111–120 of 413 posts
So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…
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I am not sure that is true as even for stocks, on the other side you have asset managers, hedge funds or insurance companies who participate both in the primary and secondary markets. Of course, you will have similar bubbles forming in stocks than you have in property. But overall it is a way more productive investment. Bonds barely trade on the secondary markets. When you invest into a fund that buys bond, it's pret…
For property you still have ongoing maintenance to pay for, and real estate agents, and the title company, etc. so there are jobs created due to the buying, selling, and ownership of property. If I by 100 shares of IBM in my self-directed account at Charles Schwab there likely isn't a single human being involved in that transaction after I click the buy button. Granted, somebody wrote the code that drives all of that…
So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…
Buying stock on the open market also doesn't create any job for anyone, it just transfers wealth to the hands of the seller. Basically, unless you are investing in an IPO, the company doesn't see a dime from the ongoing trading of it's stock. So the vast majority of investors are not creating jobs by buying stock. Similarly, most bond investors are not buying new issue bonds, they are buying bonds from the current ow…
Not just stock: companies are constantly comparing alternative sources of capital. Any increase in demand from investors for any particular source of capital (bonds, stocks, loans, etc...) will tend to make that capital available at a lower cost to the company.
I have not thought about whether aggregate increases in the demand for housing have the same positive effect on firms, though you could argue that increasing housing values creates home equity and the mortgage interest deduction encourages homeowners to borrow against that new equity and invest the proceeds in ways that will generate a higher return than the interest rate - marginal tax rate, such as stocks. But that happens a lot in economics, many seemingly conflicting forces can lead to the same effect.
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>Cash: no fee Because it just magically transfers from your register to your bank account? :) >It was something like 1% vs. 3% (approximately(!), just to give an idea of magnitude). I know, but by now it is down to 0.9% for most retailers so not accepting credit cards is always an interesting decision. >most credit cards cost a yearly fee of 20-70 Euros or so When you get a card to collect airline miles or get the ca…
> Because it just magically transfers from your register to your bank account? :) No, there is no fee on that transfer. And please don't tell me "but the effort!". Small businesses gladly go through that "effort". Not everybody is Amazon. You just empty the cash register and bring it to the bank. Not exactly dangerous around here either. > Regular cards still don't support contactless That is not exactly something wo…
Well, there usually is a fee. At least here in the US, business bank accounts get cash handling for free up to a certain amount per month. After that you're charged a small fee (as a percentage) on the amount of cash deposited, because the bank sure as hell isn't counting your cash for free.
According to the article, mainly: 1 - Government doesn't subsidize homeowners; 2 - Renting rules are reasonable for renters, increasing supply which makes renting affordable. There, saved you a click.
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They are used all over the world, including in France. Not sure what are you talking about... Except if you live in some rural area...
I don't know many people who use credit cards in France. Practically everybody use the so-called CB which is a debit card (either immediate or deferred, usually deferred), not a credit card. It doesn't allow you to accrue debt: the balance is always re-paid in full, and the linked bank account (usually a checking account) will go red in case of overspending. That said there are definitely credit cards, usually linked…
Average credit card spending per French annually is $300 -- so quite insignificant compared to Americans (which would be almost half their annual salary if not more).
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> Your future mobility to pursue jobs in other cities, becoming significantly constrained Perhaps the idea of people who haven't adopted this is that, unless they like doing so, humans should not have to live like nomads moving here and there to pursue this or that financial opportunity, but instead should be allowed to grow roots in some place, help shape it and improve it, connect with their neighbors, etc.
"humans should not have to live like nomads moving here and there to pursue this or that financial opportunity, but instead should be allowed to grow roots in some place" Why? It's a choice best left to each person, telling somebody what they should do and how to live their lives is patronizing at least.
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>such as the humble credit card out of nearly all Western nations Of course using your overdraft is totally fine, but using the evil credit cards even when paying in full is just like declaring bankruptcy. Doesn't help payment services in Germany that Visa/MasterCard is always considered an evil credit card and debit brands aren't too common.
From the PoV of someone who once co-owned a small business in Germany that accepted card payments: The reason they are "evil" is that they charge the dealer the by far largest fees. Cache: no fee. EC card: small fee. Credit card: large fee. And of course I can't ask the customer to pay for it, I must have one price for all. It was something like 1% vs. 3% (approximately(!), just to give an idea of magnitude). It's no…
As a near-annual visitor to Germany, it drives me nuts that I can't use my Australian credit card everywhere (especially at Saturn). I would LOVE to have an EC card, but it seems there's no way easy way for a visitor to Germany to get one. Seems you need a bank account, and there doesn't seem to be a way to get one without a residency permit. It's not like Australia where a visitor can at least buy a pre-paid reloadable Visa Debit card in any post office.
[If I'm wrong about the EC Cards and bank accounts, please let me know, I'd love to use an EC Card like a proper German whenever I visit.]
Being German I want to pPoint out that the article leaves out one cruicial detail: Building your own home puts you into debt for quite literally the rest of your life. We do not like debt.
What about cars? Are Germans more likely to buy or lease a new car? Or do more people buy used cars with cash?
In the case of "formally a company car", leasing is not perceived as personal debt at all but just as a car that is much nicer than what you would buy on your own and that you happen to loose when you quit your job.
Privately held new cars are the realm of those who can easily afford to pay up front (e.g. a large fraction of those are bought by are retirees in burn those savings as long as you can mode) and those who are at the same time in the top percentiles of both madness for cars and willingness to go into debt (these people certainly do exist, just in slightly but noticeably lower numbers than elsewhere).