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German coalition government collapses

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Re: German coalition government collapses

#71

Post by tcfhgj »

jalapenos wrote: post #55
probably_wrong wrote: post #25

If the future German Chancellor is here, here's my proposal for your new campaign: "We choose to build one million affordable apartments in four years, not because it's easy but because it's hard". It may not solve all of Germany's problems but at least you'll energize the construction sector, alleviate the housing crisis, learn how to finish a construction project on time and you'll have to remove some bureaucracy t…

It's unbelievably bad government behaviour. Allow mass immigration, to enjoy the boost in tax revenues and GDP, while dumping all the costs and fallout on the people. Rents skyrocketed, utility bills getting more expensive, waiting twice as long for a doctor? Well that's not my problem, is it pleb? It'd be one thing if they were actively clearing the path for it to minimise impact. Preemptively clearing land and buil…

There is no mass immigration

Re: German coalition government collapses

#72

Post by tcfhgj »

cryptica wrote: post #14

It's frustrating to watch governments constantly argue over what they should do to help the economy when what they should be arguing about is what they should undo to stop hindering the economy.

Less human rights, less worker rights, less long term thinking, more slavery

Re: German coalition government collapses

#73

Post by tharkun__ »

gndk wrote: post #62
tharkun__ wrote: post #59

Earlier quoted context omitted.

enormous exit taxes Huh? Can you speak more about that? much of the western world in a similarly bad state That is the real crux. The only chance so to speak is to go to a western country that's in better state, though it's not necessarily gonna be a good state. The US honestly seems like the best option right now That probably depends on various things. Are you a white male with the right job? Not too bad. Are you m…

> Huh? Can you speak more about that? If you give up residency in Germany and own company shares over 1%, you are taxed as if you sold them at the current value. For private companies, this value is calculated by the tax authority with a procedure called "Vereinfachtes Ertragswertfahren" ("simplified income approach"), where they basically take the average post-tax profit of the last three years and multiply it by 13…

Thanks for the clarifications, since I don't think this is widely known (outside of entrepreneurial circles). That makes a lot of sense then.

So, as a "regular bloke" you can leave Germany for better pastures, no problem. But if you are "independently wealthy-ish", they really want to keep you there, to pay more taxes / employ people that pay taxes. Or take the money anyway, make sure they get their "capital gains taxes" so to speak?

25% capital gains tax is actually not that bad other than that Germany has no equivalent of an RRSP and TFSA. Capital gains are taxed as regular income in Canada for example. Your marginal tax rate is quite probably gonna be greater than 25%. To be fair, you only get taxed on half of the gains in many cases. Quoting https://www.wealthsimple.com/en-ca/learn/capital-gains-tax-c...:

    As of June 25, 2024, however, you will be taxed on 50% of your annual capital gains up to $250,000. For any capital gains over $250,000, that ratio increases to two-thirds, or approximately 66.67%. Here’s how that would look in real life: Suppose one year you sell stocks for $300,000 more than you paid for them. 50% of the first $250,000 of those gains ($125,000) would be taxed as income. 66.67% of the remaining $50,000 ($33,335) would be taxed as well. So on the $300,000 gain, only $158,335 counts toward your taxable income.

    For corporations and trusts, there’s no such threshold: regardless of the total capital gains, 66.67% are taxable
Like, if I was to sell my investments and move to Germany from Canada :) and let's say I had your 5 year example worth of 100k profit i.e. capital gains, to dispose of, even if you made zero other money that year for example would mean you pay $113,685 of taxes that year (in Ontario, just to make an example). That's an average tax rate of ~22.75%, marginal rate of ~53.5%.

Like it does sound like Canadian departure tax basically. And it's not just about companies as the example above shows. That was just me owning stocks. Any Canadian leaving has to pay departure tax. Basically, when you leave Canada you have to pay tax on any of your investments. A "deemed disposition". Pay taxes as if you had sold, even if you keep ownership. Which if you think about it, makes some sense. For all the country knows, you've accumulated wealth without ever paying capital gains tax, because you never sold and now you leave the country (potentially never to come back but who knows?!), and sell shortly after leaving. Leaving to a country with no capital gains taxes. A year later you come back and retire in Canada like you always planned. Deemed disposition prevents that. Makes sense actually. If you do stay in the other country afterwards, that's none of Canada's business any longer.

The good thing here is that we do have the RRSP and TFSA. So hopefully before leaving Canada I would've paid myself dividends over the years, in a tax efficient way and put those into a TFSA to grow tax free and I won't have to pay departure tax on that (or anything in an RRSP). And an RRSP would AFAIK even be tax sheltered as a "retirement account" under Canada - Germany tax treaties.

(fun thought experiment to move from each of these countries to the other :) )

Re: German coalition government collapses

#74

Post by pc86 »

jltsiren wrote: post #57
pc86 wrote: post #11

Earlier quoted context omitted.

What is unstable about the US?

In a stable democracy, whenever there are elections, the losers accept that the elections were fair and they lost. If there are reasons to believe that the elections were not fair, or if the losers refuse to admit that the elections were fair and they lost, the system is unstable. Peaceful transition of power is the most important factor in the long-term stability of any system of governance. Whenever a leader loses…

He left office. He wasn't kicked out (other than the election of course), it's not like Secret Service had to drag him out of the Oval. He left. He also went through the whole process again and we know how that turned out.

To imply that the US is an "unstable democracy" is laughable.

Re: German coalition government collapses

#76

Post by gndk »

tharkun__ wrote: post #73
gndk wrote: post #62

Earlier quoted context omitted.

> Huh? Can you speak more about that? If you give up residency in Germany and own company shares over 1%, you are taxed as if you sold them at the current value. For private companies, this value is calculated by the tax authority with a procedure called "Vereinfachtes Ertragswertfahren" ("simplified income approach"), where they basically take the average post-tax profit of the last three years and multiply it by 13…

Thanks for the clarifications, since I don't think this is widely known (outside of entrepreneurial circles). That makes a lot of sense then. So, as a "regular bloke" you can leave Germany for better pastures, no problem. But if you are "independently wealthy-ish", they really want to keep you there, to pay more taxes / employ people that pay taxes. Or take the money anyway, make sure they get their "capital gains ta…

> Pay taxes as if you had sold, even if you keep ownership. Which if you think about it, makes some sense.

It does make some sense, yea. The draconic thing is taxing you on a fictitious sale. I wouldn't have a problem with it if it was delayed until you actually sell the shares. There are actually ways to delay it, but they require a collateral.

For example if you can reasonably prove that it is a temporary absence up to 7 years when moving outside the EU, you don't have to pay the exit tax, but need to have collateral.

If you move inside the EU, the exit tax actually clashes with the EU's free movement directive and I think there are pending court cases for this up to high levels.

So if you move within the EU, you can delay indefinitely without interest, but they will still require a collateral. And if you want to leave Germany, you'll usually also want to leave the EU for the same reasons...

Switzerland is an option because due to various bilateral agreements, it is treated similarly as other EU countries.

Its funny that you mention this Canadian departure tax on stock holdings. Because just a few weeks ago the German government actually enhanced the exit tax and it now also applies if you own more than 1% OR 500k€ in a _single_ investment fund.

Supposedly this is to close loopholes around creating family-owned investment funds to get around the exit tax.

But as we all know, once a new tax is there, it will never go away. Easy enough to lower the limit or apply it to all holdings in the future.

Re: German coalition government collapses

#77

Post by jltsiren »

pc86 wrote: post #74
jltsiren wrote: post #57

Earlier quoted context omitted.

In a stable democracy, whenever there are elections, the losers accept that the elections were fair and they lost. If there are reasons to believe that the elections were not fair, or if the losers refuse to admit that the elections were fair and they lost, the system is unstable. Peaceful transition of power is the most important factor in the long-term stability of any system of governance. Whenever a leader loses…

He left office. He wasn't kicked out (other than the election of course), it's not like Secret Service had to drag him out of the Oval. He left. He also went through the whole process again and we know how that turned out. To imply that the US is an "unstable democracy" is laughable.

The US was already unstable in 2000. Once courts get involved in determining the outcome of elections, it's a sure sign that the system is no longer functioning properly.

Instability does not mean that a collapse is imminent. It means that further shocks may cause a collapse more easily than in a stable system. It makes a collapse more likely in the long term, which in this context means something like a human lifetime.

Re: German coalition government collapses

#78

Post by tharkun__ »

gndk wrote: post #76
tharkun__ wrote: post #73

Earlier quoted context omitted.

Thanks for the clarifications, since I don't think this is widely known (outside of entrepreneurial circles). That makes a lot of sense then. So, as a "regular bloke" you can leave Germany for better pastures, no problem. But if you are "independently wealthy-ish", they really want to keep you there, to pay more taxes / employ people that pay taxes. Or take the money anyway, make sure they get their "capital gains ta…

> Pay taxes as if you had sold, even if you keep ownership. Which if you think about it, makes some sense. It does make some sense, yea. The draconic thing is taxing you on a fictitious sale. I wouldn't have a problem with it if it was delayed until you actually sell the shares. There are actually ways to delay it, but they require a collateral. For example if you can reasonably prove that it is a temporary absence u…

Not just stock holdings. Any investments. Except for your primary residence, if you sell it before leaving. So e.g. you're not safe just because you didn't own stock and instead created a real estate investment empire :) If you keep your primary residence and rent it out for example (presumably because you do want to come back and retire in Canada?), then capital gains will accrue from the date you leave Canada.

Fictitious sale = deemed disposition. Same thing. If you can't pay the tax from cash you have lying around you will have to actually sell some of the investments.

Now I do get that selling a business might not be as easy as selling (part of) a liquid stock. But take the real estate example again. Selling your real estate empire seems much harder than selling some of your NVDA shares to pay the tax. If you aren't prepared to sell your business though and you want to hold onto it, why would the government be inclined to believe that you really want to leave and never come back so to speak?

Re: German coalition government collapses

#79

Post by gndk »

tharkun__ wrote: post #78
gndk wrote: post #76

Earlier quoted context omitted.

> Pay taxes as if you had sold, even if you keep ownership. Which if you think about it, makes some sense. It does make some sense, yea. The draconic thing is taxing you on a fictitious sale. I wouldn't have a problem with it if it was delayed until you actually sell the shares. There are actually ways to delay it, but they require a collateral. For example if you can reasonably prove that it is a temporary absence u…

Not just stock holdings. Any investments. Except for your primary residence, if you sell it before leaving. So e.g. you're not safe just because you didn't own stock and instead created a real estate investment empire :) If you keep your primary residence and rent it out for example (presumably because you do want to come back and retire in Canada?), then capital gains will accrue from the date you leave Canada. Fict…

> If you aren't prepared to sell your business though and you want to hold onto it, why would the government be inclined to believe that you really want to leave and never come back so to speak?

No idea. And for a corporation (GmbH) in Germany, it would actually be trivial to track and control this, since the ownership transfer is only possible through a notary public and only becomes legal fact after its published in the public company register. So put a flag on it, and when that transfer shows up, just block it until the exit tax from when you left is paid.

Re: German coalition government collapses

#80

Post by mango7283 »

itslennysfault wrote: post #43
nosianu wrote: post #15

Earlier quoted context omitted.

This is not destabilizing this democracy. The FDP has done that same thing before - twice! In 1966 and 1982. Abandoning a non-functioning government and calling new elections is part of democracies. Just ask the Italians (68 governments in 76 years), or recently the French and the Brits.

I wish the US democracy had this feature. We have to just suffer through it for 4 years.

You have midterms for the Congress though?! That's ever 2 years and actually very frequent for a legislature
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