German region to fine Tesla for illegal construction
reuters.com
reuters.com
* They asked for 5 chemical tanks, got 2 permitted, built 5 anyway.
* There will be an inspection of the whole construction site to make sure they didn’t build more than allowed in other areas as well.
* This is the third time Tesla ignored where/what/when they are allowed to do something.
* An unspecified insider said that a lot of things are going haywire at the site.
[0]: https://www.tagesspiegel.de/berlin/gesamte-baustelle-unter-d...
https://www.zdf.de/politik/frontal-21/dokumentation-turbo-te...
It describes how Tesla goes on building things without permits, on a protected area that provides drinking water to the region (“Trinkwasserschutzgebiet”), which they of course chose because they want that water, then proceeded to bury poles [“Pfähle”] going all the way to the groundwater, which is explicitly forbidden. That parts starts at 23:21″, but this video player does not let me link to that point directly.
So they start putting the poles there, illegally, then the regional economy minister comes saying that he talked sternly with them, and that they will have to pay a fine, says “I believe they have learned their lesson”, but later they just got a waiver from the environmental regulations and put all 560 poles in place.
There is a fight between different parts of the local government, with the economy minister courting Tesla, and the environment minister resisting the pressure to just let them do whatever they want.
So yes, it seems that this is not an isolated incident, but a pattern of behavior by Tesla, enabled by part of the local government.
Edit: copy of the video in YouTube, where you can use the automatic translation to English: https://www.youtube.com/watch?v=LQa3uW3qBgo&t=23m21s
Edit2: that attitude is quite a contrast with how hard Elon Musk is kowtowing to the CCP these days: https://youtu.be/oQ4Xqki6VqQ?t=3126
Basically, Tesla does not pay enough here for competent people to work for them.
EDIT: For mechanical and civil engineers, they pay ~10-20% more than market average, but market average works 9-4 (35h/week), has a pretty relaxed work, colleagues are also relaxed, etc. These type of people are used to a very relaxed life, spending lots of time with their kids, leaving their work phone at work, not checking emails after work or on the weekends, etc.
In Tesla you work your ass off, work shifts, there is apparently a high level of incompetency, high turnover, lots of stress to deliver impossible things, etc.
A very skilled friend told me he wouldn't do it for less than 3x their actual salary. For 20% more the offer made absolutely no sense. I think he was there for ~2 months or so. He took a pay cut for their next job, and did so very happily.
If the only people you can attract are juniors without anybody to help them grow, well this is what you get.
Edit - saw your edit, thanks for clarifying!
https://jalopnik.com/elon-musk-tried-to-destroy-a-whistleblo...
When you work more for more money, the taxes explode.
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In Germany, everything that a company gives an employee is salary. Company car? You have to pay 1% of the listing price of the car _per month_ in taxes (that's 1000$ per month in taxes for the employee if their company gives them a 100k$ car..). Stock? The day you receive the stock, price is measured, and 45% you pay in taxes. Stock options? The day you receive the option, the price of the stock were you to exercise it right away is measured, and that's taxed with 45% (which kind of forces you to exercise at least some of the options to pay the taxes), etc.
Otherwise companies could pay you by paying your whole life (car, house, etc.) to avoid taxes.
BTW, this is also why startup culture in Germany sucks. Startups can't really pay people in stock options, cause they are super highly taxed, and they are hard to value. Worst case you end up paying a lot of taxes for something that ends up being valued == 0 the moment you can't sell it (startup dies).
Also you don't have to pay the 45%. That is the highest tax bracket in the progessive system.
So you have to put the 1% (1000€ for a really expensive car you probably only get as a CEO) and assume that as payout. And then you tax that. For a good car you normally are in the range of 300-500€ a month for normal employees and then you can even pay the gas which is a bigger benefit for most people.
Also you don't have to pay taxes on unrealised gains, that is just bullshit. You have to pay taxes only when you realise those gains, e.g. when you pull the option and sell or keep the shares. As long as it is just options you don't have to pay anything.
But with your level of tax knowledge I would also be scared of the bad bad Finanzamt. OwO
> You have to pay 1% of the listing price of the car _per month_ in taxes (that's 1000$ per month in taxes for the employee if their company gives them a 100k$ car..).
You said:
> That is just wrong. You have to tax the 1% of the list price, [...] so you have to put the 1% (1000€ for a really expensive car
Either we both are wrong, or we both are right, unless you are somehow using language in a super subtle way. EDIT: you are right and I'm wrong, sorry, you get 1% of the list price as if it were income, so you need to tax that, i.e., what you said is correct, 1% of the list price is taxed per month. With a 45% tax rate, for a 100k$ car, you need to tax 1k$ per month, and at 45% means you pay 450$ per month in taxes.
> Also you don't have to pay taxes on unrealised gains, that is just bullshit.
I work in Germany. I get stock every month. I don't sell the stock (gains are unrealized). I have to pay taxes for all the stock I get. I do pay the taxes for all my stock (my employer declares it as part of my income).
Also, I've interviewed and gotten offer for some SV startups and they would have allowed me to work from Germany. Talked with 3 financial and tax advisors here, and they all said the same: stock options are part of the income, and just like the stock, they get taxed with your income tax.
> Also you don't have to pay the 45%.
Right, you only pay that if you make more than 50k brutto per year or so. For example, in an entry level job right after the university, e.g., as a PhD student working on a publicly funded project, you have to pay 45% taxes.
> But with your level of tax knowledge I would also be scared of the bad bad Finanzamt. OwO
lol after reading my reply, read also the other replies to your comment
Tax evasion is a crime that you really don't want to commit in Germany. Arguing that "you didn't know" isn't really a defense.
You said: "pay 1% of list price in taxes". They said: "pay taxes on 1% of list price".
There's a difference. For example, given a 50k€ car and 35% marginal income tax rate, your version would result in 500€ additional income tax per month, while their version would result in 500€ * 35% = 175€ additional income tax.
Stock options (or crypto) counted as regular income _are_ taxed at your marginal tax rate, which, for anyone making above 55k€ or so is either 42% or 45%. Can't be bothered to look it up.
A bigger reason from the startup perspective as to why you don't give options to employees is because you become a voting member of the company and have to sign off on major changes (via a notary). Many startups skirt this issue by giving you "virtual options" which turn into money directly after some exit event, as if you got a bonus, and some startups let you pseudo-exercise by allowing you to put the exercised options into a pool controlled by a member of the board or company.
It's a lot more restricted compared to USA (it would be nice to be able to exercise really early when the company is tiny so your tax bill is low, or do something like an 83B election) but it's not that onerous and there are ways to get around some of the worst of it.
FWIW is true for all capital gains after taxes (doesn't matter how you got the stock). If you get stock as income, you pay first 45% tax on the stock, and then when you sell 25% tax on gains.
You can also pay 0% for the company car, but then you need to use it only for work, keep it parked at your employers, can’t use it for anything private, etc.
What most people understand by getting a company car is “a car that you can use for whatever whenever and however you want” (it’s your car). If you do that, and only use it privately, then 1% is what you pay.
Or is 35 the standard for government workers and unionized companies like in construction?
> Or is 35 the standard for government workers
Government workers typically have 40h/week, but govenrment supports 50% and 75% time (so 20h/week or 30h/week) with the corresponding reduction in salary.
> tech jobs
That's usually 40h/week unless you do a tech job at a "metal works" company like BMW, VW, Porsche, etc. in which case its 35h/week. Outside of these companies, you can negotiate your work time pretty much freely up to the legal limits for salaried employees.
Legal limit on a particular day is 10h/day, and you need 1 day off per week, so your max weekly workload can be 60h/week. However, the legal limit _on average_ is like 45-50h/week, so if you work 60h one week, you have to work 20 the next one to avoid violating the average limit.
These legal limits are actually very harshly enforced. It isn't uncommon for, e.g., chinese companies to get fined in germany for violating this, and after the first fine, they are required to report the exact work times of each employee. The fines grow significantly, so usually chinese companies end up closing the office and kicking everyone out after 40h/week to avoid getting close to a second fine.
The "You will do X", followed by our "well actually..." reply, was quite common in the early years.
That wasn't the original claim. If you're paying a high marginal tax rate, you may be making a nonnegative amount of money, but that doesn't mean it's a sufficient incentive to get you to do work when you'd sooner play video games.
But on top of that, it isn't even true. It's not unheard of for marginal rates in practice to exceed 100% as a result of overlapping benefits phase outs. You pay a 25% tax rate, an education benefit phases out at a rate of 25%, a housing benefit phases out at a rate of 30%, a childcare benefit phases out at a rate of 25%, you earn an extra $1 and the government takes $1.05.
This also doesn't account for the cost of earning the money. Your boss offers you an extra half shift, but then you pay the commuting cost (say $10) for 4 hours instead of 8. If your hourly rate is $10, maybe you still take it and make $30. If it's $10/hour but there is a 50% marginal rate, you spend two hours commuting and four hours working to come home with $10/day, and screw that. If the marginal rate was 80%, you're nominally "making" $8/day but in practice you're losing $2/day (and the six hours of time).
That’s the problem with Tesla in Germany: annual salary is 10-20% higher, hourly salary is 30% lower.
My friends quitting lost in yearly salary, but won huge in hourly rate.
A possible answer: https://vtdigger.org/2021/06/13/michael-shank-with-time-runn... We are running out what time for fighting anthropogenic climate change.
As long as there are still new ICEs being built and sold that electric carmakers could displace, it’s understandable why you’d want to go extremely fast in building more electric cars.
(Appropriate regulations should be followed, but still, it’s not as if there’s all the time in the world…)
It’s kind of hard to tell from a popular media article what the reality of the regulatory situation is. Sometimes mere /concerns/ and notes by regulators can be upgraded to “violations” by the press. Everyone just kind of read between the lines and unless you’re an actual expert in the topic it’s super easy for a journalist or (more likely) an editor to try to spin a certain narrative in order to get engagement. And this can happen not due to intention to deceive but simply because the editor isn’t very familiar with the topic.
Publicly available does not necessarily mean easily accessible: The official way they get published is at the official bulletin board ("Amtstafel") or the official gazette ("Amtsblatt") of the local administrative entity, and usually for a limited amounted of time. Most councils etc. do have electronic versions though.
I realize they still should follow appropriate regulations, but it’s still funny to me.
You should also hear the crazies in that country pushing conspiracy theories about how electric cars in fact pollute more. Oh and not to mention they still use coal.
That confusion may have been why they proceeded.
Generally speaking, I don’t think we should underestimate the degree to which regulatory burdens hold back progress in decarbonization. Getting permits for a solar farm in the US is a long process but planting a field for agriculture is much easier spite of concerns for runoff from fertilizers etc. The status quo bias of strict regulations needs to be considered if we are to decarbonize fast enough. (This is particularly bad in the US for increasing housing density and building public transport infrastructure… these things are stymied by status-quo regulations and NIMBYism, and it makes it essentially impossible for us to decarbonize via densification on a reasonable timescale.)
How long does it take to satisfy all stakeholders to get HSR built in California? What about building multiplexes in places zoned single-family? You run into hall monitor NIMBYism and slow regulatory burdens constantly. Meanwhile, people continue to buy big fossil-fuel guzzling trucks and SUVs, planes keep belching emissions, etc. I think the climate is going to run out of time.
(In most places, a building permit represents the approval of construction plans and entitlements, but does not represent permission to build. An environmental permit grants permission to build and conduct activities on a given site. Anyone with any experience in construction would know that, so it sounds like whoever is in charge at Tesla Germany doesn't have experience in this area.)
It’s always weird how people seem to assume that Tesla has a death wish when it comes to permits and such when back-and-forth between regulators and large companies doing large projects is pretty normal and not evidence of massive environmental destruction. In any large project you will have some level of miscommunication or simply inspector concerns.
Simply building tanks that are not yet permitted to hold chemicals is noteworthy for inspectors but is not necessarily actual wrongdoing, especially if Tesla is in the process of trying to get them properly permitted for actual use.
So yes, it matters that Tesla went ahead and constructed some tanks without having the environmental permit first. It's irrelevant that they aren't going to actually use those tanks, as that's a separate provision of the environmental permit.
Is this an "I'm just asking questions" thing?
Without a prior documented restriction for a specific reason, it appears to be government interference.
Was the reason identified? Any mitigations suggested?
Europe varies as lot as well, I wouldn't say that here in Sweden it's a bureaucratic nightmare by any stretch, it's quite straightforward in most cases.
In the US I had to use a 3rd party service because the process is total garbage, takes weeks to complete and requires sending physical paperwork and checks to Sacramento. I have to register in both Delaware and my home state, pay minimum, mandatory taxes to both, totalling ~1000$/yr and pay $100/yr for someone to sit in an office and receive mail in case I get sued. I also have to file physical paperwork with my local city (despite no physical presence) and pay yet more fees.
It’s rent-seeking, antiquated multi-level bureaucratic garbage and there’s zero interest in improving it because that would cost money.
After all that I get the joy of filing taxes with all those entities, plus the federal government.
If you paid a third party to do so...that's on you. You weren't required to use a third party agent for service of (legal) process. Moreover, if you decided to register in a second state (Delaware), that's on you as well. If you don't want to pay taxes for your business in the places where it does business...then why did you register in multiple states in the first place?
I also have to file physical paperwork with my local city (despite no physical presence) and pay yet more fees.
This makes no sense. How do you not have a physical presence in your "local" city. The physical presence is a pretty key part of the "local" bit. (Note that "physical presence" includes employees (and employee-owners) not just dedicated offices or facilities.)
Basically, you're complaining entirely about self-inflicted problems.
Also, when I was still at a firm providing tax services to companies large and small (including a number of YC companies), I had more than a dozen clients move to CA from TX, and only one company move from CA to TX. They moved because Texas simply wasn't a viable place to do business unless you're in oil or energy (and the one client that moved there was in energy).
Texas is where companies go when they aren't strong enough to survive real competition.
For example in most US states an employer can prevent you operating an unrelated side-business - how is that “business friendly”? The answer is it’s not - it’s capital-friendly. It has the effect of shutting out the broader populous from participating in business on their own terms. California gets this right!
There’s also the question of what level “overall” is measured. The US makes it easy to exploit workers and so suffers the consequence of having to support an impoverished strata of society which generates negative tax income to the government. In a society that prevents this, the government can receive more taxes from more people and offer more services, including making business formation easier - a virtuous cycle.
Correct, but that's a small part of it. In fact why would you even need Stripe Atlas if it's easy to open?
Not forgetting a lot of state/city bureaucracy and also what I call private bureaucracy and complications. (as in landlords, clients, service providers, etc)
Bureaucracy is a bit like "the air", people who are born onto it don't see it and don't understand too much how it can be different (of course, in the most egregious cases it wouldn't be hard to optimize/simplify) BUT there's a bit of blindness when it refers to your own country's bureaucracy. (and of course, there are always things that are done 'under the table')
Tesla probably estimated the cost of the fine and decided to go ahead. Just like VW etc.
https://www.rbb24.de/content/dam/rbb/rbb/rbb24/2021/2021_07/...