Do you think they should be forced to stay? Suppose it was easy for all of those high performers (who wanted to leave) to move to the USA. You would lose out on that extra tax revenue, and it would undermine the redistribution scheme.
Thats a big stretch and a huge thought experiment, and way out of scope of what we're talking about (but no I don't). Any sort of systemic change on that scale would make me reevaluate where I live though - if for example I lived on a country that flip flopped between right wing and centrist every four years I would be pretty uncomfortable with that.
> Suppose it was easy for all of those high performers
A bit of a nitpick, but an important one. High performers and high earners are not the same thing.
No there was not a huge capital flight. This have been aborted solely because of threats from the ultra richs in France.
Moreover, this law was actually pretty fair : it was applied on marginal annual revenue over 1M so it meant that you had to be actually a multi-millionaire to be concerned.
No, France didn't threaten to force high earners to leave, they tried to enforce a higher tax on the absolute absolute highest earners in the country. Even making 3-400k you would have been unlikely to have been affected by this. Funnily enough, you'll also notice the bluster was about people leaving to other EU states and not to the US.
Also, to call the French government socialist I'd completely laughable. Maybe in comparison to somewhere like Hungary, sure.
I am not talking about Macron, I am talking about Hollande, which is (was?) the leader of the Socialist Party.
And I may be wrong about it, but I think that he increased taxes all across high-income brackets, not just the absolute top. And that certainly leads to a game-theoretical equilibrium.
To me (and I assume others) the following calculation comes into play:
- for what I pay in taxes, do I get a reasonably good public services back? I am not saying that I want to account for every euro, but I don't want to feel like I did in Brazil, paying 38% effective tax rate and receiving virtually nothing back in public services and still having to pay again for private healthcare, private education for the kids, etc...
- how much money do I have left in the bank after I paid all my expenses and taxes, i.e, what is my saving power?
If I had a 250k€/year brutto income, it wouldn't be too difficult to show that I would be better off in Switzerland (higher CoL, but way lower tax rate) or in Greece (similar tax rates, less return on public services, but way lower CoL). If Germany decided to increase the effective tax rate, this threshold would go down significantly.
>Despite a generally higher cost of living in Europe, salaries across the board are lower.
I was more responding to that idea: everything is more expensive, and everyone is making a lot less (not just the top quintile). Seems like a bad trade, but that's just my $0.02
Except everything isn't more expensive. For example rent. Also, everyone can go see a doctor and pay nothing (not just the top quintile). All of this is if course simplified, but just to add another pair of cents.
And groceries. I was _shocked_ at how expensive buying fresh food was in the US, and funnily enough, the most desired food was imported from the EU and was far more expensive. Here's a great comparison - aged parmesan cheese from the supermarket [0] [1] is $11/lb here, or $17+tax in the US. This is the same for a huge amount of ingredients too; cheeses, meats + veg. I helped a friend do his grocery shopping in a trader joes, by my best guess it was twice the price of my shop in Sainsbury's (a middle-of-the-road supermarket)
> aged parmesan cheese from the supermarket [0] [1] is $11/lb here, or $17+tax in the US.
No shit, it’s literally an import from Europe. It’s like comparing California wine prices in Las Vegas vs in Sydney.
> veg. I helped a friend do his grocery shopping in a trader joes
Trader Joe’s is not a grocery store for middle class people. It’s a high end convenience store. Unless you’re really well-off, you only buy a few select items from there occasionally.
If you want to see prices the working/middle class pays, look at the prices at Walmart.
No. Imported wine is quite often cheaper than domestic ones in the US.
Also, you want to compare the quality of products and you can not base yourself on Walmart for that. The average American eats horribly compared to the European counterpart.
> Imported wine is quite often cheaper than domestic ones in the US.
Not anything of quality. Most good wines in California that aren’t nasty blends are California wines at $10/bottle range.
> want to compare the quality of products and you can not base yourself on Walmart for that.
Yes you can. The milks, meats, vegetables, and fruits are fine quality-wise. “Walmart == bad quality” is a meme based on their cheap home goods. The food is fine.
> The average American eats horribly compared to the European counterpart.
Having lives in both places (uk, France, and Italy), the supermarkets in the US are vastly superior. The only reason an American would eat worse is if they chose frozen meals, snacks, or just straight up fast food over what’s in the grocery store.
European food costs more and is of more limited variety. The quality is consistently decent though.
Given we're talking about why salaries are higher in the US, i think it's fair to point out the comparison of items that are possible to buy in a normal supermarket here. I searched for parmesan in Walmart and could only buy an entire wheel for ~$26/lb.
The people who I'm comparing myself to in the US strive to buy imported European food, so that's the comparison I'm going to end up making.
Even basic things like fresh vegetables and fresh meat far more expensive than they are in supermarkets here.
