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OPEC is a cartel and has been running for 60 years, that would be a fairly good run for a global agreement. But I think you misclassify this from a game theory
by riffraff 5y ago
OPEC is a cartel and has been running for 60 years, that would be a fairly good run for a global agreement.
But I think you misclassify this from a game theory point of view. Larger countries with higher tax rates can effectively punish companies that take advantage of the other ones if the cartel is broken.
This is the same reason the agreement was reached in the first place, it's "give up a little or we'll fight and you'll lose", much like it was for bank secrets in Switzerland.
- AdrianB1 5y agoOPEC is a very good deal for the countries that are members; this deal is a very bad deal for most of the countries that are part of.
- Dracophoenix 5y agoSwitzerland's bank secrecy lost not because of a tax cartel but because FATCA was signed to allow the United States to unconstitutionally give itself universal jurisdiction over bank accounts held by American customers. It was a "my way or high way" power play by the Obama administration coupled with a punishing increase of citizenship renunciation fees from 0 to the highest in the world at nearly $2.5k.
- riffraff 5y agothat is exactly what I wrote: Switzerland was bullied into doing it, and so will be small for low-tax countries. This is not a prisoner's dilemma, since the players have different strengths.