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Comment by OstiaAntica | Hacker News Reader

High marginal tax rates in Europe take away the incentive to create a startup, and the governments there confiscate much more of the winnings from successful companies. That, in turn, ensures that there is little venture capital to invest in the next generation of startups.

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I strongly disagree. I suspect you are looking at this from the 'American Dream' capitalist point of view. Our tax rates might be higher, but this is more than balanced out by our strong social security and healthcare systems which allow us to take risks a silicon valley startup couldn't dream of.

I can only speak for the UK (and lumping all of Europe together is pretty foolish given that it has a range of countries from borderline 3rd world to international superpowers) but in London the tech scene is very much alive and well. I myself work for a middle aged startup (going through some horrible growing pains just now), I love to get involved in the London tech scene and I've talked with plenty of people doing well from startups.

Strong social security like in Greece? At some point the system isn't going to assist you much when it doesn't exist. Nor will capitalism either, as we'll all be flying kites made of dollar bills inevitably :)

Well Greece's case is a strong social safety net coupled with rampant tax evasion. A better and to pick in my opinion would be Germany. They have a high tax rate and are an export machine as I understand.

Much of Europe has similar effective tax rates as the US. The difference is the US tax rate is taken out in a lot of separate taxes at the SS, Medicare, Income tax (federal) + State income tax, sales tax, property taxes + local sales taxes, property taxes. Plus Debt and a wide range of fines and fees. Where Europe has no EU wide taxes and it's all taken out at the 'state' and local level.

PS: Per person the US government spends as much on healthcare as many countries with 'national' healthcare so we are paying for it even if we don't have universal healthcare.

I don't know what you consider "similar", but the US does have significantly lower effective tax rates (by 10-15%) than most of Europe: http://www.economist.com/blogs/dailychart/2011/09/effective-...

That's simply ignoring state and local government spending. Ed: And possibly Medicare. It's also ignoring the 50% of company matching medicare which is paid by the self employed.

http://www.usgovernmentspending.com/numbers?units=p

PS: As a sanity check. Federal (24.33 GDP -3.72%GDP given to the sates) State spending is 8.97% of GDP, local 10.69%, which adds up to 40.27% GDP. Note: Actual revenue is only 32.61% GDP because we are just borrowing that much money but debt does get paid back one way or another. http://www.usgovernmentrevenue.com/year_revenue_2012USpn_13p...

the governments there confiscate much more of the winnings from successful companies

What? Citation needed? In some countries they give money to startups, not the other way around.

And how you you explain "high tax rates" when Barack Obama refers to some countries in the EU as a tax haven?

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