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If a small country can afford a 0% tax, why shouldn’t they avail themselves to that competitive advantage? Unified tax rates amount to a tariff on more fiscally
by briandear 8y ago
If a small country can afford a 0% tax, why shouldn’t they avail themselves to that competitive advantage? Unified tax rates amount to a tariff on more fiscally competitive countries.
- makapuf 8y agoThey would have the right to do so. And other country might have the right to place a 150% tariff on this country goods. Or place those on the tax haven list. Other countries cannot stop them from applying a zero tax. But those same countries that provide all the markets, infrastructure, schools, manufacturing and support all the population to make it work can also choose not to trade with those.
- BartBoch 8y agoIt would be fair, but the EU prohibits it. So the company creates fake expenses in tax-flexible countries to avoid paying taxes in the country, where they generate revenue. That's the issue.
- stale2002 8y ago> can also choose not to trade with those. No, the EU and other trade agreements prohibit this.
- anoncake 8y agoThe very post you replied to answers your question: You get a race to the bottom. Competition pushes taxes lower than they would be if the democratic government of each country could set them freely as they believe is fair.
- sbacic 8y agoI don't think there's a single government that sets taxes based on fairness. Rather, I'd wager that most governments set taxes as high as they can without suffering consequences such as economic slowdowns or capital flight.
- anoncake 8y agoA democratic government does what its citizens want it to do. Presumably they want taxes to be fair. If setting taxes to a fair level would cause capital flight, then something's wrong about our economic system.
- sbacic 8y ago> A democratic government does what its citizens want it to do. Presumably they want taxes to be fair. Both of these statements are based on very big presumptions indeed.