I mean the income tax is lower; not necessarily the income—as I described in #59.

But again, if you just do business with companies here in Finland, then setting-up a residence in Estonia won’t be worthwhile. Unless of course you plan to make the business grow….

Also, as a software developer, most of your income will be taxed as personal income anyway; that’s obviously much lower in Estonia.

Then there’s the cost of labor….

Blah. If the location of the business is irrelevant, then one should naturally select a real tax paradise. Off to Jersey we go. Doesn’t Estonia have a higher capital gains tax than Finland?

“I think we’re a bit more sensible about executive pay here in Europe. I know the CEO of one of the largest tool manufacturers here in Europe; he drives an old Opel. Of course he can afford more. But it just shows that there’s a different mentality here. Probably based on old military structures. Maybe it’ll change over time though.”

I think this is changing fairly rapidly RIGHT NOW. Haven’t you noticed? Ordinary employees real salaries are just about kept unchanged whereas executive salaries grow exponentially. The question is not what type of car you drive. The question is, how many years can you live WITHOUT salary – given the part of your salary that can be saved after “life-supporting” costs.

This development has been very much to the liking to the economic libertarians btw.

“Yes, I don’t have a good reason for the cause. Other than maybe good showmanship.”

Or too many blogs like this one .

However, to fully take advantage of the tax savings, you’d need to have a residence in Estonia. But that doesn’t preclude you from having a villa along the southern coast of Spain, a penthouse in NYC, a chill pad in Tonga….. And of course, your mökki here in Finland

But, as I mentioned, it’s mostly useful if you plan to hire people and seek contracts outside of Finland; leverage works against you here. Eastern Europe is a great hedge.

When we take a trip back here into the real world, Estonian IT subcontractors charge about 20€/h for the kind of work that costs 60€-100€ in Finland. Buying from Estonia will probably get you better value for money, but I see little point in selling myself short and moving to Estonia to work for Finnish clients.

That’s a lazy response Phil. The estimate of 4% comes from the EU. Growth of 3% per year would make this come true (last year it was over 5%), which is around what is predicted by the OECD.

You seem to forget that the US had unemployment of 6.5% after the post bubble recession and it went down to 4.5% in two or three years. Growth rates then were lower than Finnish growth rates.

Fred:
Well, they do manufacture furniture (among other things). If it does not come from then then it will from somewhere.

Would that somewhere be outside the US by any chance?

– Not likely. The US still have domestic furniture manufacturing and Government contracts often give preference to them, regardless of price.

As for the $15/hour of benefits in New York City, I heard it in a radio program

Are you sure the radio host wasn’t high on Vicodin when he said it?

Since it was radio and they were not slurring their speech, it is kind of hard to tell. Anyway, the basic issue is, the higher the compensation, the more people who will accept it over work. After all, if you can get a certain amount of income for doing no work at all and you are offered work where you need to work 20 hours just to earn the amound you were given for free, it is hardly an incentive to get a job.

How about letting people on unemployment/welfare keep receiving that income for a set period if they find a job? That would be an incentive to take a job as they would be losing nothing other than some free time. Maybe hold it and then give them access, like some sort of re-employment bonus if they keepthe job for a year or so.

Sure, but those who are seeking international clientèle benefit from systems like Estonia’s. They need to charge (international) market prices for their services. Estonia’s (and e. Europe’s) low tax burden and labor costs give them a much higher profit margin.

But also, as in my example of a client who decides not to pay, a low tax and labor cost model is a buffer against any possible losses. And against resulting legal costs incurred. You’re relying on accumulated personal savings at that point; you’ll have more saved in Estonia or e. Europe.

Of course, if you’re clients are exclusively here in ‘honest’ Finland, then such thing are less to worry about. But, as I mentioned before, the OECD’s recommendations will help you—especially on the macroeconomic level.

Franklin: “ It seems that you’re having an indulgent moment. Don’t bogart it, pass it along.”

Ok, here….

Perhaps that’s true. But, I bet Nokia’s top US executives get paid 20X more. Not that I think that’s great……

Thomas: “Are you a socialist suddenly?”

Aren’t we all?

“But seriously, where has the wealth “concentrated among the workers”?”

I think we’re a bit more sensible about executive pay here in Europe. I know the CEO of one of the largest tool manufacturers here in Europe; he drives an old Opel. Of course he can afford more. But it just shows that there’s a different mentality here. Probably based on old military structures. Maybe it’ll change over time though.

Thomas: “ And you calling the “not concentrating among the workers”, oligarchy, seems like a joke to me.”

Well, I’m not above telling a good joke

Thomas: “But there are no laws (not even economic one’s) forcing anybody to allow this “dilution”. Yet it happens.”

Yes, I don’t have a good reason for the cause. Other than maybe good showmanship.

3) If current trends continue Finland will have 4% unemployment by 2010.

…and by 2020 it’ll be 0%. YAY!! LOL!!

Yeah, those 200k€/year paying opportunities are just waiting for the taking in Estonia. It seems that you’re having an indulgent moment. Don’t bogart it, pass it along.

Fred:
Well, they do manufacture furniture (among other things). If it does not come from then then it will from somewhere.

Would that somewhere be outside the US by any chance?

As for the $15/hour of benefits in New York City, I heard it in a radio program

Are you sure the radio host wasn’t high on Vicodin when he said it?

Where are Finnish welfare numbers?

http://www.kela.fi

Why would this be difficult? It’s a persistent myth that, granted, even many Finns believe.

I’ve experienced two thirds of a company I worked for being fired without compensation. It didn’t appear to be that difficult.

I’m sorry. Let me clarify that. You can’t fire someone and then hire a replacement in Finland.

This is a gem. So those prison manufacturing jobs would be available to the US population?

Well, they do manufacture furniture (among other things). If it does not come from then then it will from somewhere.

As for the opintoraha, you are the first one to discount the work restriction. Of course the amount is minimal if you work full-time, but as a student, that’s not possible. It should be repealed as the students are paying taxes on their earnings, so taking away what they are entitled to, results in double taxation.

As for the $15/hour of benefits in New York City, I heard it in a radio program and can’t find a net reference. (Lets just say its good and I dare say beter than Finland. Where are Finnish welfare numbers?) I did find a reference that a woman on welfare earned more than a worker in the Soviet Union, but that’s another story.