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Unless we want international trade to be a one-way process that slowly drains the middle class dry, and triggers the next recession when demand drops to zero, t
by m12k 6y ago
Unless we want international trade to be a one-way process that slowly drains the middle class dry, and triggers the next recession when demand drops to zero, then it is probably better to make sure that whenever a company makes money by selling to consumers, enough money is re-circulated back into that country to maintain the purchasing power of those consumers. (That seems to be a core part of China's strategy, protecting their inner market from outsiders, and they're doing pretty well economically compared to most of the world)
- joejerryronnie 6y agoThe devil is in the details though. I’m sure a US capitalist and a French government bureaucrat have very different ideas as to what constitutes “enough money”.
- m12k 6y agoIf we fixed profit shifting, then the French bureaucrat could set a tax rate, and the US capitalist would be free to choose whether they wanted their company to do business in France, and thus the market would eventually find some equilibrium for us. Right now it doesn't matter what the French corporate tax rate is, because multinationals don't have to pay it.
- nfsdjkghewyuh 6y agoEconomic is not my area of expertise, so I don't think I'm understanding. Are you talking about (1) something like a sales tax, where all companies that sell to, in this example, French consumers have to pay a tax based on those sales, (2) only if they have a corporate presence in France do they pay some portion of the profits made in France, or (3) something completely different and I'm 100% lost. If it's (2) wouldn't that just incentivize businesses to sell to France but not employ French people, and if it's (1) wouldn't corporations just offload the cost of that tax onto consumers so that good are just more expensive in France?
- heavenlyblue 6y agoI think that if you're not paying full taxes in my country, you should not receive any police/army/legal system support as a company (obviously while enforcing the low of companies not being allowed to be armed for different reasons). I would love to see how that turns out for corporations.