3 ms·
>>If you tax revenue instead of profit, you push low-margin industries (the ones that are operating the most efficiently/ competitively) out of your country. It
by bluecalm 9y ago
>>If you tax revenue instead of profit, you push low-margin industries (the ones that are operating the most efficiently/ competitively) out of your country. It is a very silly thing to do.
They will raise prices, what's the problem? Importer will still pay the tax on revenue so there won't be at any advantage for being located elsewhere.
Taxing on profit on the other hand... licensing fees, expensive company cars, "consulting" fees. There is now way to police what is and what isn't a justified expense. We need a way to tax in more fair way to encourage efficiency. Taxing on revenue is one such idea.
- xyzzyz 9y ago> Importer will still pay the tax on revenue so there won't be at any advantage for being located elsewhere. Labor costs are not equal everywhere, and other regulations also might make it an advantage to be located elsewhere, for example environmental regulations might make your process more expensive.
- bluecalm 9y agoYes, but that's the case with any other tax. If labor costs are lower somewhere else maybe it's just more efficient to manufacture it there. If you tax on profit or revenue doesn't matter here. If you want to prevent manufacturing in countries with less environmental regulation and cheap labor then you need tariffs. Trump is a fan of it but it's not exactly a popular idea among the tech crowd.