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Comment by bufferoverflow | Hacker News Reader

I lived in Italy for many years. It's my impression that Italy is losing its young population due to incredibly low salaries. Young professionals see 10x-20x salaries in the US or 5x salaries in Germany, Switzerland, Norway. And they make one obvious choice.

And your taxes and your version of IRS are just insane. We have a relative, a single mother, who is making 15K EUR a year, and they are going after her because her accountant used a wrong category when she paid taxes 5 years ago, so now she has to pay 10K eur fine for that year and 5K for the next (basically a whole year of income).

Another relative is a medical professional making 88K EUR in private practice, but he pays 55% in income taxes.

Another friend was making 14K EUR per year coding C#. He moved to the US since, now making 10x of that.

It's absolutely insane. I have zero surprise young people are fleeing.

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> Young professionals see 10x-20x salaries in the US or 5x salaries in Germany, Switzerland, Norway. And they make one obvious choice.

If you talk about tech, maybe. But I don't think the salary situation in Italy is that bleak if we look at the whole economy and account for purchasing power parity. Using OECD's number for 2019, household disposable income incl. social transfers in kind, in US dollars/capita at current prices and PPPs for the countries you mentioned are:

Italy: 31.7k

Norway: 40.1k

Germany: 41.0k

Switzerland: 41.1k

United States: 54.9k

https://data.oecd.org/hha/household-disposable-income.htm?co...

Ah, PPP, so these are adjusted numbers, not actual.

I am talking about young professionals, they make a lot more money than that in Norway, Switzerland, USA. We know a Yoga teacher in Switzerland who makes 150 eur/hr, for example.

That's why PPP is so great.

When using it, it doesn't matter if the person makes 150 euros an hour if it costs them that much for a meal but the person in Italy only has to work half as long for a meal.

That's great when talking about people who spend the vast majority of their wealth on "cost of living" type stuff. But does it work in this case?

If a person in Italy makes just enough to live comfortably, you can compare that to a person in Norway who makes just enough to live comfortably. But if a person wants a new iPhone on top of that, they're gonna be paying around $1250 whether they're in Norway or in Italy ($1295 in Norway, $1253 in Italy).

So it seems to me that the calculation is a bit more complex than just some purchasing power parity factor. Even if $1 in Italy was $2 in Norway adjusted for PPP, I would much rather be making $8000/month in Norway than $4000/month in Italy because the price of luxury goods don't vary as wildly as the price of cost-of-living stuff.

Or is my understanding wrong?

PPP matters though. There probably aren't many yoga teachers in Italy spending €3000 per month on rent.

Switzerland can be a nice place for people to work hard when they are young and then move back home to start a family (or business.)

Well, 30% more is exactly what you can save month by month and get to retirement with some tranquility.

Absolutely. 30% is not small at all. It's just small when compared with the 500% to 2000% claimed in the parent comment.

Also note that the difference between the US and Germany is also about 30%. Again, nothing to scoff at, but at the same time not remotely high enough to depopulate Germany.

Ah right. I probably misread the parent, sorry.

The most violent culture shock is the switch from living in Italian tourist bubble to living in Italian societal and economic realities. The moment you realise that people yell and gesticulate not because it looks cute, but because how infuriating is the daily life there.

I found Italian people very friendly, and most of them would try to help me, a foreigner. Most did struggle financially. Most were unhappy with the tax man. Imagine making around the US minimum wage and constantly getting harassed by the IRS.

Nobody pays 55% in income taxes in Italy, the highest bracket is 43©, and of course that only applies to the part of your income above €75k.

Possibly they were receiving 45% net, which is plausible but that is because you are paying for pension and social security, not income taxes.

It is true anyway that IT is vastly underpaid in Italy compared to the rest of the world, and that the agenzia delle entrate is insanely harsh.

Possible that these things are part of the declining population death spiral.

Less people => less economic opportunity => weaker economy => lower wages. Aging population => greater healthcare need, less people => taxes raised to make up the program revenue shortfall.

In Canada the Atlantic provinces through the 90s-00s emptied out for various economic reasons with young people going elsewhere for economic opportunity. It's remarkable to see that their sales taxes and income taxes in the area are much higher than BC, one of the economic powerhouses of Canadian federation.

Very hard to get out of this. I think the only solution really is to open up the taps for immigration. Eventually the relative affordability of the declining area can help this. Nova Scotia just pushed past the $1M mark. The relative affordability of the area, growing acceptance of WFH policies and absurdly stupid expensive real estate everywhere else likely helped.

Agree with everything you said, and while Italy is one of the worst offender on theses topics, they are unfortunately not the only ones in the EU.

I designed a vastly more simple and fair tax system years ago. As a personal hobby challenge. I dont expect it to ever be adopted by any major real world government, because it would disempower too many grifters, haha. But it always makes me amused when I read any horror stories online about tax problems.

The old William Gibson quote about "the future is here its just not evenly distributed yet."

Is it another "tax the rich" scheme, where the rich take their money elsewhere and your country's businesses are left without investors?

It's easy to design a tax system, it's hard to predict its long-term effects.

Care to submit it to HN?

I dont see any upside to it for me, only downside (eg. critics or copycats). if I felt it was a net win I would ;-)

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