Isn’t it a bit disingenuous, calling highly skilled professionals “top earners”? Wouldn’t the top earners be C-suite level, skilless leeches?
I’d argue no, but with an important distinction: the issue is how the term “top earner” gets conflated with “wealthy.”
When talking strictly about income tax, a skilled engineer earning €100k and a CEO earning a high salary face surprisingly similar marginal tax rates. In Germany, the top income tax rate (Spitzensteuersatz) of 42% kicks in at around €70k of taxable income. Once you add mandatory social security contributions, a skilled professional making €80k–€100k is already paying close to 50% of their gross income in taxes and deductions.
Because of this system, skilled workers look like “top earners” on paper, but this creates a massive misdirection in political and media debates.
Whenever there is a call to “tax the rich,” politicians typically respond by debating whether to increase the Spitzensteuersatz or the Reichensteuer (the 45% top rate). But doing that doesn’t actually hit the rich, it hits upper-middle-class professionals like IT specialists, engineers, and doctors. Politicians can then easily deflect the discussion by saying, “We can’t raise these taxes; it would hurt the productive middle of our society.”
The truly wealthy do not build or hold their wealth through monthly wage income. Their wealth comes from assets like corporate stock, real estate, and capital gains. In Germany:
- Capital gains are taxed at a flat rate of ~26.4% (far lower than the top income tax rate).
- Wealth/asset ownership itself is not taxed (Vermögensteuer is inactive).
- Wealth transfers and corporate inheritances often benefit from major tax exemptions.
If someone earns a high salary through labor and already gives up nearly 50% in tax and contributions, I personally would say, they are paying their fair share. Squeezing high-earning workers even more is counterproductive. If we actually want a fair tax system, the political debate needs to stop focusing on income tax and start focusing on taxing capital gains, asset growth, and wealth transfers equally.
Rant over.
Capital gains are taxed at a flat rate of ~26.4%
Which only the most stupid superrich (or normal people who saved up) really pay.
If you’re superrich all your assets belong to your holding. When you gain money from your holdings (e.g. dividends) they are taxed way below 1%. Your now untaxed capital sits in your holding. Privately you now put that holding as a security for a credit. Bravo, now you are privately in debt and can save some more taxes.
How do you pay off the credit though? Fear not: next year your holding is worth more, because it once again gained untaxed income. You just borrow more money, pay off your old debt and repeat that.
Within the space of a year, more than 288,000 German citizens have moved abroad. This is confirmed by data from Germany’s Federal Statistical Office (source in German) (Destatis).
This is more or less in line with the long-term trend as per the linked source. Net migration for German nationals has been negative in the higher 5-digits for several years, while there are more non-Germans entering the country, resulting in a positive net migration.
Edit: We can measure ‘brain drain’ by several standards as we know. One is the Human Flight and Brain Drain Index (HFBDI) that measures the economic impact of “human capital flight”, commonly referred to as “brain drain,” within a country. The index ranges from 0 to 10, where a higher score indicates a greater degree of human capital flight.
The HFBDI shows relatively low scores for higher developed countries, and high scores for countries in the Global South. Germany has a score of 1.6, more or less like all of Europe, North America, and Australia and New Zealand,
The HFBDI average for 2024 based on 175 countries was 4.98 index points. The highest value was in Samoa: 10 index points and the lowest value was in Australia: 0.3 index points.
The world’s two largest countries, India and China, show relative higher brain drains according to this metric with scores of 4.8 and 3.3, respectively.
Pass an exit tax of 38% like Norway did.
I hadn’t heard about this but I love the idea
Germany should tighten its laws; it is quite easy to first leave Germany, pay no German tax or contribute in any other way, and then return again when it is opportune (e.g. when you get old or sick and want to use the German benefits).
And go where? Everywhere is fucked in different ways
The people being talked about? Somewhere else in the EU with higher wages, lower cost of living or lower taxes, in some combination.
Denmark, the Netherlands for pay, Eastern EU for CoL for example.
If everywhere is fucked, you might as well be somewhere warm and beautiful.
It‘s warm and beautiful until you need a doctor. Then it‘s just underdeveloped or overpriced and you come crawling back. There never has been an exodus of the rich specifically.
Which makes perfect sense sense once you realize this system they threaten to move out of is what made them rich. They‘re economic winners. Why would they suddenly leave to some foreign place where things are uncertain? Chaos is only a ladder for those at the bottom.
With climate change, why move if you can just wait.
There are places less fucked. Ireland comes to mind
Monaco. No income taxes, full of sports assholes evading taxes on their 20 million euro contracts.
Oh no!
Anyway…
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Works fine for me.
