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Comment by jacquesm | Hacker News Reader

As a local I support this. Simply because having more smart people eventually benefits Dutch society and the long term is far more important than the short term. Usually this argument is based in some for of jealousy, but consider: an expat gives up their current life to chance it all on another, has stupendously high private costs if they want to keep up with their family and has to start all over again from scratch which also carries a lot of costs. Giving them a five year tax break seems like a smart thing to do to me.

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Another supportive argument (especially for Europe, maybe not US) is that those knowledge workers have spent a considerable time, money, and effort to acquire that talent/skill-set, and unlike your own citizen your country spent *zero* euro paying for that.

Most European countries have heavy tax but very protective social services, including free education and universal healthcare, which only works because there's an expectation that when you come of age, you'll support the same system . So every citizen before turning adult (or paying taxes) are a net-debtor for society as a whole. Knowledge worker expats start at zero debt for you.

Worst thing for countries like this is if its citizen get educated there and the best talent just moves to greener pasture (SV etc).

If one can let go of their jealousy and see things practically, some tax incentive makes sense, but should be done smartly (not to cover rich people buying their way in while contributing zero long-term)

>some tax incentive makes sense, but should be done smartly (not to cover rich people buying their way in while contributing zero long-term)

Yeah, it should be tied to your job. If you work for a local tech company in a highly-skilled position requiring a lot of education and experience, then you get a big tax break. If you're just some rich person living off of investments, or you're a digital nomad working for a US company remotely, then forget it.

> there's an expectation that when you come of age, you'll support the same system

I think this is the wrong way to look at it. You are looking at it from an individual perspective. I think it's better to look at it from the perspective of the society as a whole.

Free education isn't a gift to an individual that they need to pay back. Free education is an investment into society. Society as a whole benefits from the fact that there are now well educated people around.

You don't pay taxes to pay back the education you received. You pay taxes to support the society you live in. If you want to live here, you need to pay your share, and how much you personally benefitted in the past or in the future should not affect how much you have to pay.

I'm not looking from an individual perspective, but a balance-sheet perspective.

It's all lovey-dovey to see Free education as an investment and all, but at the end of the day, it's the accountant that will scratch his head looking at the red number on the balance sheet.

I share your idealism that education is more than just economics/investment and you shouldn't think how much you paid vs how much you receive, but when push comes to shove, and the accountant is knocking on your door in panic because the number have been red for decades, you have to face the reality and make (hopefully rational) hard decisions. And that's the part I'm talking about.

You can put your head in the sand and decades down the line to create a crisis like that of Greece, or you can see that to keep this system, you need to be smart and see things for what it is, and adapt the rules around it (such as incentivizing individuals, including from abroad, that is a net-contributor to want to come) while not losing the ideal.

But everyone having your ideal is fine by me. I'm the guy that got a free education(even paid) up to a Masters degree and moved country right after.

> having more smart people eventually benefits Dutch society

Given that most of them don't stay for even five years[0], how does their temporary presence benefit society?

[0] "80% of expat employees use the facility for 5 years or less" https://www.government.nl/topics/income-tax/shortening-30-pe...

It's they stay that short, how much do they tend to rely on taxable benefits?

Someone who stays a few years at the peak of above average earnings might well be highly economically beneficial even at a steep tax discount.

I don't think governments ought to compete on tax in general, but this is one where it might both be a net benefit and there is the arguable case that most tax systems are geared towards people in working age overpaying to compensate for the cost of caring for children and the elderly.

Someone who comes temporarily during working age without a discount will get the downside without the benefit.

This will be a bigger problem for the competitive ability in places with comprehensive social support mechanisms.

Given dropping birth rates, trying to offset that to be an attractive place to immigrate to may well be worth it even if most leave again - especially as long as it's profitable too.

But if your concern is that it doesn't attract people who will stay, maybe there are ways to incentivise that too. E.g. let people earn a discount where a portion does not pay out unless they stay longer.

Having a foreigner stay in the long term could be worse, economically. Five years of taxation on highly-paid individuals - who are presumably producing far more than their salary to the companies paying them - is essentially free money for the country. You did not spend tax money on their education so far and are reaping all the benefits.

Now, if they stay permanently, you will have to pay their pensions and healthcare, which are very expensive.

> You did not spend tax money on their education so far and are reaping all the benefits

That is one possibility.

Another is that the foreigner may have got the job instead of it going to a local. It's also possible that as a result of that the local may be unemployed and hence costing the country money.

In my experience Europe has a dramatic shortage of highly skilled workers, in technology and healthcare in particular. There are simply not enough qualified workers.

I also believe that the economy is not a zero sum game where there is a finite number of jobs. If the Netherlands suddenly absorbed 20k Silicon Valley workers, they would not simply replace 20k local workers. One of them might even create a company that ends up employing that amount of people.

>Another is that the foreigner may have got the job instead of it going to a local.

The birth rate is falling and well below replacement level already, and talent shortages are well-known to be a problem. It's too late to worry about protecting the jobs of locals.

> It's too late to worry about protecting the jobs of locals

What does one offer to locals to show them that they matter? Remember that all locals - even if they are poor or unemployed - have a vote.

If one washes one's hands of an entire group one should not be surprised the next time an election comes round if the outcome is a form of protest.

The Netherlands already voted for a Eurosceptic, invoking similar rhetoric as you here - "replacement" of locals by foreigners, taking their jobs, etc. Interestingly, as is almost always the case in Europe, the places with fewer immigrants voted more harshly against them.

The question we should ask is whether this is rational or not. I think not. If the Dutch want to vote themselves into a Brexit, then so be it - the foreigners will go elsewhere, trade barriers will be erected to "protect" the local economy, and time will tell who will be ahead economically and culturally.

> as is almost always the case [..] the places with fewer immigrants voted more harshly against them

Well, the very opposite of that happened in the UK regarding the Brexit referendum:

"More than 50 per cent of the population growth in Lincolnshire in the last decade has been caused by immigration. Across the county, population growth has been 57,999, with 30,568 due to immigration - a total of 52.7 per cent."

https://www.lincolnshirelive.co.uk/news/local-news/new-figur...

"More than three quarters of the people of Boston, in the county of Lincolnshire in the East Midlands of England, voted to leave the EU. According to the most recent U.K. census in 2011, Boston also has the highest proportion of eastern European immigrants of anywhere in the U.K., after an influx of EU workers to the area’s agricultural sector, earning it the label of Britain’s “most divided town.” Between 2004 and 2014, the town’s migrant population grew by 460%, and the proportion of residents of the Borough of Boston born in EU accession countries such as Lithuania, Poland and Latvia, stands at around 12%."

https://www.cnbc.com/2019/11/28/in-boston-britains-most-pro-...

> The question we should ask is whether this is rational or not.

To vote a particular way in the hope of change? Why wouldn't that be rational?

Hope of change isn't rational because it more than likely will be change for the worse, not change for the better. The idea that a demagogue is going to come along and as a strong man solve all of your problems is infantile at best and irresponsible at worst. Those that vote in wannabe dictators will get exactly what they deserve.

The main issue with populism and why people fall for it is a reliance on narratives over facts. If we discuss consolidated data instead of an anecdote, the conclusion is quite clear, and it shows that you are wrong: https://theconversation.com/hard-evidence-how-areas-with-low...

> To vote a particular way in the hope of change? Why wouldn't that be rational?

There are plenty of historical examples of people voting for "change" that ended up backfiring wildly. I think you could find quite a few of those in the same ideological spectrum of people like Wilders.

> If the Dutch want to vote themselves into a Brexit, then so be it - the foreigners will go elsewhere, trade barriers will be erected to "protect" the local economy, and time will tell who will be ahead economically and culturally.

And plenty of locals will go elsewhere too. I for one. The morons that effected Brexit should be enough of an example that any other EU country that wants to go the same route has been amply warned about what that will do your country. It's amazing that so many people are utterly blind but then again, live long enough and nothing really surprises you any more.

Exactly where would you go? It's not like there's a lot of nice, developed nations on par with Netherlands that you can just pick up and move to. Perhaps some other EU nations, but many of those are electing similar people lately.

How exactly does that benefit the country outside driving up the cost of living for locals (which can't afford rents, houses or other services), since they actually have to pay taxes and are outbid by foreigners which don't really contribute that much to the tax base or have any intention of staying beyond the time in which they extract maximum wealth?

> driving up the cost of living for locals.

That means they are spending a lot of money they earn on the local economy itself no? So even if their taxes are higher, if they are creating value in the economy, the locals do end up seeing those benefits imo.

From the perspective of a someone in country that loses a lot of talented/educated citizens to brain drain, If i were in charge of a country to which high skilled immigrants flock to - even if it is for a limited time, I'd try to see what I can do to convert them to permanent residents. It is a tricky thing to balance because the locals shouldn't feel like second class citizens in their own lands. But at the same time, if skilled people are migrating away - that's a lot of missed potential/opportunity.

What kind of money are they spending?

Besides money directly transferred to wealth land owners via rents, some service owners, the rest goes back to savings to be spend after leaving the country. How are most netherlanders actually benefiting here?

Land owners do end up paying tax on all the money they earn no? And if people are living in a country, they still tend to spend at least 50-60% of it in the local economy itself. (Anecdotal numbers based on expat friends' spending there).

So the expats spend their home country resources for 20-25 years to get educated and be qualified enough to leave it and contribute to a different country's economy, taxes. Now the host country didn't spend any of it's resources in it's education, nor will it contribute to their healthcare - which typically becomes a burden only once they are older, by when they'd have left the country. Still seems like a net positive to me. Just can't put a number on it though. (wrt the 30% tax benefit).

So basically you're making living for locals unaffordable to trade of for tiny amount of taxes from expats and tiny amount of landowner taxes (which are avoided if possible via tax avoidance schemes)?

Sounds like a terrible tradeoff, isn't it?

I also don't get your focus on education, this is Europe, not US where college costs 200.000EUR per person, the aggregate education costs don't even come close to tax breaks.

> So basically you're making living for locals unaffordable to trade of for tiny amount of taxes from expats and tiny amount of landowner taxes (which are avoided if possible via tax avoidance schemes)?

Living for locals getting expensive is because of higher paying jobs - whether or not it is the immigrants who are helping build those industries - no? What is stopping local realtors building more affordable housing for more people? Imo. these immigrants are just accelerating the process of those industries being built.

And I meant more than just taxes. Expat friends of mine are spending 50-60% of their income in the local economy itself. So even if they are getting taxed at 20-30% lower rate for the first 5 years, they probably spent a lot more than the missing 20-30% taxes to gain the skills needed to move there. Do keep in mind that the employers won't be hiring them and moving them from elsewhere if they are not generating more revenue than they are taking in.

The people that hire expats are usually Dutch. Ask them why they hire expats, why they even make booths on other countries and do cold-calls (emails, linkedin) to convince them to go to NL. They're the ones with the answer of where the benefits are going to.

Why them and only them? And why should I "go somewhere" to ask questions instead of asking you in the hive mind why are you defending this? :)

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