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Comment by unitboolean | Hacker News Reader

Meanwhile, Germany is moving in the opposite direction. Taxes are increasing and now Germany is the second highest taxed country in the world (according to OECD). and freelancers here can't even work without a tax advisers who will manage all their taxes, because the system is so complicated. Mobile internet is extremely expensive. Just one day of using mobile internet in Germany will cost you more than a a whole month mobile internet in Ukraine... everything is very bureaucratic and a lot of paper work is required on every corner. and don't forget, there are more than 300000 laws and rules for everything. I can keep this list forever, but after all, I think I should just move to Estonia, because Germany is definitely not for me.

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It's not moving in the other direction. In fact there's a clear political consensus among the parties (probably) making up the next government that "digitization" should be one of the main foci of attention going forward. Particularly the liberal parties of course (Greens, FDP), but the CDU seem to also fancy this newfangled internet-thingy. Fifteen years late, but moving in the right direction.

I have the feeling this is generally true in the other conservative parts of the EU as well. Eyes are very much on Estonia in the EU for this reason. It's all very sluggish, but the wheels are starting to turn, I think.

Knowing Germany, the transition will probably be 10 years long, because everything has to be 100% perfect and 99.8% ist außerhalb der Fehlermarge!

Sounds a lot like Spain, rules and paperwork. Taxes are lower but so crappy that even with an accountant you often pay the weirdest things and cannot declare many of the legitimate expenses you might have so in the end I pay as much as I did in NL.

The Estonia e-residency is very good for ‘nomads’ ; if you travel a lot (say you do not reside in one country 6 months + 1 days and (but this is debatable somehow) are not in a country more than 60 days continues, you can have a company in Estonia and declare tax for that company there. Which is to say, no tax until you take money out. If you don’t travel like that it is far more complex.

Spain is not nearly as complicated for a freelance. The problem in Spain is that the administration is a disaster in the "customer care" level. Also, every time a new technology appears they have to open a process for companies to bid (basically because their own IT dept is totally overloaded and I highly doubt they are keeping up with technologies) and do whatever is needed, but it's at least one year cycle.

They try to make everything anti-cheat, but in the end cheaters cheat anyway, and in the process they make everything slow and painful.

I can't find any OECD data that says Germany is the second highest taxed country in the world. The closest I can find is the tax as a percentage of GDP and, in that listing, they are 13th.

I'm interested in reading more/a list of the highest taxed nations as a way to easily counter the claim that the US is the highest taxed. Do you have a link/citation, so that I can verify that?

I think the general notion on such lists is that you can think of numerous different ways to rate how highly taxed in nation is. You can therefore come up with many different lists that have different countries in the top few positions. Simply pulling out a well-chosen list allows one to make the claim that a country to be criticized is the highest taxed.

I'd also like to see such a list, but with several different measures of highly taxed, and some plausibly unbiased attempt to aggregate them together. I am curious how the overall taxation compares among countries.

If you're in the US, you probably pay a much lower percentage than you do in many other nations. That much I can establish.

Wikipedia has some good tables but, like you suggest, compiling that data is not that easy due to biases. There are also different names for the taxes, different categories, differences in reporting, etc... About all I can conclude is that I don't pay much, compared to what I'd pay elsewhere, in taxes.

I actually don't mind paying taxes. I do mind how the money is spent, but that veers into a digression and politics. So, I'll skip that for today.

Wouldn't the correct thing be to find some list that just tracks the final tax to each individual, averaged and bucketed over some range of income, ignoring individual reasons for taxes?

It doesn't immediately seem that difficult for a group to gather, if they're interested in declaring average tax by country; and it seems like an interesting enough question that someone should have done it by now

Check how much unmarried singles have to pay.

http://stats.oecd.org/index.aspx?DataSetCode=TABLE_I6

Germany 39%

USA 26%

The early time in life when you build the foundation for your financial freedom. In Germany you won’t get the chance. You will be conditioned to pay into all the nice, costly systems that mathematically will fail due to shrinking population and longer life spans (medical/care costs) long time before you will be able to get „something back“

Hmm... I'm not sure 'unmarried singles' equates to 'secind highest taxed in the world.' That's a rather small category? As a percent of GDP, it is pretty far down the list of the countries they include.

We here in the US enjoy very, very low taxation. What is strikingly odd, to me, is that many of my fellow citizens believe we are taxed at comparably high rates.

At any rate, I'm still not able to find anything that puts Germany at the top, even for corporate/business taxes. It looks like some of the Scandinavian countries are pretty find of taxation, though they do enjoy quite a few benefits from that system.

Edited to clear up some verbiage.

Sort the table. Germany is second.

Yes, I see that. It's second in a very narrow category that I'm not sure equates to 'the entire world' when talking about general taxation. The OP didn't state that "German single people are taxed at the second highest rate in the entire world."

So, while it's interesting, that's not really the same as what the OP suggested.

It is, as I pointed out: Everyone starts as single, unmarried person with 0 children. It's the time in your life when you make the big decisions, take high risks, maybe get high returns.

1. If you cannot save enough money to buy a condo, you will probably run into financial problems once/if you marry and grow your family. It's easy as that. Having children ist one of the top reasons to become poor in Germany. You add additional costs and risks to your life. Sure you pay much less taxes then but you already have a tight income situation (child care is expensive).

2. In the US the usual wages in IT are much higher. Let's say 75-150.000. Minus 26% taxes. You can easily save a lot of money in 5-10 years if you live a modest lifestyle. Compound interest/index ETF savings plan. Simple math.

Hmmm, it is a completely different situation, normally in the US someone that is in IT also has a huge college/university debt that he/she should re-pay.

And besides - probably not so relevant when you are young and fit - somehow you have to consider the social assistance (healthcare before anything else) that Germany (or most EU countries) offers to their citizens (compared to the US provided ones, which is - I believe - 0 or nearly 0).

Before or later you won't probably be a single, unmarried person with 0 children, and I believe that "social" states such as Germany offer a number of advantages when it comes to children's costs, so a good "tactic" would be:

1) be born in Germany

2) study there (for free or almost free)

3) as soon as you are fit to earn a decent wage, emigrate somehow to the US getting a highly paid job in IT

4) stay there for ten years or so, living modestly so that you can maximize your savings

5) when the time comes for marriage, go back to Germany (hopefully in the meantime you will have enough experience as to find easily a well paid IT job there too)

6) get the "social" provisions and benefits that Germany offers you and your family (at the cost of a higher than US taxation level)

Yes. That's how I would do it, if I were 18-20 again. :(

I can't find any OECD data that says Germany is the second highest taxed country in the world.

They got it from the same place they found out they found that Germany also had "more than 300000 laws and rules for everything". You know, the "it feels like it must be so, therefore it might as well be so" place.

Still very strange that they even claimed the citation came from a very specific source. I'm mostly just curious, at this point.

Also, if we count all the various regulations, even at just the Federal level, I'm pretty sure that '300000' is not actually a big number. The US tax code is larger than that.

But, hey! It looks like a big scary number. So, there's that.

I'm a freelancer in Germany and I only have to pay two kind of taxes, income tax and turnover tax.

And Rundfunkbeitrag, Krankenversicherung, Pflegeversicherung, Kapitalertragssteuer, Kirchensteuer, Gewerbesteuer (if you have a LLC (UG, GmbH)...

I concur with parent.

Health insurance: if you're freelance, your health insurance is preferably private (cheaper) and you're free to cancel it if you please.

Capital gains: is for speculations, can choose to "be a saver not a gambler".

Church tax: is for church members, don't join.

Gewerbesteuer: is for LLC/Ltd/GmbH/UG etc --- not for freelancers/Freiberufler

Pflege: never joined that in my whole life. Seems to be optional then.

Rundfunk: this becomes an issue when you register as a resident or fail to deregister as a resident. Now, not being registered as a resident while residing qualifies as "offense"/"misdemeanor" (Ordnungswidrigkeit), not as a crime, last I checked =) (I registered though, when I moved back here after years abroad. Though in retrospect, I have no idea why I did --- for someone who never makes it to the voting booth, all it gives you is GEZ hassles.)

You should talk to a tax laywer

> Health insurance: if you're freelance, your health insurance is preferably private (cheaper) and you're free to cancel it if you please.

No, having health insurance has been mandatory in Germany since 2007. You're free to switch providers, or go from private to public insurance, but you can't just cancel it and go without insurance.

I stand corrected.

The first one is a fee for TV and I haven't heard of anyone who needed an accountant for this. The second and third are health insurance which you should have in every country. The German system of paying for that is not more complicated than some single payer systems such as the UK (NI contributions).

Church tax is automatically deducted with the other taxes. It's collected alongside other taxes and you don't have to file separately for this.

The corporate tax code is certainly not the easiest but common for most countries of the world.

I'd totally agree that German taxes are complicated but the number of taxes to pay says nothing about the complexity. Neither does it say anything about digitisation.

I don't have to pay Gewerbesteuer, Kirchensteuer or Kapitalertragsteuer.

Also, Rundfunkbeitrag, Krankenversicherung and Pflegeveraicherung aren't taxes.

And yet.. Germany has probably the most successful economy in the world. I guess being friendly to startups and freelancers just ain't that important?

What metric are you using to measure successful?

High productivity, huge trade surplus, low unemployment, very high standard of living

Huge trade surplus (and resulting low unemployment) is effect of the euro, which is undervalued for Germany (and overvalued for most of the eurozone).

Germany sure is nice country to live in, but it benefits a lot at the expense of others.

average and peak developer income would be a good metric.

>Germany has probably the most successful economy in the world

Nope. Not even in the EU. Not even close. Where does this myth come from? Is it that it has passed the UK per capita?

I mean, there are loads of nice things about Germany, and economic strength is one, but that's a wild exaggeration.

Well, it's the biggest capital exporter in the world (huge surplus) and is the third largest exporter in total. It's also got the highest GDP in the EU by a fair margin.

Per-capita in the EU is skewed by a fair number of very small but very very rich countries. Luxembourg, the leader, being a tax haven and a population of half a million (!!) does not make it the healthiest and best economy.

Total GDP is irrelevant to everything. People use it like it means something, and it's just annoying.

Ok, that's quite convenient. What metric would you use? Because Germany has a higher GDP per capita than the UK or France. It would be a hard point to argue that any other country in the EU has a stronger economy than those three.

There's no reliable indicator to define success. GDP per capita is skewed heavily by some industries and doesn't represent how well people are doing.

Germany is certainly not the richest country in Europe but it has been one of the most successful when measured vs. 15 years ago. But that was achieved mainly by keeping wages low so that Germans, while usually living comfortably and not threatened by unemployment, have much less wealth than people in the UK or US.

If you have BMW, VW, Daimler, Siemens, Bosch and Liebherr, you can afford not being friendly to startups. Until the next market turn or a disruptive tech makes those irrelevant.

True. They try to fish startup founders by running corporate incubators but they will make sure that you won‘t get a high exit. If the idea works you‘ll get a job offer. If you decline, they will drop support like a hot potato. And because they know all insights, no other competitor is interested in you anymore. It‘s kind of a faux startup culture just to sell some „coolness“ to attract people to big corps.

Not sure. I've heard from a lot of start ups recently moving from London to Berlin. I doubt many start ups have the complexity of the tax system high up on their list. It's about finding talent (where Berlin improved a lot over recent years) and to some degree costs (where parts of London have become extremely expensive).

But it's probably mostly network effects. The US has an extremely complex tax code and SV is one of the most expensive places to live. It still remains a favourite among founders.

Having countries peg their currencies to yours certainly helped: http://fortune.com/2014/10/22/why-germany-is-the-eurozones-b... , meanwhile the other Euro countries are suffering. Even freaking Finland.

https://www.theguardian.com/commentisfree/2015/jun/22/greece...

Successful yes. Harmful and not very sustainable for everyone. Absolutely.

> and freelancers here can't even work without a tax advisers who will manage all their taxes, because the system is so complicated.

Basically everybody with more than a minimum wage job in the US needs this kind of help, and regulatory (actually congressional) capture by the two giants Intuit and H&R Block mean that any efforts to fix this are squelched.

People forget that Germany was still reverberating from its own bounce-back for many years. Now it's bogged down by immigration and currency woes.

As for Estonia.. here's a golden ticket to make international internet income + low cost of living. Not to mention Talinn is charming.

A couple of years ago, my friend bought... IIRC, a 40 MB wireless connection to his and his partner's new second, weekend home in the Eifel Mountains of Germany. (There was no reasonable wired option.)

I forget the exact details, but again IIRC it was well under 100 € / month (40?, 60?) and unmetered.

I was jealous.

Maybe I'm mis-remembering, but it fell into my mental category of "Europeans now getting a lot more and better connectivity for a lot less".

Contrasted with a decade or two earlier, when telecom prices over there seemed to be quite relatively high (compared to the U.S.).

P.S. Pinged him to check the details.

Luckily they can just walk across a couple of open borders to Estonia. Is that right? That must place a cap on how bad an EU country can get since it's competing with the others for citizens.

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