4 ms·
I don't like some EU taxation rules, e.g. the minimum 15% VAT, which effectively sets an upper bound on government efficiency, but this has nothing to do with t
by avar 9y ago
I don't like some EU taxation rules, e.g. the minimum 15% VAT, which effectively
sets an upper bound on government efficiency, but this has nothing to
do with that.
Ireland is not being penalized for having taxes that are too low, but,
in the words of the EC[1]:
> Ireland granted undue tax benefits of up to
> €13 billion to Apple. This is illegal under
> EU state aid rules, because it allowed Apple
> to pay substantially less tax than other
> businesses. Ireland must now recover the
> illegal aid.
You can elect to have low taxes in the EU, but it's anti-competitive behavior for a government in the EU to give preferential treatment to some companies over others.
Ireland is perfectly within their rights to have Apple pay the same taxes they've been paying already going forward. But to do so they need to adjust the general corporate tax rate, not just give Apple specifically those illegal benefits.
1. http://europa.eu/rapid/press-release_IP-16-2923_en.htm http://europa.eu/rapid/press-release_IP-16-2923_en.htm
- dilap 9y agoAh, I didn't pick up on that distinction. Thank you.
- eitally 9y agoIt's interesting that this is true, because (at the state level, not federal) this is table stakes to lure large corporations to locate in one state over another. Just look at some of the pitches cities/states have been making to Amazon for their HQ2, or the Foxconn deal in Wisconsin. https://www.jsonline.com/story/news/politics/2018/02/05/foxconn-package-cost-wisconsin-eight-times-much-per-job-similar-2017-state-jobs-deals/1080214001/ https://www.jsonline.com/story/news/politics/2018/02/05/foxc...
- throwaway2048 9y agoThis is very negative behaviour in sum, because it becomes a race to the bottom where you either forgo all tax revenue, or you dont attract large companies. Its good the EU has rules in place to prevent this destructive behaviour.
- AnthonyMouse 9y ago> This is very negative behaviour in sum, because it becomes a race to the bottom where you either forgo all tax revenue, or you dont attract large companies. It's not just that. The race to the bottom isn't really a thing because companies cost states money. They require the state to increase the resources they spend on transit capacity and emergency services etc. The only reason states want companies is because the amount of taxes they pay exceeds the amount of expenditures they require. So there is no race to have zero taxes, the competition is only to tax companies no more than the amount of government services they consume. Which isn't especially problematic. The real problem is that if states make special rules for large companies, it gives them an advantage over smaller companies, which destroys local businesses in favor of international ones. Then next year some other place gives the huge company a better deal and the city is devastated because the company displaced a huge chunk of the local economy and now they're leaving and taking it with them. If states want to compete by having low taxes, great. But nobody should be getting special treatment like that.
- macspoofing 9y agoI don't see the negative outcome. Cities know the economic activity of 50,000 highly paid workers makes up for the loss of some property tax revenue. The alternative is no highly paid jobs and no property tax revenue (as the land is undeveloped).
- Oletros 9y agoThen give the same opportunities to all the companies not only to some