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Sounds good. It forces all countries to unify VAT. It begs the question why it does not happen already?

by qznc 9y ago

ben_w 9y ago
It forces them to unify everything except VAT (and land tax). Or, and I only realised this just now, do something complicated with imports, customs, and how to handle cross-border sales of digital goods (the EU does this, but it is a mess). If I had to guess, I’d suggest haven’t already done what you suggest for at least one of these reasons: 1) because it’s economic mutually assured destruction 2) because tax codes are long and complicated (and sometimes deliberately written as political favours), and they’re as afraid of touching it as PayPal are of touching whatever Musk wrote 20 years ago. 3) because businesses that have revenue (Apple, $229bn) comparable to the GDP of the nations whose tax systems they are exploiting (Ireland, $293bn; Luxembourg, $59bn) is novel and governments are slow to adapt.
- libertyEQ 9y ago
  I don't know for sure, but is it appropriate to use gross GDP numbers instead of GDP/capita? When one is choosing which metrics to use, bias is introduced.
  - ben_w 9y ago
    Depends what you’re comparing. Gross economic force of two entities? Raw GDP; Quality of life? GDP-PPP/capita is better. Private citizens don’t generally get to threaten governments by moving abroad to withold their taxes — and even when they do (I kinda am!) it’s so completely irrelevant it isn’t worth the government’s time to bother to check if it’s actually happening or just a loudmouth blowing off steam by saying they will.
simonh 9y ago
To an extent it already has in the EU in which every country is required to impose a VAT compliant with EU rules, although they have some leeway on the rates and goods covered. On the other hand, there are countries out there that do very well out of having tax codes that wouldn't work for big industrialized countries, or countries part of a big unified trading bloc. They have strong incentives to keep their tax codes the way they are.

Sounds good. It forces all countries to unify VAT. It begs the question why it does not happen already?

by qznc 9y ago

Sounds good. It forces all countries to unify VAT. It begs the question why it does not happen already?

It forces them to unify everything except VAT (and land tax). Or, and I only realised this just now, do something complicated with imports, customs, and how to handle cross-border sales of digital goods (the EU does this, but it is a mess). If I had to guess, I’d suggest haven’t already done what you suggest for at least one of these reasons: 1) because it’s economic mutually assured destruction 2) because tax codes are long and complicated (and sometimes deliberately written as political favours), and they’re as afraid of touching it as PayPal are of touching whatever Musk wrote 20 years ago. 3) because businesses that have revenue (Apple, $229bn) comparable to the GDP of the nations whose tax systems they are exploiting (Ireland, $293bn; Luxembourg, $59bn) is novel and governments are slow to adapt.

libertyEQ 9y ago
I don't know for sure, but is it appropriate to use gross GDP numbers instead of GDP/capita? When one is choosing which metrics to use, bias is introduced.
- ben_w 9y ago
  Depends what you’re comparing. Gross economic force of two entities? Raw GDP; Quality of life? GDP-PPP/capita is better. Private citizens don’t generally get to threaten governments by moving abroad to withold their taxes — and even when they do (I kinda am!) it’s so completely irrelevant it isn’t worth the government’s time to bother to check if it’s actually happening or just a loudmouth blowing off steam by saying they will.

simonh 9y ago

To an extent it already has in the EU in which every country is required to impose a VAT compliant with EU rules, although they have some leeway on the rates and goods covered. On the other hand, there are countries out there that do very well out of having tax codes that wouldn't work for big industrialized countries, or countries part of a big unified trading bloc. They have strong incentives to keep their tax codes the way they are.