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I agree with you in general but there is another thing you're missing: the double taxation discourages investing in new businesses in the United States. If a V
by pzone 11y ago
I agree with you in general but there is another thing you're missing: the double taxation discourages investing in new businesses in the United States.
If a VC is looking at two very similar businesses selling internationally, with one seated in the US where their profits will be doubly taxed, and the other running in a different country where profits are not subject to this, then ceteris paribus, they should expect investment in the non-US company to be more profitable.
- throwawayukcyb 11y agoceteris paribus i.e. unicorns and rainbows. You're essentially just responding to every response to your posts with "yeah but more assumptions make it true!"
- pzone 11y agoNo, it's not unicorns and rainbows. My argument does not rely on the existence of such ceteris paribus firms, my argument is that this will affect decisions to invest on the margin. Maybe right now, the margin is deciding between a great company in the US versus a crap company in Ireland, but the one in Ireland looks more attractive due to tax reasons. This policy change would push it back in the right direction. The point is that because there is a margin somewhere, it must be shifted by these policy decisions. I don't see myself relying on strong assumptions. I am laying out some simplified models to explain the core mechanisms of what's going on.