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Thread: Denmark front-running for California, New York, New Jersey etc.

  1. #1
    Banned Melonie's Avatar
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    Default Denmark front-running for California, New York, New Jersey etc.

    (snip)"High income taxes in Denmark worsen a labor shortage
    By Carter Dougherty
    Published: December 5, 2007

    COPENHAGEN: As a self-employed software engineer, Thomas Sorensen broadcasts his qualifications to potential employers across Europe and the Middle East. But to the ones in his native Denmark, he is simply unavailable.

    Settled in Frankfurt, where he handles computer security for a major Swiss corporation, Sorensen, 34, has no plans to return to the days of paying sky-high Danish taxes. Still, an unknowing headhunter does occasionally pass his name to Danish companies.

    "When I get an e-mail from them, I either respond negatively but politely," Sorensen said. "Or I don't respond at all."

    Born and trained at Denmark's expense, but working - and paying lower taxes - elsewhere in Europe, Sorensen is the stuff of nightmares for Danish companies and politicians searching for solutions to an increasingly desperate labor shortage.

    People like Sorensen, and there are many, epitomize the challenges facing the small Nordic country, long viewed across Europe as an example of how to keep an economy thriving and a society equal.

    Young Danes, often schooled abroad and inevitably fluent in English, are primed to quit Denmark for greener pastures. One reason is the income tax rate, which can reach 63 percent.

    "Our young people are by nature international," said Poul Arne Jensen, chief executive of Dantherm, a maker of climate-control technology. "They are used to traveling and have studied abroad."

    "They are no longer 'Danes' in that sense - they are global people who have possibilities around the world," he said.

    Denmark is the home of "flexicurity," the catchy name given to a system that pays ample unemployment and welfare benefits but, unusually in Europe, imposes almost no restrictions on hiring and firing by employers. The mixture has served Denmark well, and its economy barreled ahead in 2006 by 3.5 percent, one of the best performances in western Europe. The country is effectively at full employment.

    But success has given rise to an anxious search for talent among Danish companies, and focused attention on émigrés like Sorensen. The Organization for Economic Cooperation and Development, which is based in Paris, projects that Denmark's growth rate will fall to an annual rate of slightly more than 1 percent for the five years beginning in 2009, reflecting a dwindling supply of a vital input for any economy: labor.

    The problem, employers and economists believe, has a lot to do with the 63 percent marginal tax rate paid by top earners in Denmark - a level that hits anyone making more than 360,000 Danish kroner, or about $70,000. That same tax rate underpins such effective income redistribution that Denmark is the most nearly equal society in the world, in that wealth is more evenly spread than anywhere else.

    The movement toward lower taxes passed Denmark by, even as it took root in much of Europe."(snip)

    (snip)"But today young Danes can easily choose not to pay for the system's upkeep, once they have siphoned off what they need. For starters, as citizens of the European Union they are entitled to work in any of the 27 EU countries.

    Sorensen, who graduated from business school in Copenhagen, found himself earning the equivalent of more than $100,000 before he was 30 - and paying 63 percent of it in taxes. His work as a computer consultant for Deloitte also took him to Brussels, where he met the Spanish woman he would eventually marry.

    But the high taxes, mixed with his wife's discomfort in Denmark, meant that a job offer in Qatar three years ago was all it took to pry him away from Copenhagen. Now, he is ensconced in Frankfurt, setting up a new business on the side and planning to pay no more than 25 percent of his income to the German state."(snip)

    (snip)"There are many more Sorensens out there in a work force that is culled from a country of just 5.5 million people.

    The Confederation of Danish Industries estimated in August that the Danish labor force had shrunk by about 19,000 people through the end of 2005, because Danes and others had moved elsewhere. Other studies suggest that about 1,000 people leave the country each year, a figure that masks an outflow of qualified Danes and an inflow of less skilled foreign workers who help, at least partially, to offset the losses."(snip)

    (snip)"Lars Christensen is co-chief executive of Saxo Bank, a Copenhagen financial services firm specializing in currency trading and retail brokerage services. New employees at Saxo Bank get a copy of "Winning," the playbook of Jack Welch, the brass-knuckled former chief executive of General Electric, and "Atlas Shrugged," the libertarian manifesto by Ayn Rand, suggesting that the boss has little time for solutions that beat around the bush.

    "The high tax rate is the No. 1 problem we have," Christensen said. "It's that simple."

    Christensen said about 150 positions at Saxo Bank had been created outside Denmark because filling them at the home office would have been either prohibitively expensive or simply impossible. Finding people at its offices in Britain, Switzerland and Singapore, where tax rates range from 19 to 40 percent, proved easier. But it forced the bank to break up teams of people that it wanted to be concentrated in Copenhagen."(snip)


    It is arguable that the eventual consequences of the social welfare benefit and taxation policies now becoming firmly entrenched in states like California, New York and New Jersey can be very accurately forecast by looking at European countries like Denmark ... which enacted similar policies more than a decade ago.

    ~
    Last edited by Melonie; 12-06-2007 at 03:26 PM.

  2. #2
    AudreyLeigh
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    Holy crap. I shall never bitch about taxes again. Youd probably be better off on their great welfare system than working and earning 100k a year...

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    Banned Katrine's Avatar
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    If any hot Danish men want to come work in the US and pay less taxes, I have an extra room in my condo. Enormous cock required.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Banned Melonie's Avatar
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    ^^^ well, if you're in California, I'm not sure that there is enough financial incentive / tax differential. Just for the sake of asking, what is the total California tax burden on someone earning $100k a year these days ? 33% federal income tax + 7% state income tax + 7% sales tax + somewhere around 7% imputed property tax ?

  5. #5
    AudreyLeigh
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    Quote Originally Posted by Melonie View Post
    ^^^ well, if you're in California, I'm not sure that there is enough financial incentive / tax differential. Just for the sake of asking, what is the total California tax burden on someone earning $100k a year these days ? 33% federal income tax + 7% state income tax + 7% sales tax + somewhere around 7% imputed property tax ?
    Ummm... my guy makes $108K and brings home $5600/mo. So, lemme do a little math.... $67,200...dum do de... $40,800 taxes .... hmmmm.... thats where I get lost... how do I figure the tax rate? But I know thats a LOT. I never really looked at the numbers like that... f'in crazy....

    But now that he can claim 3 it'll change how much he pays in taxes...

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    Banned Melonie's Avatar
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    ^^^ by your numbers, federal income tax plus state income tax plus SSI tax rate = (108,000-67,200)/108000 = 37.8% Plus you have to add whatever your local sales tax rate is ( 7% - 8%? ). Plus you have to add whatever the imputed property tax rate is - say the property tax on your house or the embedded property tax in your rent is $6000 a year then the imputed property tax rate would be $6000/$108000 = 5.5%. So all in all it would appear that the de-facto total tax rate for middle class Californians is on the order of 50% already !

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    God/dess Deogol's Avatar
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    That is why I left California. Just wasn't worth it to work there.

    I just got two calls about jobs out there. They wanted to pay like 30 to 40 an hour. I was like - I don't think so. Go hit rent.com to get an idea what housing is like out there (and pray I don't send ya to Century 21) and then throw in all the taxes and shit.

    It's a third world out there - very expensive yet no pay.

  8. #8
    AudreyLeigh
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    I just havent figured out another state that Id be ok living in. They all have such downfalls that I dont see here... like weather stuff....

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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    I'd take a pocket full of cash with snow any day.

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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    ^^^ then I must definitely be certifiable, because I've got 12" of snow on top of high New York tax rates !

  11. #11
    AudreyLeigh
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    See - Im scared of driving in the rain much less the snow. I freak out, get hot and sweaty and have a panic attack.... not good. I couldnt even deal with all the rain in Hawaii... I just get really scared. I dunno, the rain here is minimal and storms rare, thats why I love it here....

    So for me the weather has a huge impact on where I live and the money isnt worth it (unless I work from home and dont have to deal with it)

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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    Sunshine don't pay the bills!

    (I'm gonna start a bumper sticker financial advice collection!)

  13. #13
    AudreyLeigh
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    lol... but the bills wont get paid if i have to drive thru snow either!!! Plus I havent figured out a state Id be interested in living in...

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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    Quote Originally Posted by AudreyLeigh View Post
    See - Im scared of driving in the rain much less the snow. I freak out, get hot and sweaty and have a panic attack.... not good. I couldnt even deal with all the rain in Hawaii... I just get really scared. I dunno, the rain here is minimal and storms rare, thats why I love it here....
    There are driving schools that could help you get over this fear. There are skid attachments that simulate driving on wet or icy roads, while practicing in a safe, sunny and dry parking lot.

  15. #15
    AudreyLeigh
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    Default Re: Denmark front-running for California, New York, New Jersey etc.

    ^^ That may be something to look into. Then I could look for jobs farther than a 2 mile radius from home.... When I danced I just never worked when it was raining...

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