Might have to pay "talent" more than $40k a year before aiming for the moon.
TLDR SV pay is likely too high and unsustainable in the long term. Equity moonshots are already lottery tickets, and you can't set public policy based on lottery tickets.
I think we would move in the direction of US tech companies if we managed to create five world-class tech behemoths, but I don't see that happening. Taxation will necessarily affect things; some places have an employer tax that approaches 100%. (Half the salary to the employee and half to the state, then tax the employee's share again afterwards).
Can't think of a single country having that. This money which you count as tax goes into retirement, healthcare and stuff like that. Would you consider US packages including healthcare to be taxed ?
This tax could of course consist of social security or retirement benefit contribution, if so I got an incomplete picture. Are you by chance familiar with this system?
I am familiar with Norway's system. Employer pays 14% of employee's gross salary as tax and required to pay at least 2% as retirement contributions. Employee normally pays in somewhere between 30-40% tax on what's left, 8 percentage points of these being the state retirement contribution. Socialized healthcare. Company taxed 22% on all profits and owners taxed 31% on all dividends and capital gains. Most of the particularly rough parts of the tax system are in form of VAT, taxation of capital and special-purpose taxes on various sectors and activities, mostly transportation. With the 70%-ish oil producer tax being a welcome special case of this.
In this case, our modest salaries for globally in-demand skills are mostly due to a lack of very profitable companies, plus probably a degree of cultural bias against high performers.
Marginal tax rate tops out at ~46% after $110,000/year, so one isn't incentivized to work hard for salary increases.
The lion's share of what the employer pays is not taxes. It is, indeed, mandatoty, but it is not a tax collected by the state, as it opens individual rights to jobless claims, health insurance and retirement schemes.
Revenue tax is also directly taken from salary since a couple years ago, but that means most people don't pay any tax besides what's on their salary.
If it’s a state mandated by the state that you can go to prison for not paying economically it’s a tax. It functions exactly like a tax in every way. That it’s legally something else is irrelevant to economic impact.
These payments are made to a mechanism that, in return, opens rights for workers, such as pensions to retire, full health insurance, or work insurance. These are very much individual benefits, not some kind of tax scheme that goes to fund roads or the army.
If you want a comparison, car insurance is mandatory in the US, but it is not considered a tax.
The seemingly only place that’s replicable is in Switzerland at a handful of companies (Google and some small other companies) and that’s not even in the EU.
You literally don't, since companies provide this. Unless of course you're accounting for the better healthcare you'd receive in the US?
> cost of living
Where most IT jobs are based in europe it isn't cheap to live at all..
So x% has already 'come off your paycheck' before you see it, and then an extra 15% on everything that you buy. Which is also hidden.
That is offset by extra services, esp. healthcare, but in tech, healthcare is usually a benefit on top of salary anyhow.
The US may not average $120K for devs, it's probably lower across the board. Then you actually do have apparent inequality problems in the US and if that were taken care if, it would be even less.
It's not as wide as indicated by salaries, but it's still a gap.
Europeans don't really need to save much money. Because the government takes care of health, education and all the essential things. Why do you need a lot of money if you have everything taken care of.
On the other hand when you are living in US or anywhere else you need to have a shit ton of money in bank just to make sure that you don't go bankrupt.
For example education for your kids would be ridiculously expensive in US. And if you don't have an insurance you might get bankrupt if you have to hospital for emergency.
If I have a choice to be born again in a random country, I would be opting for Germany or some scanadanvian country for sure. US is too risky to be born randomly.
Europeans still need money.
Also, remember, that taxes pay for that, so with less incentive to work, there's equally less incentive for taxes to pay for all of that stuff.
The degree to which it is an incentive is really complicated, but it is real to some extent.
The reason is that you’re competing in a much more varied market with less silly money splashing about. Cost of living in London is high, but you’re competing for jobs with competent teams in Eastern Europe. That coupled with fewer VCs funding “Uber for cats” ideas, there’s just not the appetite for paying devs US level salaries.
That’s not why the salaries are so much lower. European companies are less profitable so they don’t bid up the wages of developers as much. The more money a company makes the more a productive member of staff is worth to them, so they are more willing to pay it. That drags up the market rate because everyone has to compete with the highest payers for the best devs.