that.
60k€ results in ~2900€/month after taxes for a married person. A decent appartement in a big sout/west german city for 4 people will easily cost you 1250€ or more. Subtract further costs for transportation etc. and your living standard is indeed not mich higher than that of a undemployeed family with free housing and welfare benefits.
I live in a decent apartment in a big south/west German city, I have a 60k+ salary and yes, I pay a lot in taxes and for rent. There's NO way I have the same quality of life as an unemployed family, while they might get some money from the state it's nowhere close to a 60k salary.
Now, where I do see the problem is that most of the housing is owned by people renting it out (check out Germany in this list [1]). My whole building is owned by the same guy who I guess lives quite a relaxed life out of my rent, while producing nothing. If you want to fight the increase in living costs, I'd start there.
I have no problem with feeding and sheltering refugees.
> Now, where I do see the problem is that most of the housing is owned by people renting it out (check out Germany in this list [1]). My whole building is owned by the same guy who I guess lives quite a relaxed life out of my rent, while producing nothing. If you want to fight the increase in living costs, I'd start there.
Because it's tax smart. If you own real estate, all repair, maintenance costs etc. can be deducted from your taxable rental income. On the other hand, if you live in a property you own, all maintenance costs are paid from your after-tax personal income.
Besides crime and different values (women, gays, open society), Germany is one of the most dense populated countries and has 80 Million inhabitants.
How many immigrants do you want to accept?
1 Million?
10 Million?
100 Million?
1000 Million?
Based on the population and fertility rates of the middle east and especially Africa, 1000 Million (1 Billion) would be a number that is not impossible. But, don't you see a problem there?
I agree that "the west" has a moral obligation to ensure people in other parts of the world are not starving to death. But: a 20-year old from Tunesia or Morocco is not starving to death in his home country, nope.
I was also born in a country "with a strong social system". The so called social system is in shambles, and contributing to it is basically contributing to a ponzi scam.
I think that's what grandparent is getting at. Better to make use of the social system by working little or not at all, now, while it's still paying out, than to contribute now and not get any pension later.
Maybe, but the blame for this situation can't only be placed on the young who see the system failures approaching. Maybe a system built to provide care to its creators is fatally flawed if it is largely dependent on the consent and participation of children and unborn people of the future?
At which point I would like to point out that this world can likely provide for everyone were the economic ideology focused on sustainability and maintaining (at least) baseline human resource needs instead of demanding permanent growth, potmarked by boom-bust crises every 10-20 years.
Sure, earning money is nice, but consider this: you are just throwing 30-50% of your income away. When increase of 100% means 200% more effort, because you're throwing away 50%, you really start considering if the effort's worth it.
Also, at least where I live, we have our benefits capped. So I pay taxes proportionally to my income, but god forbid I get sick, get in accident, lose my job or have a child and take a child rearing leave - even though I've been paying full taxes >10 years, i get instant income cut by 50%. And don't get me started about pension - currently it's set at 75 years for males - and average lifespan is about 70...
So, to sum up, while earning more money, sure, is nice, but throwing the money you've earned fair and square down the drain to support society which will simply not support you is disheartening to say the least.
An example from Belgium. Imagine you're an employee and earning 38k€ a year including bonuses. Now you want to start a side activity as an independent contractor. You pay about 53.5% of taxes on this amount. On what is left after taxation, you pay 20.5% social contributions that you get literally nothing in return for. If you choose the cheapest "social contributions" provider. That means you get to keep about 36.96€ for every 100€ in pretax profit.
Don't you think this steers people in different directions?
When the costs of hiring for the position are much higher, "need to hire" can start to look fuzzy. Just like the "need to buy a soda" is different at $2 and $20. Demand for labor is at least somewhat elastic.
It really depends on where on the range of earnings you are. In Germany earning minimum wage nets you virtually the same amount of money as being chronically unemployed (when taking into account various benefits, like social housing and free transit for the unemployed).
And the benefits are regular and safe relative to a lot of badly paid work opportunities (especially they are not a regular full time job).
I don't think this makes as much sense as e.g. a programmer earning €50k/year vs €80k (especially if you're married with kids, which gives you huge tax deductions here).
Now I made myself sad...