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What is EU Inc.? The European Commission proposal aims to make it easier to start, grow and expand a business across the EU with simpler rules, digital registration and fewer barriers.

Backed by the European Commission under President Ursula von der Leyen, EU Inc. could allow companies to register within 48 hours for less than €100, attract investment more easily and operate across the EU under a more standardised framework, while national tax, labour and social rules continue to apply.

In this video:

00:00 Why expanding across the EU is complicated

00:16 What is EU Inc.?

01:02 Register a company in 48 hours for less than €100

01:20 Funding and investment

01:37 Tax, labour and social rules

02:07 What happens next

02:22 A simpler EU Single Market

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[–] ExtraJudgement@lemmy.world 2 points 5 days ago* (last edited 5 days ago) (1 children)

The data is very clear. See in particular in terms of how people need to be relieved:

  1. Lower the value added tax, 0% for staple foods.
  2. Lower social contributions.
  3. Lower the income tax.

In that order. Note that lower social contributions can (and should) just be balanced via the federal budget.

But since people vote for parties that will never do this and all but ignore parties that would, people will continue to get screwed.

[–] atro_city@fedia.io 1 points 5 days ago (1 children)

I don't read German... but maybe define "social contributions". Do you mean contributions that workers and employers pay to fund the safety net?

VAT has a function. Are you pleading for it to be lowered for everybody?

And your point 3 is already in what I said "They should get rid of the income tax and just have a wealth tax.". Are the measures you're suggesting in addition to what I said or place of it?

[–] ExtraJudgement@lemmy.world 1 points 4 days ago* (last edited 3 days ago)

but maybe define “social contributions”

Very roughly: Money taken out of your salary, which goes into health insurance, pension insurance, nursing care insurance, and unemployment insurance, as well as some other minor specialized levies like U1 (to fund part of your income in sickness), U2 (to fund part of your income in motherhood), and U3 (to fund part of your income in case your employer goes insolvent). For most people, they are typically all mandatory.

About half of the first three plus U1, U2, and U3 are taken out of your "total" salary as the employer sees it (they are part of the total cost of your labor). The rest is taken out of the "gross" amount you see on your salary statement (the cost you agreed to in your work contract)*. That's why there are two differently shaded turquiose areas in the graph.

The full details are more complicated.

* Most people here in Germany don't even know about these additional levies, as they don't show up on your income statement. Same as the half subtracted before the gross ("before taxes") number you see on it; plenty of people still think "the employer pays the other half of my social contributions", which is only correct if you don't consider the total mandatory cost of your labor your salary - which imho is asinine, because that's the value your labor must exceed in order to stay employed long term.

VAT has a function.

The function of a system is what it does in the standard case, under normal operating conditions. As a flat tax on consumption, it is a regressive tax, meaning what it does is it affects poorer people more, because virtually the entirety of their income has to go into consumption. All else being equal, it strongly contributes to the current situation where most of them will never be able to save enough money to become not-poor. This is what the graph linked to earlier shows: The higher your income, the less you care about VAT. Thus, if you want to slow down the redistribution of wealth from poor to rich, reducing VAT (at the very least for staple foods, for which there is already a separate tax rate that you just have to lower to 0%) is the fastest way to do so within the bounds of tax&levy policy.

Are you pleading for it to be lowered for everybody?

Yes. If you really don't want higher income people to profit from this at all, increase the income tax rate for the highest 5% by just enough to compensate for it, which currenly is very roughly somewhere around 130k EUR gross per year.

And your point 3 is already in what I said “They should get rid of the income tax and just have a wealth tax.”

I'm saying: In Germany, reducing the income tax (the lower brackets, specifically) comes in (a very distant) third place among the things one should do to alleviate most people when it comes to taxation & levies. If you just reduce income tax, you don't affect poor people much at all, because most of them already pay little to no income tax.

Are the measures you’re suggesting in addition to what I said or place of it?

"In place" of the reductions, and only for Germany, because that's what the linked statistics shows for it:

  • Poorest people are most affected by VAT (darkest grey)
  • From there, until around the top 10-20%** of earners social contributions are the main burden (bright turquiose + desaturated bright turquiose)
  • Only for the highest 10-20%** is the income tax the highest burden (dark turquiose)

A different illustration for the same data is here, where vat = blue, social contributions = grey (dark+light), and income = red.

Personal note: This is imho why right-wing parties in Germany are always talking about reducing income tax. Because they know it sells well to the electorate while doing the least for most of them.

** Rougly eyeballed from the illustration, don't quote me on the numbers.