4 ms·

What you are describing are Trump's steel tariffs, which indeed make no sense and do exactly what you say. I believe what the EU has realised, is, that trying

What you are describing are Trump's steel tariffs, which indeed make no sense and do exactly what you say. I believe what the EU has realised, is, that trying to tax the profits of corporations that will simply move them around and declare them wherever they don't have to pay taxes on them, is a game of cat and mouse the EU can't win. So, they decided to go a different route. When Google decided they could negotiate the tax they had to pay in the UK with George Osborne, the public outcry was massive (think: "Why can't I get an appointment with HMRC to negotiate what I owe in taxes?"). The EU needs to show that the social contract is non-negotiable, lest it face further disenfranchisement of the populace. This is a good first step in the right direction, in my opinion. Whether it's tech companies, or any other big industrial conglomerate, tax avoidance is not acceptable.

wtfstatists 9y ago
> The EU needs to show that the social contract is non-negotiable, By raising new consumption tax ? Its not going to work. Thats not how you fund socialism lol.
- throwaway77384 9y ago
  Apologies, I may not have been clear enough in my formulation there. I meant the social contract, as in: You pay taxes and get something in return. For some people it may also be something like 'you work hard and therefore get to live a reasonably comfortable life'. The social contract, for me, is simply about making sure everyone plays by the same rules. Socialism is a completely different topic. I wouldn't even know how to define it, considering how many wildly different definitions of it there are. I think the regulated markets, like Germany and Scandinavian countries have a nice model, but even the crazy American model would be fine, if the rules were the same for everyone. Again, I was not talking about socialism or how to fund it. By the way, you mentioned that this consumption tax is not how you fund socialism. How do you fund socialism? I'd be very interested to hear your perspective :)
deleted 9y ago
[deleted]
adventured 9y ago
> What you are describing are Trump's steel tariffs, which indeed make no sense and do exactly what you say. That's exactly what I'm describing. The US can't compete with low cost producers on steel, so it is seeking to raise barriers to competition. Although I will point out there's at least one target for steel tariffs that would be very beneficial: Russia. The US imports four times as much steel from Russia as it does from China, and nearly as much as it does from Mexico. I'd much rather see those imports go to Canada and Mexico. The US can freely shut down all trade with Russia to zero negative economic effect for the US. Russia imports a mere $7 billion worth of US goods, ie it's a meaningless export market for the US (while the US buys $17 billion worth of Russian goods, ~1.4% of their economy). Europe largely can't compete on technology with the US, failing for the last 10, 30, 50 years to build competitive companies and products of the scale that the US has. While the US has 40 or 50 large technology companies, the EU has a comparable four or five. So up the barriers go. I don't see how a 3% revenue tax is going to change the balance much though, they'll have to get a lot more draconian. This policy by the EU is an admission of dysfunction and failure of the EU system. They can't get their countries to implement what some consider proper tax policies individually, so they're going to attempt (and likely fail) to get a unanimous vote on this revenue tax. There are 20 countries in Europe with statutory corporate tax rates either just a bit above Google, near it, or below it. The effective rates are that much lower. Most of Europe is turning into a very low corporate tax haven. Except for a few nations, such as France, which has an infamously high corporate income tax rate. I can't imagine what the complaint is exactly given all of those low tax rates, other than that the spoils are overwhelmingly going to eg Ireland and other EU members with larger populations are jealous. I see this primarily as an attempt at wealth redistribution by Germany and France in their favor vs small lower tax EU nations. Ireland has a GDP per capita nearly twice that of France now, in part due to their low tax policies. It's obviously in France's interest to try to pry some of that away from them.

wtfstatists 9y ago

> The EU needs to show that the social contract is non-negotiable, By raising new consumption tax ? Its not going to work. Thats not how you fund socialism lol.

throwaway77384 9y ago
Apologies, I may not have been clear enough in my formulation there. I meant the social contract, as in: You pay taxes and get something in return. For some people it may also be something like 'you work hard and therefore get to live a reasonably comfortable life'. The social contract, for me, is simply about making sure everyone plays by the same rules. Socialism is a completely different topic. I wouldn't even know how to define it, considering how many wildly different definitions of it there are. I think the regulated markets, like Germany and Scandinavian countries have a nice model, but even the crazy American model would be fine, if the rules were the same for everyone. Again, I was not talking about socialism or how to fund it. By the way, you mentioned that this consumption tax is not how you fund socialism. How do you fund socialism? I'd be very interested to hear your perspective :)

deleted 9y ago

[deleted]

adventured 9y ago

> What you are describing are Trump's steel tariffs, which indeed make no sense and do exactly what you say. That's exactly what I'm describing. The US can't compete with low cost producers on steel, so it is seeking to raise barriers to competition. Although I will point out there's at least one target for steel tariffs that would be very beneficial: Russia. The US imports four times as much steel from Russia as it does from China, and nearly as much as it does from Mexico. I'd much rather see those imports go to Canada and Mexico. The US can freely shut down all trade with Russia to zero negative economic effect for the US. Russia imports a mere $7 billion worth of US goods, ie it's a meaningless export market for the US (while the US buys $17 billion worth of Russian goods, ~1.4% of their economy). Europe largely can't compete on technology with the US, failing for the last 10, 30, 50 years to build competitive companies and products of the scale that the US has. While the US has 40 or 50 large technology companies, the EU has a comparable four or five. So up the barriers go. I don't see how a 3% revenue tax is going to change the balance much though, they'll have to get a lot more draconian. This policy by the EU is an admission of dysfunction and failure of the EU system. They can't get their countries to implement what some consider proper tax policies individually, so they're going to attempt (and likely fail) to get a unanimous vote on this revenue tax. There are 20 countries in Europe with statutory corporate tax rates either just a bit above Google, near it, or below it. The effective rates are that much lower. Most of Europe is turning into a very low corporate tax haven. Except for a few nations, such as France, which has an infamously high corporate income tax rate. I can't imagine what the complaint is exactly given all of those low tax rates, other than that the spoils are overwhelmingly going to eg Ireland and other EU members with larger populations are jealous. I see this primarily as an attempt at wealth redistribution by Germany and France in their favor vs small lower tax EU nations. Ireland has a GDP per capita nearly twice that of France now, in part due to their low tax policies. It's obviously in France's interest to try to pry some of that away from them.