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Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

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Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#41

Post by nlh »

beagle3 wrote: post #28

Every single experience I've had with a swede, (technical, entrepreneur, or otherwise) has been extremely pleasant. It might be selection bias - most of those that I've met were outside sweden at the time I met them - but from spending some time in Lund, I got the impression that it's a national trait, to the point that I have considered moving to sweden for a few years if the stars align properly. Perhaps we can hav…

I've had the same experience. Though on an interesting note - I had drinks with one recently and told him as much, and he was taken aback by my observation. "Really? I've found them to be quite difficult at times." Maybe there's something cultural about the way they interact with themselves vs outsiders? Or, as you pointed out, maybe it's the ones who leave Sweden regularly :)

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#42

Post by beagle3 »

mbesto wrote: post #36
beagle3 wrote: post #19

Earlier quoted context omitted.

How high are the taxes in Sweden? Highest bracket in Tel-Aviv is, as far as I know, ~60% (50% income tax + 10% health/social taxes) + 17% VAT (=~sales tax equivalent, essentially applicable to individuals but less so to companies) Highest bracket in NYC as of 2013 (unless the "fiscal cliff" is averted) is a few % short of 60% (40% federal, 13% state, 2% fica, 2% social security, and a few more). If the fiscal cliff i…

I don't know a single person in NYC who actually pays at a 60% tax rate. Yes, the city and state taxes are very high (and is on par with other countries). But, anyone in that tax bracket has and will pay for an accountant to shed a lot more off of that. So the effective tax rate is much less. Swedish income taxes are extreme and have a very high VAT as well (25%): http://en.wikipedia.org/wiki/Taxation_in_Sweden

First, it's not 60% yet, it's 50-55%

Second, I know quite a few who are at almost-the-maximum. Most people, when they talk about their taxes think only federal. AMT at 28% is a bitch, and NYC at 13% is too, so if you're less than 40%, you might be an audit away from serious action (despite what your highly paid CPA tells you).

Ask high-worth individuals in NYC with >$500,000/year income and a few millions to lose what their overall tax rate is.

Third, deductions are available everywhere (at least they are in Tel-Aviv) and can be used to lower your tax burden. If you use them as intended, it means that your tax rate is not lower - it's just that your books do not reflect expenses in the right place.

If you use them too aggressively, you risk criminal charges.

Finally, you should add your accountant fees to your taxes. No one does. Most people in Sweden submit their tax return with an SMS saying "all has already been reported by employer / stock exchange / bank".

I spent two full time weeks doing my US returns this year. Officially, I'm paying much less than the highest rate. In practice, I'm paying it, and possible more, if I put Tel-Aviv, Stockholm and NYC on equal footing.

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#43

Post by bjourne »

luuse wrote: post #39
beagle3 wrote: post #19

Earlier quoted context omitted.

How high are the taxes in Sweden? Highest bracket in Tel-Aviv is, as far as I know, ~60% (50% income tax + 10% health/social taxes) + 17% VAT (=~sales tax equivalent, essentially applicable to individuals but less so to companies) Highest bracket in NYC as of 2013 (unless the "fiscal cliff" is averted) is a few % short of 60% (40% federal, 13% state, 2% fica, 2% social security, and a few more). If the fiscal cliff i…

They differ all over sweden depending on how old you are, how long you've been working for and how much you earn. In Stockholm you pay about 30% in income tax (add 20% if you earn more than 401 100 SEK annually, you earn about 360 000 SEK annually as a newly graduated MS CS student). However you also have another tax, the employment tax, which isn't displayed on your salary specification and is paid by your employer…

Sorry but that calculation is just stupid. Thanks to deductions, the income tax paid for even a high earner does not surpass 28%. The 20% state tax is only paid on income in excess of 401 100 something that is always conveniently forgotten when discussing taxes. E.g. the tax scale is progressive which is to offset the trend that the more you earn, the likelier you have other incomes such as investments returns which are taxed significantly lower than salary tax. Yes, Sweden still has high taxes but the situation is not nearly as bad as you make it out to be.

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#44

Post by SuperChihuahua »

_of wrote: post #32

Some downsides with Stockholm: (1) It is difficult to make friends in Stockholm, because Swedish people are generally very reserved; (2) It is very dark and cold most of the year; and (3) Summer is short.

Conclusion: productivity++

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#45

Post by beagle3 »

luuse wrote: post #39
beagle3 wrote: post #19

Earlier quoted context omitted.

How high are the taxes in Sweden? Highest bracket in Tel-Aviv is, as far as I know, ~60% (50% income tax + 10% health/social taxes) + 17% VAT (=~sales tax equivalent, essentially applicable to individuals but less so to companies) Highest bracket in NYC as of 2013 (unless the "fiscal cliff" is averted) is a few % short of 60% (40% federal, 13% state, 2% fica, 2% social security, and a few more). If the fiscal cliff i…

They differ all over sweden depending on how old you are, how long you've been working for and how much you earn. In Stockholm you pay about 30% in income tax (add 20% if you earn more than 401 100 SEK annually, you earn about 360 000 SEK annually as a newly graduated MS CS student). However you also have another tax, the employment tax, which isn't displayed on your salary specification and is paid by your employer…

Your math doesn't make any sense - the 81% (assuming that all is right, and bjourne says it isn't) is out of 131%, not out of 100% - so the actual tax is 61%. Still high, but on par with Tel-Aviv and NYC (assuming fiscal cliff) - and you get back infinitely more than NYC and just "a lot more" than Tel-Aviv.

I'd say it's great.

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#46

Post by king_jester »

beagle3 wrote: post #42
mbesto wrote: post #36

Earlier quoted context omitted.

I don't know a single person in NYC who actually pays at a 60% tax rate. Yes, the city and state taxes are very high (and is on par with other countries). But, anyone in that tax bracket has and will pay for an accountant to shed a lot more off of that. So the effective tax rate is much less. Swedish income taxes are extreme and have a very high VAT as well (25%): http://en.wikipedia.org/wiki/Taxation_in_Sweden

First, it's not 60% yet, it's 50-55% Second, I know quite a few who are at almost-the-maximum. Most people, when they talk about their taxes think only federal. AMT at 28% is a bitch, and NYC at 13% is too, so if you're less than 40%, you might be an audit away from serious action (despite what your highly paid CPA tells you). Ask high-worth individuals in NYC with >$500,000/year income and a few millions to lose wha…

> Ask high-worth individuals in NYC with >$500,000/year income and a few millions to lose what their overall tax rate is.

Wouldn't we expect the tax rate for such individuals to be high? It's not like someone with that high of a pay will suffer from a 50-60% tax rate.

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#47

Post by lrem »

beagle3 wrote: post #28

Every single experience I've had with a swede, (technical, entrepreneur, or otherwise) has been extremely pleasant. It might be selection bias - most of those that I've met were outside sweden at the time I met them - but from spending some time in Lund, I got the impression that it's a national trait, to the point that I have considered moving to sweden for a few years if the stars align properly. Perhaps we can hav…

Beware of possible problems when relocating. I know an experienced graphic designer who moved there, due to personal reasons, to see her career go to a sudden stop. At some point she forced a HR person from one of the companies ignoring her CV to answer why. It went more or less like that:

- Oh, that's simple, you completely lack experience.

- Have you missed the entries in my CV?

- No, but none of them was in Sweden.

On the other hand, this may be completely irrelevant in startups.

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#48

Post by luuse »

bjourne wrote: post #43
luuse wrote: post #39

Earlier quoted context omitted.

They differ all over sweden depending on how old you are, how long you've been working for and how much you earn. In Stockholm you pay about 30% in income tax (add 20% if you earn more than 401 100 SEK annually, you earn about 360 000 SEK annually as a newly graduated MS CS student). However you also have another tax, the employment tax, which isn't displayed on your salary specification and is paid by your employer…

Sorry but that calculation is just stupid. Thanks to deductions, the income tax paid for even a high earner does not surpass 28%. The 20% state tax is only paid on income in excess of 401 100 something that is always conveniently forgotten when discussing taxes. E.g. the tax scale is progressive which is to offset the trend that the more you earn, the likelier you have other incomes such as investments returns which…

Yes, sorry about that, that's true. I forgot that for a few minutes when reading up on the actual percentages (regarding the state tax).

However the regular income tax is still around 30% and while regular employees don't see the employment tax (arbetsgivaravgifter) i'd still say it's an income tax because it's based on your income and not on how much you work or when you work.

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#49

Post by ry0ohki »

beagle3 wrote: post #28

Every single experience I've had with a swede, (technical, entrepreneur, or otherwise) has been extremely pleasant. It might be selection bias - most of those that I've met were outside sweden at the time I met them - but from spending some time in Lund, I got the impression that it's a national trait, to the point that I have considered moving to sweden for a few years if the stars align properly. Perhaps we can hav…

>Perhaps we can have a sweded version of NYC in the US?

Minneapolis? The "super nice" midwest basically has it's roots in Sweden.

Re: Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

#50

Post by eru »

beagle3 wrote: post #34
mdemare wrote: post #29

Earlier quoted context omitted.

When social security will pay out more than comes in, the difference will come out of general tax revenue. There are no books to balance. The retirement age may go up, but reducing or eliminating social security is electoral suicide.

I'm sorry to burst your bubble, but that's not how math and economy works. The US is borrowing half of what it is spending right now. That can only go so long (maybe 10 more years, maybe 20 more years, but definitely not for 50 more years). "General tax revenue" right now covers approximately half of government expenses, without having to cater to social security. social security + medicare spending grow at 8%/year f…

> The US is borrowing half of what it is spending right now.

Are you talking about government expenditure and tax take? Or about the general economy?

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