ASML, a $300B Dutch firm, makes the machines that make semiconductors

My complaint is that the argument about tax just isn’t good at explaining the difference. Eg, choosing basically at random from a quick search[1], one might pay $100k in employee taxes on $265k gross (37%) in the Bay Area. I don’t have a good idea of the employer payroll taxes but if I guess about 8% that’s another $20k the employer needs to pay. Then they pay health insurance (rough guess at $20k per year, but not sure about this average numbers were like this including employee contributions so I’m assuming that plans are good but maybe employees are healthier than average and have smaller families bringing down the costs).

So that comes out to $305k from the employer and $165k to the employee.

Suppose a company spends the same amount in Berlin. That’s €260k. Let’s say there’s 20% or so of employer payroll taxes[2], and we’ll bump it up to 25% for extra private health insurance (no idea if that is reasonable; the 20% includes some compulsory insurance) giving a salary of €208k. And then at 50% effective tax rate[3] that comes to €104k = $120k net, which isn’t really so different from the Sam Francisco example. But you don’t (I think) see many salaries like that in Germany. They would look more like €100k gross[4], so where is all that other money going? I don’t believe there are 160% employer payroll taxes, and businesses generally pay taxes on profits not revenue. So there must be some increase in other costs for the business but I don’t understand what could explain such a big difference

I think the actual argument must be about competition and demand for labour. But I don’t really have a strong argument. Salaries are higher not far away in Switzerland. There is some theory that salaries are high (at some companies) in the US outside of coastal cities because one could believably threaten to move to one, but Europeans can’t typically make such a threat. But many Germans could surely threaten to move to Switzerland, and many do commute across the border. So I don’t see how it works.

Edit: I realise I picked Germany instead of the Netherlands. But I think tax rates are higher in Germany?

[1] https://www.quora.com/How-much-tax-does-an-average-software-...

[2] https://en.m.wikipedia.org/wiki/Payroll_tax

[3] made this number up. I suspect it is actually hard even with a relatively high income to pay such a high effective tax rate. I tried pulling out an online tax calculator but there are a lot of options and I didn’t know what was reasonable. 50% feels like a reasonable overestimate to me.

[4] this is mostly coming from HN. Maybe the Germans earning €200k don’t write comments complaining about salary differences between the US and Europe.

IBM has nothing to do with the business or technical questions, I'm referring to the https://en.wikipedia.org/wiki/Tomasulo_algorithm which was first used in the late 1960s in the floating point unit of the IBM System/360 91 and much later used for the Pentium Pro.

AMD's historical inability to generate profits pertains to its historical inability to succeed well for very long, it's an independent measure of that phenomena. So no matter how well AMD is doing right now, it's in their DNA to fail any time now; doesn't mean it's going to happen, but I'll repeat again that paying a huge sum for an FPGA company is a very bad sign, much worse then their purchase of ATI which did not end up helping their CPU efforts, if anything distracted from the latter. Another sign AMD "will stop" is the reported generally lower quality ecosystem, but I have no good reading on that.

Your comment about a "major ask" is just repeating why I previously said, "Culturally I doubt they can shift to fabless although we'll be able to tell if they're really trying by seeing mass layoffs of managers...."

How much of AMD's "major profits around the corner" will be put into the FPGA unit? It was an all stock deal so they at least won't be having to pay down debt on it, but to restate my main point about it, it's a vote of no confidence in their CPU business, doing it comes at tremendous opportunity costs.

Never heard that money was the core problem for Intel's failure to move to new nodes, so the US government doesn't have the right sort of lifeline to provide. Intel is currently stumbling and I personally guess that won't stop, but that's based on very thin data and what I see the new CEO trying to do.

Or not, if the denials about the rumor about them buying Global Foundries directly from its owner Mubadala Investment Company are correct. If managed well, which is never the way to bet in tech company acquisitions, that would give them invaluable expertise in the business of being a foundry.

Your usage of the term has a loaded definition. You're trying to thread a needle between the nominal cost of living (which has increased) and effective cost of living (which has increased for some), presumably by appealing to CPI. But you can't appeal to a measure that's from the exact paradigm I'm criticizing - of course things look consistent and reasonable from inside that paradigm (but its results on the real world are problematic).

> I don’t feel sorry for horse buggy whip salespeople who had to search for a different purpose in life. They already won a lottery by being born in the USA in the most affluent time in history

I'm not arguing that we should have held back offshoring, and you can spare me the race-to-the-bottom privilege indictment.

> The economy doesn’t owe anyone anything

This is a passive voice, while I'm criticizing a specific actor. "The economy" didn't decide that prices have to go up year over year, and in fact they would have naturally gone down with offshoring. Rather, the government decided that prices still needed to go up year over year, despite the gains made from offshoring.

If prices had been allowed to decrease, then the communities that lost manufacturing jobs would have at least seen some benefit from goods costing less as their own expenses would have gone down. But rather than the promised benefit of "cheaper goods" being realized throughout society, those gains were collected centrally far away from the people most impacted.

You don't have to go down that many layers from the machines that foundries use (arguably objects among the very apex of human technology) to bog standard fabrication machines like lathes and mills and whatever they use to cast metal. We have lots of those around the world. It will definitely take a bit of time, but I don't think it will be all that utterly devastating.