You seem to be making a lot of assumptions about who is giving up citizenship here. Obviously there are some high profile people who are still highly involved with the US, but I'd imagine a lot of folks doing this are those who don't live in America and don't want to deal with the hassle and cost of filing US tax returns every year when they earn no money in the US.
On the contrary! The overall tax burden of many European may be lower than that of the US when you compare like for like. That is, the cost of all taxes in Europe and the cost of all taxes and the fees paid for equivalent services in the US.
For most people, that's taxes in Europe vs taxes + health insurance premiums in the US.
Even if the combined totals are equivalent or higher in Europe, government-provided healthcare provides cost predictability that doesn't exist in the US. One year I might pay a much lower amount in the US, while the next year a single medical procedure could easily double my expenses.
Also, lots of us taxes are hiding in plain sight as "mandatory services". "Gated Community" is basically a different version of social transfer tax. Health system is another huge "mandatory tax". Enormous debts to complete education, whos equivalent you can get for free in europe. If you sum it all honestly up, the us is a pretty bad deal.
There are quite a bit of places in EU with low capital gains tax and can be gorgeous to live in if you're wealthy. For example Croatia is a EU member - capital gains tax is flat 12%, and is a popular tourist destination with beautiful coast. It's not a bad deal if you're a remote freelancer - you end up paying like 20% in taxes total + something like 300€/month flat for health insurance and minimal pension contributions.
If you're software engineer in Poland and spend some time architecting your contract, you can pay only 5% income tax (+ irrelevant amount for social security) as "R&D tax relief for commercializing IP rights".
Point you're making applies to countries like Belgium or France.
If you're using IPBox as average software engineer that has nothing to do with actual R&D or innovation then you should feel ashamed cuz it's straight doubtful from ethical and moral standpoint
I'm all for progressive taxes, but fuck system where Comarch CEO pays fraction of my tax percentage.
I'm not doing it tho, 15% ryczałt (lump sum?) is low enough to not care, and ipbox seems like tax trap. I'm not paying money to villains like Memcen to lower my taxes.
10% is a gross exaggeration, though. Romania has lower salaries than Poland, as far as I know, and in Romania as a senior engineer in a decent company you can get a total <<net>> compensation of €3.5k - €4k per month, that would be ~$4k - $4.8k per month, so ~$48k - ~58k. Again, net. And probably more since there are companies that give you RSUs/ESPPs, so you can go along for the ride. Not as many as in the US, obviously, but a decent chunk. So you could even push towards something like $70k.
I think even at the biggest FAANGS in the US, you total <<net>> compensation as a senior engineer will be $250k-$300k, leaving the ratio somewhere around 4-5x (and this is for a super limited set of companies and positions; I'd imagine that the average ratio would be closer to 2-3x).
And don't forget that local living expenses are minimal. You'd get to keep maybe even 90% of your salary.
I don't know if whether the numbers you quote for Romania are correct or not (Polish salaries for devs are not even remotely close to that), but a salary that nets you €4k/month after taxes is not very common in Sweden - which is considered a richer country than Romania.
The difference between Sweden and Romania is not between Swedish and Romanian software developers. It's between Swedish and Romanian janitors. The Swedish ones probably make 10x what the Romanian ones make. And most people in Romania are closer to the janitor salary wise, than to the software developer.
> I'd imagine that the average ratio would be closer to 2-3x
To which you replied:
> 10% is a gross exaggeration but "the average ratio would be closer to 2-3x" sounds equally exaggerated in the other direction.
My original example pointed to the top of the range and then I used the median, which is the statistically most relevant indicator for comparing salaries.
> 3x != 2x, and I suspect 3x is still too low; also comparing median salaries is not enough.
It's no different than ireland (same % taxation), are they both tax havens? Cyprus is not on the OECD tax havens list for years, and in fact are considered a rather safe choice, hence the rise in popularity of their residence/citizenship programs (and their fees)
Well, you know that you pay taxes on the country you live & work in ? So you have to find a job and a house in Cyprus. And on top of that, Cyprus is one of the few european countries that are not yet in the Schengen area. So you'll have to stay on the tiny 9,251 Square Kilometers.
> Well, you know that you pay taxes on the country you live & work in ? So you have to find a job and a house in Cyprus.
Remote work? Or own a foreign company and pay yourself in dividends? These are extremely common cases.
> And on top of that, Cyprus is one of the few european countries that are not yet in the Schengen area. So you'll have to stay on the tiny 9,251 Square Kilometers.
That's not how Schengen works: Schengen is about being able to freely travel in the Schengen area without having to even show your passport / national ID card. For example I regularly cross borders, by car, between Belgium, France, Spain, Monaco and Andorra (Monaco is Schengen while Andorra, wonderful place on earth btw, is not, but Andorra has got agreements for free travel with France and Spain anyway) and I've never been asked my ID once. Heck, lately I've always been doing my PCR tests, as officially required due to the sars-cov-2 restrictions, and although it's mandatory to cross borders I've never been asked to show them.
A passport from Cyprus allows you to travel, without the need for a visa, to most countries in the world if I'm not mistaken. The thing is: because Cyprus is an island you'll very often be flying to/from there and you'll have to show your passport. But you're definitely not stuck on the island.
> you know that you pay taxes on the country you live & work in
Yes, I know this. I live abroad.
Yes, every country has taxes. The tax rates are not the same. Additionally, countries like Singapore have zero capital gains tax. Executives can just take a symbolic job and pay themselves a symbolic salary, but they're not getting rich off their salaries
> you'll have to stay on the tiny 9,251 Square Kilometers
No you won't, you'll just have to pass a border control whenever you leave or re-enter the country. That's hardly a huge hindrance, unless you're wanted.
