However plenty of those people leave after that period. Especially with the upcoming 36% unrealized capital gains tax on all your savings and investments.
Feels a bit like ISPs giving discounts to new customers only.
Say you have €80k in investments. Markets go up, in one year time your investments are worth €90k. You did not sell.
That means you had €10k in unrealized capital gains. Subtract the €1800 per person threshold. €8200, 36% tax is €2952 tax to be paid at the start of the year.
Losses give you tax credits redeemable against future capital gains (not against income tax from employment)
Paying tax on money you make because you already have money is far better than playing tax on your time you sold for salary.
Unrealized capital gains taxes are crazy all in an effort to own the rich or something. Meanwhile the people they're perceived as targeting have all the resources to avoid it.
I don't know about non-publicly listed companies, I assume you indeed need to appraise yearly.
The rich don't pay these taxes as the unrealised capital gains tax is only for private individuals, not companies. The rich have their assets in companies / shells.
Well, that's how it used to go, anyway.
Unrealized gains are gains.
Paying for unrealized gains with realized money is not a situation anyone want to be in.
Brought to you by the same party of self-defeating geniuses who thought they could win elections in Texas on a gun-control platform.
Also it's a bit more, right now you are looking at 36% on 6% or 2.16% per year with a €59k threshold. So a bit over €20k a year on that €1M.
Many years ago, a friend of mine in the Netherlands had the same job as another guy, earning the same money, my friend being extremely thrifty, the other guy splurging. When they both found themselves out of a job at the same time, my friend got no support from the government as he had savings, while the other guy started getting a very generous allowance.
This goes directly against all that is reasonable. This is directly discouraging financial responsibility. My friend is thrifty just for the sake of it, he knows it's not in his interest. But he gets the short end.
A legal tax avoidance is to just buy a €1000 TV if you are near the limit. Yes that is as crazy as it sounds but people do it.
This sounds like the Netherlands speed running their way out of investments. If a country I was living in proposed this, I would be leaving ASAP, or getting some heavy financial engineering done.
Where are they draining to?
The average worker in The Netherlands has one of the best QoL compared to average workers in other countries. But the Dutch income leveling and benefit system makes it so a high earner doesn’t have a significantly better QoL. Someone earning €30k has roughly the same spending power as someone earning €50k. (edit: net income after tax and benefits is €42k versus €47k for those two incomes but the person earning €30k has access to cheaper government housing)
In other countries, earning more gives you a better QoL.
Unfortunately, there's no QoL lower bound in the USA, either.
Unless things got dramatically worse in the past 3 or so years, I think you are massively overreacting.
I happen to have a few personal friends that live there, for that matter.
I took a big pay cut moving to Southern Europe, but post-tax I earn the same and everything is just so much cheaper. I honestly have a significant better life here. Good weather too.
I understand you're not the landlord then. I agree this is a problem: the same(ish) earning you mentioned in another comment makes social mobility difficult. Some people are born with a house, others without. That's super unfair. I'd first tax that rather than income.
Every country has its problems.
It’s not perfect but i still think it’s pretty good.
And the median wealth number is another way of saying "house prices are insane" right?
So yes they are high but it’s not like the disparity in the USA where the median is well below Australia (lot’s of people in the USA lost wealth in 2008 and never recovered) while the mean is well above (driven by the few that are extremely wealthy living a lifestyle unattainable to the commoners).
When I lived in Amsterdam, we were renting a flat. The gentleman we were renting from told us our rent easily covers all his expenses in South East Asia.
Spain isn't great for being employed or freelance (autonomo) but if you set up a limited liability company (SL) and work from there it is not that bad. Tax on investments are averagely taxed compared to other countries.
That is only if you haven't accumulated wealth yet. The combination of quite high capital gain tax with sky high wealth tax, pretty high income tax isn't very attractive if your plan is to accumulate some wealth. If you just want to make enough every year to live there I guess it's reasonable though.
CGT is progressive and around 20%, compared to other European countries that is fairly average. Some Eastern European countries are at 15%, Belgian is going to 10%, Switzerland differs per canton.
Also, no CGT for fresh immigrants if you are able to use the Beckham law.
I investigated it some time ago though when I was considering moving to Andalusia so maybe something changed.
As you say, avg workers are "fine" there, but for anyone trying to standout or grow in their career, they will hit an income ceiling very fast due to the high taxation, so it doesn't make sense to keep on growing as you are not properly rewarded for it.
> China is a country that is run by engineers, while the U.S. is a country run by lawyers. Engineers, he explains, are driven to build while lawyers are driven to argue, and obstruct.
> And even though Donald Trump is not a lawyer by any means, I think he is still a product of the lawyerly society, because lawsuits have been completely central to his business career. He has sued absolutely everyone. He has sued business partners, he has sued political opponents, he has sued his former lawyers as well. And there is, I think, something still very lawyerly about Donald Trump in which he is flinging accusations left and right, he’s trying to intimidate people, trying to establish guilt in the court of public opinion
[0] https://freakonomics.com/podcast/china-is-run-by-engineers-a...
Very interesting read, with a lot more depth and details to this short (but accurate) summary.
I think what we can see provably is that China is investing in the development of STEM contributors at the primary school level through advanced degrees and the central government is directing the economy to spend huge amounts on the work that they do.
Furthermore there are complications with unequal resources and means of training. Not just from some families having more money, but also from more knowledge. Children who are read to are more likely to be literate, family businesses, and all that. The unequal resources raises deeper questions about what is the origin of merit.
The real world is messy like that.