4 ms·

Wouldn't #1 result in a race to the bottom? Why wouldn't a foreign country use tax policy to lower their corp rates towards zero in order to attract foreign tax

Wouldn't #1 result in a race to the bottom? Why wouldn't a foreign country use tax policy to lower their corp rates towards zero in order to attract foreign tax revenue? After all, some tax is better than no tax.

revelation 10y ago
Well, they do that, the trick is doing it in a foreign country that has access to a market that matters. Sure you get zero tax on some island state but what good is that if you then pay prohibitive taxes to buy/sell something to the EU because it becomes foreign trade, for example. So they use Ireland, where they can get a special deal: http://www.wsj.com/articles/eu-may-decide-on-apple-tax-probe-in-july-1466087469 http://www.wsj.com/articles/eu-may-decide-on-apple-tax-probe...
refurb 10y ago
You'd end up with a country like Singapore, where the taxes are lower, but more wisely spent.
- karma_vaccum123 10y ago
  Singapore would be overrun by poorer neighbors in a week if not for the blue-water navies that other nations "waste" their money on
  - refurb 10y ago
    Most EU countries spend at most a few percent on defense, yet they have high taxes!
- kuschku 10y ago
  In Singapore it only works because of so little expenses. If Germany would, tomorrow, decide to not provide any services outside of the cities, we could save a lot more taxes, too – and reduce them even further. But there’s some running costs countries have, which you can’t go below. If you want public schools and universities for free that can rival US private elite unis, if you want first-class public transit everywhere, if you want a social net, you end up with high taxes around 25% corporate and 30% private. There’s not much of a way around that, except for going deeper and deeper into debt. Yet if you want a country with a minor tax surplus, and good services, you need high tax rates.
  - refurb 10y ago
    I would argue Singapore has a significant safety net, good schools and healthcare. Hell, most of the housing is gov't owned.
    - kuschku 10y ago
      Yes, but they don’t need to provide healthcare for people living 100km from the next city within of 20 minutes – they don’t have the extreme cost of suburban or rural areas. (which other nations might want to copy)

revelation 10y ago

Well, they do that, the trick is doing it in a foreign country that has access to a market that matters. Sure you get zero tax on some island state but what good is that if you then pay prohibitive taxes to buy/sell something to the EU because it becomes foreign trade, for example. So they use Ireland, where they can get a special deal: http://www.wsj.com/articles/eu-may-decide-on-apple-tax-probe-in-july-1466087469 http://www.wsj.com/articles/eu-may-decide-on-apple-tax-probe...

refurb 10y ago

You'd end up with a country like Singapore, where the taxes are lower, but more wisely spent.

karma_vaccum123 10y ago
Singapore would be overrun by poorer neighbors in a week if not for the blue-water navies that other nations "waste" their money on
- refurb 10y ago
  Most EU countries spend at most a few percent on defense, yet they have high taxes!
kuschku 10y ago
In Singapore it only works because of so little expenses. If Germany would, tomorrow, decide to not provide any services outside of the cities, we could save a lot more taxes, too – and reduce them even further. But there’s some running costs countries have, which you can’t go below. If you want public schools and universities for free that can rival US private elite unis, if you want first-class public transit everywhere, if you want a social net, you end up with high taxes around 25% corporate and 30% private. There’s not much of a way around that, except for going deeper and deeper into debt. Yet if you want a country with a minor tax surplus, and good services, you need high tax rates.
- refurb 10y ago
  I would argue Singapore has a significant safety net, good schools and healthcare. Hell, most of the housing is gov't owned.
  - kuschku 10y ago
    Yes, but they don’t need to provide healthcare for people living 100km from the next city within of 20 minutes – they don’t have the extreme cost of suburban or rural areas. (which other nations might want to copy)