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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 a
by 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.