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Comment by symphom | Hacker News Reader

The reason is simple. If you were a top developer, would you like to make 80k€ at a German software company, paying 33% income tax, or 160k$ at a US company paying 9.3%. And in the German company, the non-technical management is traditionally payed a high salary than the engineer. Of course things are changing, but German developers will have to learn to ask for more. And until that happens, the trend to leave for greener fields will stay.

Edit: 9.3% was off a google search. see below for more knowledgeable numbers.

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Well, you might have to pay higher taxes in Germany than in the U.S., but please don't perform a "Milchmädchenrechnung" (naive fallacy) to just compare the tax rates...

In Germany, the education system from kindergarten to university is basically free (although schools could be much better funded), you have a public health care system that (mostly) works, public transportation, a welfare system that makes sure that everyone can at least survive, etc. etc....

I spend some time in SF, and even with a much higher income and potentially lower taxes, I'd never be able to afford the same quality of living there, especially if you have kids.

> If you were a top developer, would you like to make 80k€ at a German software company, paying 33% income tax, or 160k$ at a US company paying 9.3%.

Well, that depends. If I have to put more than half of that 160k$ (which is obviously a Silicon Valley example) into the measly place that I live in because rents and house prices are through the roof (like in...Silicon Valley!), the seemingly high salary can easily become very misleading.

> Of course things are changing, but German developers will have to learn to ask for more.

That is true, but I can also see this happening right now due to the relative shortage of personnel. It just takes a while, because the management people can't easily justify sudden salary raises in the upper double-digit percentage area. People need time to build a higher general level of salaries in the area, but it is definitely something that's going on right now.

Silicon Valley is not even close to that expensive.

A 2 bedroom apartment in Pacific Heights, San Francisco's most expensive neighborhood, can be had for 6k in rent per month, which is $72k per year, which is still less than 80k.

I lived in US for 6 years and always paid %40 for tax. Add that very high living expenses, expensive insurance policies where you pay lots of money and still get poor health service.

Besides, US immigration system is not based on your skills. As an engineer you sign a slavery visa (h1b) and can not quit your employer until getting greencard. They give greencard to random people with lottery, not a joke. Your wife can not work, too.

In Europe tho, you get blue card right away. This is why I left US and choose Berlin as my next city. I'll make less but more valuable income here.

You'd have to make an incredible salary to pay 40%.

You nearly have to make $750,000 per year in Boston to pay 40% between Federal + State + FICA.

Per a new study by the Journal of the American Medical Association comparing 11 developed nations on cost vs results, the US doesn't have poor health service. It's a lot closer to a lower-median rating among top developed nations than a grade of poor. The US scores very poorly on accessibility (10% of the population doesn't have coverage), and it scores very poorly on cost.

"One of the more notable findings in this report is that, at least in some areas, the quality of health care in the U.S. fared comparably to other countries. Long wait times for treatment, for example, are not as much of an issue for Americans as they are elsewhere. In treating heart attacks and strokes, the U.S. actually had the best record of any country. So, contrary to past findings, the quality of care may not be much worse in the U.S. than elsewhere. But the nation's was still shown to be the least accessible health care system."

https://www.cnbc.com/2018/03/22/the-real-reason-medical-care...

https://jamanetwork.com/journals/jama/article-abstract/26746...

I wish I hired you as tax consultant!

In all seriousness though. In California at $500,000 for 2017 the combined effective tax rate is 40.64%.

Your premise is correct in regards to the salary. However, you're going to pay a fair bit on that $160k in the US. The US has one of the most progressive income tax policies in the developed world. The median full-time income in the US is about $50,000; at that level, you'll pay a 8.7% (2018) effective federal income tax rate (2018), however FICA (Social Security etc) and state taxes will typically get you for another 12-14% or so. At $160,000 your effective federal income rate jumps to 18.6% (for 2018).

This is Federal + State + FICA, on $160,000:

Boston: $48,000; Los Angeles & San Francisco: $52,000; Boise, Idaho: $51,000; Seattle: $40,000 (Washington has no state income tax); Miami FL: $40,000; New York: $55,000

Basically you're looking at 25% to 34% total. Your healthcare will also likely be covered by your employer, external to the salary, and obviously we're not counting any stock compensation.

With all the taxes in Germany together you're also paying around 42.5% of your 80K salary on taxes. Income tax is not the only tax we have.

I have no doubt about that. I'm merely pointing out in response to the parent, that you're going to pay a fair bit on a $160,000 style income in the US, not 10% style rates.

https://smartasset.com/taxes/income-taxes tells me it is 34% tax in SF, CA for single at 160k USD.

Why do you think it is 9.3%?

How exactly are you going to only pay 9.3% income tax in the US?

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