2 ms·

The federal government steps in and collects taxes from the corporations directly instead, right?

• UncleEntity 9y ago
  Ah, ok, that explains all the squabbling -- the countries collect the taxes and then pay into the EU superstate. One country doesn't want another to have a comparative advantage so they sue each other in the EU courts to force them to collect "their fair share" from the evil tax-dodging corporations. Theater of the absurd if you ask me but who am I to judge...
  • cc81 9y ago
    To get access to the huge US market a corporation must pay federal tax. A huge Chinese corporation is not able to to tell the states that if someone lets them avoid federal tax then the US headquarters will be built in their state. This is advantageous for all states. The EU does not have something like that but they are able to say that while members can set their own tax code they cannot give preferential treatment to specific companies partly to avoid the scenario above. This forces them at least to pay the correct taxes in the little country they set up in in order to get access to the large countries.