3 ms·

having a uniform tax code would pretty much doom the small economies to not having opportunity to grown unless it was "granted to them" as a favor by the same u

having a uniform tax code would pretty much doom the small economies to not having opportunity to grown unless it was "granted to them" as a favor by the same union government. the ability of member states to set their own taxes is about the only protection they have handling down turns and getting new industry. their currency was given up and without the ability to print money they need other means to mitigate adverse changes to their economies. it is one reason Greece was trapped so long in their misery, bound up by EU laws and stuck with a currency they had no control over. In the US it works by forcing states to compete on regulation and taxes which benefits everyone. because onerous taxation on one group will certainly follow with others because once that line is crossed it becomes to easy to keep doing so. Indirect taxes are a politicians best friend because you have ready bogeymen and no apparent affect on the public though in reality they are paying the end result

lambdadmitry 8y ago
I'm not sure that blaming Greece problems on the EU instead of unsustainable social policies and populist and/or corrupt politicians is fair. After all, a populist with more knobs to their country's economy is still a populist and, if anything, will bury the country's economy even faster.
- spacecity1971 8y ago
  Spoken like a true German. Read Varoufakis Adults in the Room, and then maybe you'll be less likely to parrot banking sector propaganda.
simias 8y ago
I agree that "uniform" wasn't the right word, I was thinking more about cooperating and managing taxes as a whole (in order to find a compromise that would benefit everybody). It doesn't mean that everybody would have the same taxes but at least there would be some level of coherency. >In the US it works by forcing states to compete on regulation and taxes which benefits everyone. Everyone except the environment at least, it's often the first regulation to go. This kind of competition gives an edge to rich people and big companies who can afford to relocate if they dislike the way they're taxed or regulated somewhere, meanwhile low-skilled workers and small companies can't generally move a thousand of km away on a whim. In Europe this is even worse because we have cultural and language barriers. Even for an educated worker moving from London to Berlin to Paris to Prague is not a simple thing at all. The only ones who benefit from this infighting are large companies and rich people who can more easily relocate their income in order to get the best deal possible. See the whole Amazon HQ2 thing for an example of that in the US, you end up with a huge company getting great benefits that no small player could ever dream of. How is that fair and how does that benefit everyone? How does tech giants moving to Ireland to pay less taxes benefit everyone? It benefits Ireland arguably, but overall the EU gets less money than we otherwise would. I mean just for the sake of the argument we could imagine that the EU as a whole would agree to tax these tech giants a certain amount, bigger than what Ireland makes them pay now. Then we give the Irish exactly the same amount they're currently receiving and we redistribute the rest within the EU. Wouldn't we be objectively better off in this scenario? Now of course that would be a weird arrangement but you see my point, the real winners here are Google and Facebook, not Ireland, Germany or Poland.
- woodpanel 8y ago
  > Then we give the Irish exactly the same amount they're currently receiving Please don't take this the wrong way but: There's a whole body of tax-literature and tax-philosophy that renders such a statement naive. How do you figure e.g., how the current money Ireland makes is linked to the increase or decrease of tax-rates? How is it linked to other factors making Ireland worthwhile to invest? How much was Ireland accumulating on those other factors, because it has been a tech tax haven so long? How much future growth of these factors is taken from Ireland because of your proposed regime? And how do you deal with a decrease in overall EU tech tax income (per country) because of your proposed regime? Would you e.g. go so far as to pay Ireland its current income even if the overall EU tech tax income would be lower? Would you otherwise grow Ireland's pay with an increased overall EU tech tax income, beyond Ireland's current income, and if so what would be Ireland's fair share? And while those questions can have multiple correct answers, those questions have to be answered in a consistent way, because rule of law. And that consistency alone is often enough a problem, because other countries have other consistencies their taxing has to apply to, again because rule of law. And those laws are usually not just paper, but codifications of hundreds of years of cultural norms and customs.
  - simias 8y ago
    I acknowledge that my thought experiment was very simplistic and ignores many factors but my point was that I can't really imagine how we'd end up worse off negotiating as a whole union instead of competing with each other internally and trying to undercut your partners at any occasion. I mean, that's the whole principle behind unions (as in syndicate of workers for instance), as a whole you have more bargaining power, as individuals you're as weak as your weakest link (whoever is willing to concede the biggest tax breaks, cut down on environmental regulations etc...). I mean the EU, the free market, the euro, all that doesn't have "hundreds of years of cultural norms and customs" behind it. Why couldn't we go further? The only thing that we've had consistently over hundreds (or even thousand) of years in Europe is warfare and royal inbreeding. If we could avoid having to invade Ireland or having our finance ministers wed each-other in order to settle this tax dispute I think it would be grand.

lambdadmitry 8y ago

I'm not sure that blaming Greece problems on the EU instead of unsustainable social policies and populist and/or corrupt politicians is fair. After all, a populist with more knobs to their country's economy is still a populist and, if anything, will bury the country's economy even faster.

spacecity1971 8y ago
Spoken like a true German. Read Varoufakis Adults in the Room, and then maybe you'll be less likely to parrot banking sector propaganda.

simias 8y ago

I agree that "uniform" wasn't the right word, I was thinking more about cooperating and managing taxes as a whole (in order to find a compromise that would benefit everybody). It doesn't mean that everybody would have the same taxes but at least there would be some level of coherency. >In the US it works by forcing states to compete on regulation and taxes which benefits everyone. Everyone except the environment at least, it's often the first regulation to go. This kind of competition gives an edge to rich people and big companies who can afford to relocate if they dislike the way they're taxed or regulated somewhere, meanwhile low-skilled workers and small companies can't generally move a thousand of km away on a whim. In Europe this is even worse because we have cultural and language barriers. Even for an educated worker moving from London to Berlin to Paris to Prague is not a simple thing at all. The only ones who benefit from this infighting are large companies and rich people who can more easily relocate their income in order to get the best deal possible. See the whole Amazon HQ2 thing for an example of that in the US, you end up with a huge company getting great benefits that no small player could ever dream of. How is that fair and how does that benefit everyone? How does tech giants moving to Ireland to pay less taxes benefit everyone? It benefits Ireland arguably, but overall the EU gets less money than we otherwise would. I mean just for the sake of the argument we could imagine that the EU as a whole would agree to tax these tech giants a certain amount, bigger than what Ireland makes them pay now. Then we give the Irish exactly the same amount they're currently receiving and we redistribute the rest within the EU. Wouldn't we be objectively better off in this scenario? Now of course that would be a weird arrangement but you see my point, the real winners here are Google and Facebook, not Ireland, Germany or Poland.

woodpanel 8y ago
> Then we give the Irish exactly the same amount they're currently receiving Please don't take this the wrong way but: There's a whole body of tax-literature and tax-philosophy that renders such a statement naive. How do you figure e.g., how the current money Ireland makes is linked to the increase or decrease of tax-rates? How is it linked to other factors making Ireland worthwhile to invest? How much was Ireland accumulating on those other factors, because it has been a tech tax haven so long? How much future growth of these factors is taken from Ireland because of your proposed regime? And how do you deal with a decrease in overall EU tech tax income (per country) because of your proposed regime? Would you e.g. go so far as to pay Ireland its current income even if the overall EU tech tax income would be lower? Would you otherwise grow Ireland's pay with an increased overall EU tech tax income, beyond Ireland's current income, and if so what would be Ireland's fair share? And while those questions can have multiple correct answers, those questions have to be answered in a consistent way, because rule of law. And that consistency alone is often enough a problem, because other countries have other consistencies their taxing has to apply to, again because rule of law. And those laws are usually not just paper, but codifications of hundreds of years of cultural norms and customs.
- simias 8y ago
  I acknowledge that my thought experiment was very simplistic and ignores many factors but my point was that I can't really imagine how we'd end up worse off negotiating as a whole union instead of competing with each other internally and trying to undercut your partners at any occasion. I mean, that's the whole principle behind unions (as in syndicate of workers for instance), as a whole you have more bargaining power, as individuals you're as weak as your weakest link (whoever is willing to concede the biggest tax breaks, cut down on environmental regulations etc...). I mean the EU, the free market, the euro, all that doesn't have "hundreds of years of cultural norms and customs" behind it. Why couldn't we go further? The only thing that we've had consistently over hundreds (or even thousand) of years in Europe is warfare and royal inbreeding. If we could avoid having to invade Ireland or having our finance ministers wed each-other in order to settle this tax dispute I think it would be grand.