Most European countries have heavy tax but very protective social services, including free education and universal healthcare, which only works because there's an expectation that when you come of age, you'll support the same system . So every citizen before turning adult (or paying taxes) are a net-debtor for society as a whole. Knowledge worker expats start at zero debt for you.
Worst thing for countries like this is if its citizen get educated there and the best talent just moves to greener pasture (SV etc).
If one can let go of their jealousy and see things practically, some tax incentive makes sense, but should be done smartly (not to cover rich people buying their way in while contributing zero long-term)
Yeah, it should be tied to your job. If you work for a local tech company in a highly-skilled position requiring a lot of education and experience, then you get a big tax break. If you're just some rich person living off of investments, or you're a digital nomad working for a US company remotely, then forget it.
I think this is the wrong way to look at it. You are looking at it from an individual perspective. I think it's better to look at it from the perspective of the society as a whole.
Free education isn't a gift to an individual that they need to pay back. Free education is an investment into society. Society as a whole benefits from the fact that there are now well educated people around.
You don't pay taxes to pay back the education you received. You pay taxes to support the society you live in. If you want to live here, you need to pay your share, and how much you personally benefitted in the past or in the future should not affect how much you have to pay.
It's all lovey-dovey to see Free education as an investment and all, but at the end of the day, it's the accountant that will scratch his head looking at the red number on the balance sheet.
I share your idealism that education is more than just economics/investment and you shouldn't think how much you paid vs how much you receive, but when push comes to shove, and the accountant is knocking on your door in panic because the number have been red for decades, you have to face the reality and make (hopefully rational) hard decisions. And that's the part I'm talking about.
You can put your head in the sand and decades down the line to create a crisis like that of Greece, or you can see that to keep this system, you need to be smart and see things for what it is, and adapt the rules around it (such as incentivizing individuals, including from abroad, that is a net-contributor to want to come) while not losing the ideal.
But everyone having your ideal is fine by me. I'm the guy that got a free education(even paid) up to a Masters degree and moved country right after.
Given that most of them don't stay for even five years[0], how does their temporary presence benefit society?
[0] "80% of expat employees use the facility for 5 years or less" https://www.government.nl/topics/income-tax/shortening-30-pe...
Someone who stays a few years at the peak of above average earnings might well be highly economically beneficial even at a steep tax discount.
I don't think governments ought to compete on tax in general, but this is one where it might both be a net benefit and there is the arguable case that most tax systems are geared towards people in working age overpaying to compensate for the cost of caring for children and the elderly.
Someone who comes temporarily during working age without a discount will get the downside without the benefit.
This will be a bigger problem for the competitive ability in places with comprehensive social support mechanisms.
Given dropping birth rates, trying to offset that to be an attractive place to immigrate to may well be worth it even if most leave again - especially as long as it's profitable too.
But if your concern is that it doesn't attract people who will stay, maybe there are ways to incentivise that too. E.g. let people earn a discount where a portion does not pay out unless they stay longer.
Now, if they stay permanently, you will have to pay their pensions and healthcare, which are very expensive.
That is one possibility.
Another is that the foreigner may have got the job instead of it going to a local. It's also possible that as a result of that the local may be unemployed and hence costing the country money.
That means they are spending a lot of money they earn on the local economy itself no? So even if their taxes are higher, if they are creating value in the economy, the locals do end up seeing those benefits imo.
From the perspective of a someone in country that loses a lot of talented/educated citizens to brain drain, If i were in charge of a country to which high skilled immigrants flock to - even if it is for a limited time, I'd try to see what I can do to convert them to permanent residents. It is a tricky thing to balance because the locals shouldn't feel like second class citizens in their own lands. But at the same time, if skilled people are migrating away - that's a lot of missed potential/opportunity.
Besides money directly transferred to wealth land owners via rents, some service owners, the rest goes back to savings to be spend after leaving the country. How are most netherlanders actually benefiting here?
