Sunday, June 03, 2007
BRAIN-DRAIN AS GERMANY'S HOME-GROWING INDUSTRY
Here's a short article on how 'brain-drain' has hit the highest level since 1940s in Germany. The record level parallels with Germany's high fiscal burden causing disincentives to work, save and invest, pushing hundreds of highly-skilled workers into tax-friendlier destinations such as Switzerland, the United States and Austria. The most obvious consequence of intense brain-drain is the loss of the foundation which fuels long-term economic growth and global competitiveness. Previously, Germany faced a significant inflow of mostly unskilled foreign labor which transformed into structural crisis as generous welfare state hampered tax base by increasing marginal rates on individual income. Also, Germany has an onerous 39 percent corporate income tax.