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I have no problem if an area is trying to land a major contributor to the area in jobs and future revenues. Giving tax breaks to get such tend to pay back in th

I have no problem if an area is trying to land a major contributor to the area in jobs and future revenues. Giving tax breaks to get such tend to pay back in that you get support businesses cropping up to support the original beneficiary. These deals however just don't appear to provide any benefit to the areas affected, only to the companies. Is there a big pool of political contributions in countries like these? Do they have the equivalent of PACs and such?

the-dude 11y ago
Starbucks has a roastery in The Netherlands, so that means jobs at least.
- gizi 11y ago
  Modern business only hires profiles that are in short supply already. So, they went to The Netherlands to exacerbate the shortages of skilled labour while doing nothing for the insufficiently skilled unemployed ones. "Jobs" are never a valid motivation to do anything, because the ones who don't have them, will never have them.
  - xixi77 11y ago
    Does coffee roasting really require that high-skill labor?
- s73v3r 11y ago
  How many jobs? If you were to divide the amount of the tax break by the number of jobs, how much would the government have ended up paying per job?
IkmoIkmo 11y ago
> I have no problem if an area is trying to land a major contributor to the area in jobs and future revenues. Giving tax breaks to get such tend to pay back in that you get support businesses cropping up to support the original beneficiary. That's not really the issue. The issue is that these were tax deals done behind closed doors between government and businesses rather than the government creating a tax policy for all that is transparent and applied uniformly and fairly to all businesses, they created a tax policy for all except a handful of companies that could get private deals. And that usually leads to bad results after a while. Yes it makes sense to have tax policy that treats different businesses differently. And it makes sense for there to be some flexibility and to be able to negotiate on certain things in a transparent and fair manner (e.g. a business 'negotiating' over whether it applies for a sustainable energy tax benefit if it invests in a new green energy tech that happened to fall outside of the parameters of the sustainable energy programme the government created a few years ago when said tech didn't exist, there's some flexibility there to expand the programme for that particular company that makes sense. Such a negotiation fits with the aim of the tax programme, is transparent and will affect everyone equally who applies for it afterwards). But simply negotiating some special tax rate just for you that doesn't apply to anyone else, in a backroom deal that isn't officially known to anyone else, that's shady and corrupt, the kind of practices you expect from poor countries struggling with institutional development. How you actually spend the money (e.g. to improve the area affected) is another topic altogether. But in its first principle these tax deals made no sense.
- scrabble 11y ago
  Wouldn't special tax breaks for large multinationals make it more difficult for local business to compete?
  - xixi77 11y ago
    I suspect most of the time there are no major competing local businesses -- e.g. I don't see what Dutch businesses would directly lose from Starbucks moving their headquarters there; most likely, there will be gains in local supporting industries.
    - Nursie 11y ago
      >> I don't see what Dutch businesses would directly lose from Starbucks moving their headquarters there If there is a favourable tax agreement for Starbucks in the Netherlands as a result, then there is no longer a level playing field between Starbucks coffee shops and others.
justincormack 11y ago
All tax breaks are state aid, which is generally not allowed in the EU. As to why they do it, well they still get more tax than they would if the country wasnt there, even if it is very little. Probably some other benefits too.
willholloway 11y ago
These deals have to go. Much better to provide lower tax rates for all and attract business that way.
TeMPOraL 11y ago
The deals are only a half of the equation. The other half is that there are multiple countries competing for the same business to be located on their soil. Companies are incentivized to set up in a country willing to give the most concessions.

the-dude 11y ago

Starbucks has a roastery in The Netherlands, so that means jobs at least.

gizi 11y ago
Modern business only hires profiles that are in short supply already. So, they went to The Netherlands to exacerbate the shortages of skilled labour while doing nothing for the insufficiently skilled unemployed ones. "Jobs" are never a valid motivation to do anything, because the ones who don't have them, will never have them.
- xixi77 11y ago
  Does coffee roasting really require that high-skill labor?
s73v3r 11y ago
How many jobs? If you were to divide the amount of the tax break by the number of jobs, how much would the government have ended up paying per job?

IkmoIkmo 11y ago

> I have no problem if an area is trying to land a major contributor to the area in jobs and future revenues. Giving tax breaks to get such tend to pay back in that you get support businesses cropping up to support the original beneficiary. That's not really the issue. The issue is that these were tax deals done behind closed doors between government and businesses rather than the government creating a tax policy for all that is transparent and applied uniformly and fairly to all businesses, they created a tax policy for all except a handful of companies that could get private deals. And that usually leads to bad results after a while. Yes it makes sense to have tax policy that treats different businesses differently. And it makes sense for there to be some flexibility and to be able to negotiate on certain things in a transparent and fair manner (e.g. a business 'negotiating' over whether it applies for a sustainable energy tax benefit if it invests in a new green energy tech that happened to fall outside of the parameters of the sustainable energy programme the government created a few years ago when said tech didn't exist, there's some flexibility there to expand the programme for that particular company that makes sense. Such a negotiation fits with the aim of the tax programme, is transparent and will affect everyone equally who applies for it afterwards). But simply negotiating some special tax rate just for you that doesn't apply to anyone else, in a backroom deal that isn't officially known to anyone else, that's shady and corrupt, the kind of practices you expect from poor countries struggling with institutional development. How you actually spend the money (e.g. to improve the area affected) is another topic altogether. But in its first principle these tax deals made no sense.

scrabble 11y ago
Wouldn't special tax breaks for large multinationals make it more difficult for local business to compete?
- xixi77 11y ago
  I suspect most of the time there are no major competing local businesses -- e.g. I don't see what Dutch businesses would directly lose from Starbucks moving their headquarters there; most likely, there will be gains in local supporting industries.
  - Nursie 11y ago
    >> I don't see what Dutch businesses would directly lose from Starbucks moving their headquarters there If there is a favourable tax agreement for Starbucks in the Netherlands as a result, then there is no longer a level playing field between Starbucks coffee shops and others.

justincormack 11y ago

All tax breaks are state aid, which is generally not allowed in the EU. As to why they do it, well they still get more tax than they would if the country wasnt there, even if it is very little. Probably some other benefits too.

willholloway 11y ago

These deals have to go. Much better to provide lower tax rates for all and attract business that way.

TeMPOraL 11y ago

The deals are only a half of the equation. The other half is that there are multiple countries competing for the same business to be located on their soil. Companies are incentivized to set up in a country willing to give the most concessions.