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Exit Tax: Leave Germany before your business gets big

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Re: Exit Tax: Leave Germany before your business gets big

#421

Post by MaKey »

weinzierl wrote: post #315
MaKey wrote: post #190

Earlier quoted context omitted.

Why do you consider leaving? Where would you rather live?

Lack of confidence in future economic improvement. A place where I could blend in which rules out the kind of obvious and otherwise excellent choices in Asia.

> Lack of confidence in future economic improvement.

Germany is still the 3rd biggest economy worldwide. If you want to stay in Europe (as per your other comment) and future economic improvement is your biggest concern, I don't see a benefit in moving anywhere else.

Re: Exit Tax: Leave Germany before your business gets big

#423

Post by psd1 »

robocat wrote: post #260
_petronius wrote: post #217

Earlier quoted context omitted.

If you lived in Ireland in that period, you benefitted from Irish government services, schools, police, fire services, etc. You participated in the community (hopefully), used roads, bought things in shops, so and on so forth. Regardless, the idea that the government can only tax you if it directly gave you sufficient benefit, _in your assessment_, is of course nonsense. Taxes are what you owe to the society you live…

> benefitted from Irish government services, schools, police, fire services, etc. You participated in the community (hopefully), used roads That is a terrible basis for argument: we mostly each get similar usage of services (roads, police, yadda yadda) which should be an argument for a fixed amount of tax per person (a poll tax). If you wish to argue that we get what we pay for: then rich people pay wayyyyyy more so…

> The wealthy surely don't get better policing

_Surely not._

> rich people pay wayyyyyy more

Citation needed

> so they should get more government services

...such as corporate welfare, political influence, favourable prices on public land and institutions, regulatory capture?

The acid test for your frame is whether you would have made as much wealth on a desert island, with no market, no value-added inputs, no communication and no currency. If so, then great, you truly did not depend on society. I admire your self-reliance.

Otherwise, you have benefited from the sum effort of every human, living or dead, in the chain of causality leading up to the circumstances in which you made your pile. I'll leave natural resources aside.

I _love_ that a bunch of libertarians are seasteading. More should go. I am happy to write off tax debt for anybody who goes seasteading for, let's say, five years.

If your raft calls into port for trade, then you pay duty and sales tax, but at that point you've admitted defeat. It's not like they'll accept your raftcoin anyway.

Re: Exit Tax: Leave Germany before your business gets big

#424

Post by Workaccount2 »

FredPret wrote: post #398
spwa4 wrote: post #365

Earlier quoted context omitted.

The problem is that the government is financed by a ponzi scheme based on selling very steep GDP growth, very steep increases in the labor force. In other words, the German government as it functions today is financed by having sold the increased income in labor taxation of the next 10 to 30 years to the banks so they could spend it already. Only ... that income doesn't exist. The labor force is shrinking (especially…

The real problem is a social contract that was sold to people long ago without any secure funding source. Now those social services (free healthcare, retirement benefits) are baked into entire populations' expectations and life planning. Give it 20-30 years, then these services can neither be provided nor paid for. Our only real hope is tech progress unlocks much faster economic growth, even with dwindling numbers of…

Despite tech and AI being pretty much the only lifeline Europe has to get itself out of the pit it dug (population collapse while simultaneously promising the world to retirees), they are still strangling the nascent tech scene.

In 30 years are we going to have a European economy that is entirely dependent on foreign AI and robots to prop up a society of old people?

Re: Exit Tax: Leave Germany before your business gets big

#425

Post by throw9349494 »

eqvinox wrote: post #304
throw9349494 wrote: post #275

Earlier quoted context omitted.

This, and barnevernet has reputation similar to gestapo in East Europe.

You might've mixed up your analogy there, Gestapo was a German 3rd Reich thing… NKVD would be the Soviet one.

Germans (including gestapo) gassed a few million people here. Soviets (including NKVD) liberated survivors.

But maybe I read wrong history books.

Re: Exit Tax: Leave Germany before your business gets big

#426

Post by pydry »

bluecalm wrote: post #268
pydry wrote: post #252

Earlier quoted context omitted.

It is at least not wildly regressive like consumption taxes are. It would be better to tax IP protection, inheritance, resource use and land only but realistically if we get rid of capital gains the tax burden will land squarely on wage earners doing all of the actual work who are already taxed more than the people who own their productive output.

There are many ways to make consumption taxes not regressive. You can implement refunds up to certain threshold. You can use the revenue to fund services used by lower income families. You can tax luxury good at higher rates. EU countries already realize it's the case with IT services (everyone wants their share with digital tax) and with big supermarket chains (big issue in Poland). It's just painfully slow for them…

The attraction of consumption taxes largely IS that they are regressive. That's certainly why people like Bob McNair pushed them.

A billionaire who spends 0.2% of their wealth every year, paying a 100% consumption tax on that would still have a vastly lower relative tax burden than somebody who spends their whole paycheck but only pays 50% consumption tax.

Re: Exit Tax: Leave Germany before your business gets big

#427

Post by Workaccount2 »

FredPret wrote: post #412
saubeidl wrote: post #401

Earlier quoted context omitted.

> But if the rich get 10X richer, and the poor get 2X richer, then everybody is better off. If the rich get 10x richer, prices will rise by more than 2x, leaving everybody but the rich worse off.

These numbers are always given on a "real" basis, accounting for inflation. Inflation is hard to measure because products get better and houses get bigger over time. But by every measure I've ever seen, purchasing power per hour worked has been going up exponentially or at least geometrically for 200 years now. If you don't believe this, the World Bank, the IMF, and the US Federal Reserve publish reams of statistics…

People get turned around the axle of income disparity, because what actually has happened since WWII is that society has gone from being huddled pretty tightly around an average income ( a bell curve where almost every household made $65k) to a society where this has spread out further to the right ( a similar curve from $0 to $65k but now with a smushed peak a long drawn out tail going up into the 100's of thousands).

There are more wealthy families right now in the US than there has ever been. More people are earning more than ever before. But it creates a lot of societal fracture and strong negative perceptions. When the whole gang is broke, well we're in to together. When the gang ranges from broke, to comfortable, to some splurging, to wealthy, to flat out rich, the cohesion really takes a beating.

Re: Exit Tax: Leave Germany before your business gets big

#428

Post by oaiey »

zwnow wrote: post #410

Germany is probably the last country on earth you want to found a business in. Bureaucracy Bureaucracy Bureaucracy and these damn workers rights, arrrr those evil Germans!

I am more and more convinced to found a company with the sole purpose of earning money to pay people. Sound strange but the current climate of being evil to employees no matter what is ripe for disruption.

Re: Exit Tax: Leave Germany before your business gets big

#429

Post by Barrin92 »

BillyTheKing wrote: post #332
johnnyfuego wrote: post #99

For a less emotional explanation of exit tax see https://www.grantthornton.de/en/insights/exit-tax-topic-hub . > The purpose of this rule is to tax the increase in value of these shares that came about in Germany but has not yet been realised before they are able to escape the reach of German taxes by the move abroad. Doesn't sound all that crazy to me. Also, the proposed analogy to the Berlin wall feels quite pathet…

The reasoning might not sound crazy, but the result is that a founder based in Hong Kong, opening a holding in Singapore, and creates a subsidiary in Germany is much much better off than a founder running the same business out of Germany - and that's before considering personal income taxes or similar

is this hypothetical Hong Konger real? Someone who wants to set up a company in Germany and is repelled by a theoretical exit tax should they plan to leave a few years later?

We're a big country and the world's 3rd largest economy. From our perspective it makes no sense to become a financial haven for foreign founders who just want to benefit from government support which can be quite extensive only to leave after a few years for some tax haven.

We need to do do more to encourage people to invest here and build ecosystems and make starting companies easier but an exit tax clearly only matters to the get-rich-quick and relocate to Dubai crowd.

Re: Exit Tax: Leave Germany before your business gets big

#430

Post by lenerdenator »

reaperducer wrote: post #390
lenerdenator wrote: post #387

Earlier quoted context omitted.

Who's the German equivalent of the American Certified Public Accountant? Those shouldn't be prohibitively expensive; even small businesses in the US can typically afford one. Just go ask them.

Those shouldn't be prohibitively expensive; even small businesses in the US can typically afford one. Having an accountant is one of the hallmarks of a legitimate business. If you're doing it on your own without a professional to watch out for you, and advise you, and take care of the details so you can do more important things, it isn't a company, it's a hobby.

"That's just moving fast and breaking things and disrupting industries." - someone in SV right now reading this, probably.
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