Taxes in US vs Spain

[Work in progress]

Top level, I want to compare couple of countries (US vs Spain) which could be considered quite different from social policies, one often cited as extreme capitalism and the other more of socialist nature (who likes to talk about "el estado del bienestar"). I am not an economist or have experience creating a company so I may miss stuff, but let me give it a try. We would like to learn:

1. If you make a given salary, how much you get to keep, depending on the place.
2. And related, what do you get for what you pay on your taxes. Or a bit on the flip side. If you have certain needs in life you have to pay for and the rest of the money you get to keep to enjoy, where is better (assuming you were making the same, which obviously may not be the case).
3. If you are a company, where is cheaper to hire someone. This is more from the perspective of where would you like to invest. Of course, there are other factors, like how easy is to pull out if things go bad (like the cost of laying off people, etc) or what are the corporate taxes...

So, with we dig in both countries and try to make a comparison, which obviously may not be easy. This will be even more difficult if we try to cover a broad spectrum (low and high income, etc). So, we may just want to pick an example. 

I'll put here the summary table once I get it all. For the time being few posts getting the background info:

1. How much is to hire someone in Spain?
2. Income tax brackets in Spain
3. Income tax brackets in US
4. Paying taxes in Spain (II): taxes on your wealth.

Cheers!

Paying taxes in Spain (II)

To continue with the tax topic comparison across places we look at couple more taxes that you may want to be careful with as are not standard across countries but can add up. For this, we look again at Spain, which looks like is going a bit nuts with the taxes (specially when you add all other ones, I need to do a summary comparison):

• Wealth tax (Impuesto del Patrimonio), i.e., tax not only the income but also the overall wealth (even after one already paid taxes on). If you live in the country, all your wealth across the world is included. If you are not resident, then only the wealth in Spain is counted. (Check retirement plans as you may be able to exclude those, like 401k). This is actually not only for high wealth individuals and it applies on anything beyond ~$500k for any resident of Spain (spends there more than 183 every year). On top of that, it is not homogeneous across communities... Here is a breakdown for communities. To see the difference, having 4M Euros would cost you 0 in Madrid but ~40k in Catalonia. Note: this is currently (as of 2018) a temporary tax that is extended yearly by the government. One day they may not but I wouldn't count on it for many years plus there is always the risk of being brought back (it has been extended yearly for already 7 years or so...). For instance, as mentioned, on Madrid is zero, but it is almost a given that a change on local government (from right to left) would immediately increase this. 
• The way to compute it in Catalonia is:
• Add all your wealth
• Subtract up to E300k for the value of your permanent residence
• Subtract E500k (exemption rule). In other parts of Spain is E700k but in Catalonia...
• Apply the following table:
  
• So, for instance, say you got E2M and live in a E200k place. The "Base Imponible" is 1.8M, but in Catalonia the first 500k are exempt, and as such, the "Base liquidable" is 1.3M. Looking at the table above, the first 668449.75 pay 2632.21 and the rest (1.3M - 668449.75 = 631550.25) pay at 0.945% = 5968.15. Hence, you got to pay a total of E8600 that year.
• Important: there is a note saying that there is a cap on how much you pay on taxes in relation to your overall income "Exclusivamente para los sujetos pasivos sometidos al impuesto por obligación personal, la suma de la cuota íntegra del Impuesto sobre el Patrimonio conjuntamente con las cuotas del IRPF (cuota íntegra general y cuota íntegra del ahorro) no podrá exceder del 60 por 100 de la suma de las bases imponibles, general y del ahorro, del IRPF." Examples:
• Say that, following with the example above, you make 50k/yr and pay 10k on taxes on that money. 60% is 30k. As (E8600+E10k)<30k, you got to pay the E8600 for patrimonio (full amount).
• Say that you make only 10k and that falls below the tax line, so, no tax pay. 60% of 10k is 6k < 8600 so you are paying 2600 more than you should. So, you got to actually pay E6000. 
• There is actually a limit on how much you can deduct from that tax. For instance, say that you made zero Euros that year. Then you would be paying 8600 too much, but they don't allow you to avoid paying all those. You can only remove 80% of the 8600 = 6880E. I.e., you still have to pay E1720.
• There is also a tax on real state if you are not living on it and has no rental gains either (say that you keep the place there as second residence): https://www.strongabogados.com/impuestos-no-residentes.php That's actually my case (where I own a condo in Barcelona). Looks like I got to pay for the condo 24% of 1.1% of the value of the place (if it was reviewed in the last 10 years, which it was). The good part is that the official value of the place ("valor catastral") is usually not as much as the market value of the place. And yes, that includes the parking spot. (you got to file twice, one for the flat and one for the parking spot):
• Use form 210. Most of it is straightforward. Remember to pay only for the days that you were owner of the place. For instance, if you buy the place on March 23, then declare 284 days out of 365. For instance: 284*88749.24/365 = 69054. 
• To fill the form 210, follow these instructions. The form is in here (under "predeclaracion" as you fill that and then take it to the bank). It's filled on the browser and then generates a pdf to bring to the bank. You can actually export it and next year you just import it, change the dates and generate a new one. Also when you take it to the bank, you can print double sided. The bank will give you back one of the forms stamped for your records.
• For those who think that I could put it as AirB&B, actually you can't without a municipal license, which the city doesn't give anymore.
• Beckham Law: a bit of good news... this is a regime within the Spanish tax law for foreign hires, which applies for the first 5 years a similar tax structure to the non-residents: flat income tax at 24% (applies only to Spanish income) and excludes overseas wealth tax. In fact, you don't even have to submit the 720 (declaration of overseas wealth). See more here and here.

Overall I do believe that wealth unbalance is a bad thing. Unfortunately, these laws seem to be less about balancing wealth (given the relatively low limits they are applied to) and more about getting more money into the coffers of the government (which honestly, is extremely wasteful... that would be a different post). Certainly those individuals, specially those with no ties to Spain, may want to take this into account when looking for places to invest or to retire to.

Cheers!

PS.: US-Spain tax treaty explained

PS2.: If you are a Spain resident, don't forget to declare your goods outside the country with model 720.

Reforestando España - Proyecto Ardilla

According to some famous guy, or a legend... well, I don't know where I heard this, but someone said once that during the Roman empire a squirrel could cross Spain from North to South without touching the ground, from tree to tree.

Well, that was long ago, and now, unfortunately, he would have to walk most of the way... So, the other day the thought of all Spaniards getting together and making that possible crossed my mind. What a nice goal to unite people.

So, here I am starting to research that. Let's start by random thoughts:

1. Looks like actually some folks running for president had promised planting lots of trees... LOTS of them. 800M once!
2. In Spain there are 7G trees in 18.5M hectares (100x100sqm, 2.5 acres), from a total surface of 505k sqkm (50Mhectares). Not bad, actually.
3. How are we going to go over roads? I guess under a bridge or above a tunnel...
4. The Bonn Challenge
5. Reforesta.es
6. How much to plant a tree?
1. $0.1 to $1.4/tree depending of a lot of factors.
2. In your backyard, depends on the size, can go to thousands of dollars.
3. Cuanto cuesta reforestar una hectarea (Mejico) Un monton de informacion buena. They say about $4.5k. They say about 1k trees per hectare. And the price includes everything (including manpower, watering...) for the first year, but no yearly support.

These guys have a blog on los Monegros. A desert in Spain. One in the comments talks about reforesting it. It looks like this desert may have been direct consequence of human actions.
A nice article on the topic. And another one but about Cantabria and Burgos reforestation. Mentions $4k per hectare.

Other random links (while I get time to sort all this through):

• http://bosquihermanos.blogspot.com/2008/04/daos-del-eucalipto.html
• Rendimiento por hectarea
• Recognizing different types of trees

By the way, the link above is an excellent source of other data (like how much water is consumed, what is the cost, how much trash is generated, population, health system, expenses...)

Anyhow, posting this to at least put the idea out there...
Cheers!

PS.: for kickers, ardilla.blogspot.com is taken. And like that almost anything I looked for: reforestar, reforestando, squirrel, dearboles, even proyectoardilla... amazing.

Xiaomi Mi 9T

Want to buy this phone for my mom ($300!!). Specs look really good. Only weakness from my view (used to getting the best camera phone out there) is the camera... But she'll have plenty. Some useful links:

• To check for coverage in Spain
• Comparison across models: hence I think Mi 9T (the Mi 9T Pro is more for me). Got the battery life.
• YouTube review
• Check the Amazon FAQ

And for me: :)

• Xiaomi MI Note 10 (CC9 Pro) Premium Edition Camera (assuming is cheaper than the Huawei Mate 30 pro, which should be at $600 vs $1200!

Second runner up: OnePlus 7 Pro

Port mirroring - Netgear GS105E

It is interesting but as time goes by, products get better and it gets harder and harder to find simple/not perfect products. But sometimes, not perfect is what one needs to do the job. That is the case when you want to listen with a computer to the network traffic from a different computer.

Traditionally there used to be hubs, little boxes with, say, 4 ports, where whatever you connected to one port went to all other ports (basically like shorting the wires). Nevertheless, that was cluttering the network (no reason to send to a cable something that is not for that computer). Switches started to appear (and were much more expensive) where they would only route between ports those packets that were directed to whatever was hanging from that port. And with time, now, it is basically the only thing you can buy. To get a hub is really tough these days. One can check eBay or for instance this

So, I wanted to monitor the packets going in and out from one computer with a different one, but the ports on my wireless router were not passing the packets from the source computer port to the "spy" computer port (because obviously were not addressed to it). So, given that hubs are hard to find, bought a Netgear GS105E which is a switch that has "port mirroring" function.

Note: careful, a splitter (like this one) will not work either.

Exchange rates on buying stuff

My friend told me that when you buy something in a foreign place with your card, and the machine offers you to pay on the local currency or on your currency, you should choose the LOCAL one. Basically when you do that, your card is the one doing the exchange, while if you choose your currency, they do the exchange and you pay that on your currency. Their exchange is likely to be worse than your card's exchange.

So, I just tested this. I purchased a flight ticket on Cathay's website and the default was HKD. The total was 2638 HKD. They give you the option to pay with USD, but when I selected that it said 348 USD. Google exchange rate was giving actually 338 USD. So, I did what my friend suggested and picked HKD. Later checking my credit card bill, sure enough, I had actually paid 338 USD! :)

Great!

GTI mkV cargo trunk liner mat

Stupid oil spill on my mat made it very messy...
Trying to clean it but if I need to buy something to replace it, the original is almost $200!?! You can also get them use for $100... These may not be bad alternatives for about $30 (are soft though so gotta put something underneath):

• https://www.aliexpress.com/i/32812361687.html?spm=2114.12057483.0.0.39805f2axLx7yA
• https://www.aliexpress.com/i/32812325782.html
• eBay
• $61

In the junk yard didn't find any :(

1. https://www.picknpull.com/check_inventory.aspx?Zip=75243&Make=242&Model=4454&Year=&Distance=100
2. https://www.twinlakesautosalvage.com/recycled-parts

Any of these would work:

Volkswagen VW Golf 5 6 MK5 MK6 Golf GTI R R32 Rabbit 2004-2014 

"Looking for a trunk liner for a VW GTI mk5 2007. If you got any Volkswagen Golf or GTI or Rabbit or R32, from the years 2004-2014 will work."