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Comment by Chrono | Hacker News Reader

Dividend is generally taxed at 30% in Sweden so a fair bit of that will be paid in taxes. Depending on how Notch decides to pay out the money to the employees they may have to pay even more.

If it is paid out evenly and as wages it will be about 66k SEK/month per employee, that puts them well into the top tax bracket. Assuming the tax authority counts it as normal income they will be force to pat ~56% income tax a fair bit of social securities and employer tax. Assuming this they might get about (as a guesstimate) 20-25k SEK/m or 240-300k SEK total, after taxes. Not shabby at all, that is close to what an average worker in Sweden earns per year. And that is bonus alone.

None the less; Cheers Notch for thinking about your employees! : )

Edit: Gifts are no longer taxed in Sweden, luckily! but it is likely that the tax authority will regard it as income or bonus rather than a gift.

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I don't see how it can be payed out as wages. The dividend is payed out to Notch. Thereafter, it is his private money, to spend as he see fit. When he hands out the money, it is coming from him, not from Mojang. I can see how the tax office could disagree with this, though... Not sure how it's going to work out in the end, but I'd like a followup to this.

It would make sense if he decided not to distribute dividend but instead bonuses. It seems like he 's going to get taxed twice now.

Notch has tweeted complaints about taxes before. Unfortunately with 16,000+ tweets I can't reference them.

56% income tax? That. is. insane.

Sure if you believe in inequality/social injustice...

I believe most first-world economies have some form of wealth redistribution[1].

[1] http://en.wikipedia.org/wiki/Redistribution_of_wealth

I know socialist sentiments aren't very popular on Hacker News, but some form of wealth redistribution is going to be _necessary_ in a couple of years if the richest continue getting richer (which they will, due to technological advancement) and automation becomes so efficient that most simple jobs disappear. A considerable part of the population will simply be unable to do meaningful work in the private sector. The Luddite argument will eventually be dead, at least for certain groups in society. So the choice is letting them starve, or subsidize them somehow.

How this "wealth redistribution" should happen is an entirely different question, but a flat tax rate including on capital (very hard to implement in practice) or simply flat taxation of everyone above a certain, very high net worth are possibilities.

Note that certain countries already have de facto subsidy systems for low-income/unemployable groups already, e.g. Norway.

The rich always kept getting richer over the years and the poor kept getting poorer. There's nothing new here.

Eventually, we all die. Plus business models and companies get disrupted by technology all the time.

     taxation of everyone above a certain, very high
     net worth are possibilities

In my country the contribution for health-care is 5.5% of my income. This means that I'm paying 10-20 times more than people that sit on their asses all day, doing nothing and complaining about budget cuts.

Giving money to the poor is not the solution. It just encourages sloth.

I think we should just have a Minimum Guaranteed Income and be done with it. Let's stop pretending that full employment if the holy grail of life.

More reading: http://www.xamuel.com/ten-reasons-for-guaranteed-minimum-inc...

Man, when we agree, we agree VIOLENTLY!

Join us :)

Paying for health care and high education is insane.

Nice strawman

So long as that is what you are paying for (as opposed to, cushy jobs-for-life for bureaucrats, which is why in the UK we resent high taxes)

Don't worry, there are lots of cushy, jobs-for-life bureaucrats in private industry too.

That's between them and their shareholders.

And yet plenty of inefficient companies and executives exist. Harmful even.

56% is a sane top tax rate if you feel that you make enough money and you feel that you want to contribute to the infrastructure and services that the government provides.

56% is a low top marginal tax rate. The United States had a top marginal income tax rate that was higher than 56% between 1932 and 1980. It was 90% between 1950 and 1963.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...

Exactly, just look at the Great Depression. 63% throughout. Very sane.

To be fair though, the effective net tax rate in the US was not much different than today back then. That 90% tax rate was essentially fictional in that no one paid anything close to it after deductions and loopholes. It was theater so that politicians could claim the wealthy were paying high taxes.

Reducing the marginal tax rates on income in the US was largely revenue neutral due to the incremental elimination of loopholes, credits, and deductions concurrent with those reductions. If we actually reverted to the tax policies of 1950s I do not think you would be impressed with the distribution of taxes paid.

Ironically, the low marginal tax rates we have today reflect the historical truth more closely than the nominally high rates of the past.

My personal opinion is that anything over 50% is too much. If I work hard and earn a lot of money I should at least be allowed to keep half.

That said, to reach the top income bracket and get a tax between 52-59.9% (Depending on where in Sweden you live) you have to earn somewhere around $80k/yr. Not entire sure about the number but it is in that region. I wouldn't consider that very wealthy, especially not if you live in Stockholm, expensive city to live in.

Why no tax on making money from money. These high tax rates are on money not an people with a lot of money making money...

I must be around that here in Germany, but my life quality is so insanely high that I can't complain. And if I become unemployed, go back to education, or become sick, it'll make zero difference to my living quality.

Germany has a limit at 42% or 45% if you qualify as "rich".

I found this list of marginal taxes: http://www.nationmaster.com/graph/tax_hig_mar_tax_rat_ind_ra...

While Sweden is high on the list, they're actually not in the number one spot -- that's Denmark. USA is in 37th place with a marginal tax of 35%.

Wow. Finally my country places high on an important list!

What you're don't want the place to wind up like America, do you?

(This is how some places view USA, as an example of what to avoid)

I haven't seen it discussed much, but i actually find it odd that tax brackets have an upper end. The tax rate should be a formula that keeps increasing with wealth.

That's how % works.

We are talking about an increase in the rate e.g. the relative amount not the absolute amount. That's definitely not how % works.

Yeah, I understood that. But I tried to point out that it is really unnecessary as the total amount paid is much higher thanks to the fact that taxes are paid in percents. It's a really nice idea for populists but probably wouldn't be good in reality. What have to be done is limit the amount of loopholes where really reach are able to much less then they should.

Then you'd have a point where tax = 100%, or at least where income after taxes doesn't increase with increase in income before taxes.

Thus you completely destroy the motivation of some very important enterpreneurs that just want to earn more than anyone. And they build their business somewhere else.

> some very important enterpreneurs that just want to earn more than anyone

Examples of important entrepreneurs motivated solely, or even primarily, by earning more than anyone, please?

I agree with Jarek, plus there's a law of diminishing returns from wealth above a certain level. Look at people like Bill Gates, calling for higher taxation and distributing their wealth voluntarily because (i believe) they find their wealth level absurd. Wealth inequality is a mother of lots of evils, and taxation would be the easiest way to balance an economy, which in the end would benefit a capitalist society.

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