3 ms·

> Then it becomes a race to the bottom indeed. The article used that wording, "a classic risk of a race to the bottom", but it doesn't feel entirely accurate t

> Then it becomes a race to the bottom indeed. The article used that wording, "a classic risk of a race to the bottom", but it doesn't feel entirely accurate to me. A classic example of a race to the bottom is when jurisdictions compete to attract businesses by lowering their corporation tax rates and regulations. The end result would be zero taxes and zero regulations (unless a country offered a negative tax rate or other incentives). For censorship, though, I don't see there being a "race" between countries. Just because Austria bans defamation doesn't mean that all other countries will try to out-compete Austria by banning something even less objectionable. What would "the bottom" even be in this "race"? Banning all speech from the internet? Internet companies would simply avoid having any assets or presence in any country that tried that. Perhaps a better analogy would be "opening the flood gates" or "a chain is only as strong as its weakest link", suggesting that the strictest set of rules would be the one that ended up being implemented.

lopmotr 6y ago
Is a tax or regulation incentive race to the bottom really a bad thing? The residents of those jurisdictions that end up without much tax income and the externalities of the lax regulations so they would suffer and pressure their government to increase the tax and make the regulations stricter. Eventually, it should reach an equilibrium where those things are "fair" as determined by all the participants in the market. Jurisdictions would also have the ability to tax or ban imports from places they don't like. Maybe this is too much of a libertarian view? It seems to be the default state of the world though. What are the alternatives besides something oppressive like using military power to prevent other countries from taxing their citizens too little? Did Washington residents really prefer not to have Boeing at all rather than the tax-incentivized Boing they got? Wasn't it up to them in how they voted? Sometimes they do reject it, like how New York rejected Amazon.
- nikitaga 6y ago
  > What are the alternatives besides something oppressive like using military power to prevent other countries from taxing their citizens too little? Dropping the dogma of free trade and free flow of capital, and taxing any transactions involving tax havens to the point where it's not profitable to use them for tax avoidance. You can only have countries' tax systems and regulations competing in global "free market" of jurisdictions if the countries are actually free to set arbitrary tax rates and tariffs.
  - lopmotr 6y ago
    I agree. If the US doesn't like tax havens, then the US can tax the local operations of companies that are incorporated there. No need for any hand wringing. Or maybe the US does like tax havens because they kind of keep the actual operations and money in the US which helps the economy despite a lack of tax.

lopmotr 6y ago

Is a tax or regulation incentive race to the bottom really a bad thing? The residents of those jurisdictions that end up without much tax income and the externalities of the lax regulations so they would suffer and pressure their government to increase the tax and make the regulations stricter. Eventually, it should reach an equilibrium where those things are "fair" as determined by all the participants in the market. Jurisdictions would also have the ability to tax or ban imports from places they don't like. Maybe this is too much of a libertarian view? It seems to be the default state of the world though. What are the alternatives besides something oppressive like using military power to prevent other countries from taxing their citizens too little? Did Washington residents really prefer not to have Boeing at all rather than the tax-incentivized Boing they got? Wasn't it up to them in how they voted? Sometimes they do reject it, like how New York rejected Amazon.

nikitaga 6y ago
> What are the alternatives besides something oppressive like using military power to prevent other countries from taxing their citizens too little? Dropping the dogma of free trade and free flow of capital, and taxing any transactions involving tax havens to the point where it's not profitable to use them for tax avoidance. You can only have countries' tax systems and regulations competing in global "free market" of jurisdictions if the countries are actually free to set arbitrary tax rates and tariffs.
- lopmotr 6y ago
  I agree. If the US doesn't like tax havens, then the US can tax the local operations of companies that are incorporated there. No need for any hand wringing. Or maybe the US does like tax havens because they kind of keep the actual operations and money in the US which helps the economy despite a lack of tax.