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Nations can still compete. Stability, rule of law, infrastructure investment, etc. Everything except letting companies use the country as a pirate's cave

gruez 5y ago
>Nations can still compete. Stability, rule of law, infrastructure investment, etc. don't forget tax incentives. Sure, every country has to charge 15% tax, but if you domicile your country here we'll give you tax credits!
- asteroidbelt 5y ago
  That would be obvious loophole, I guess these agreements explicitly prohibit it.
- deleted 5y ago
  [deleted]
native_samples 5y ago
But there are limits to how much of those are beneficial to companies. It's not like doubling the amount of them will double the number of companies you have, there are limits to ROI there. As long as their employees can get to work in the morning, aren't feeling unsafe, the courts aren't corrupt and so on, the corporate need for rule of law is rather limited, and too much rule of law can easily turn into abusive lawsuits or stifling regulation that nails down whatever the status quo happens to be at the time. As for generic infrastructure, most companies need roads, but other infrastructure is often handled by the private sector e.g. airports, ports, telecoms. Realistically lots of countries can meet this minimum bar and it doesn't require high tax rates to do so. The countries that have lower corporate tax rates than this new attempt at a minimum standard do have working rule of law, stability and infrastructure. They aren't Somalia. So it's unclear how much scope countries have to compete in this area. On the other hand, efficiency provides scope for more or less unlimited competition. Minimum global tax rates are pretty directly an attempt to end competition on the axis that is both very important and also has most scope for improvement.
trompetenaccoun 5y ago
All these are a given in most developed countries. Corporations and funds aren't headquartered in Ireland for the great Irish infrastructure or because there is better rule of law there than in France. What many seem to be forgetting is the entire economical aspect of it. Economies are not all the same, some are stronger and some are weaker. Some are naturally attractive because of the talent pool, location, other businesses settled there, etc. Others aren't and might need to lower the tax rate to be able to compete. Adjusting the rate is an important economic tool for governments, losing this will cause some countries problems, the same way some countries in the Eurozone are now suffering serious consequences for giving up sovereignty over their currency and losing the ability to devalue it. A border adjustment tax theoretically avoids these problems and might be a much better choice for the smaller countries that aren't the US and don't dictate the rules.

gruez 5y ago

>Nations can still compete. Stability, rule of law, infrastructure investment, etc. don't forget tax incentives. Sure, every country has to charge 15% tax, but if you domicile your country here we'll give you tax credits!

asteroidbelt 5y ago
That would be obvious loophole, I guess these agreements explicitly prohibit it.
deleted 5y ago
[deleted]

native_samples 5y ago

But there are limits to how much of those are beneficial to companies. It's not like doubling the amount of them will double the number of companies you have, there are limits to ROI there. As long as their employees can get to work in the morning, aren't feeling unsafe, the courts aren't corrupt and so on, the corporate need for rule of law is rather limited, and too much rule of law can easily turn into abusive lawsuits or stifling regulation that nails down whatever the status quo happens to be at the time. As for generic infrastructure, most companies need roads, but other infrastructure is often handled by the private sector e.g. airports, ports, telecoms. Realistically lots of countries can meet this minimum bar and it doesn't require high tax rates to do so. The countries that have lower corporate tax rates than this new attempt at a minimum standard do have working rule of law, stability and infrastructure. They aren't Somalia. So it's unclear how much scope countries have to compete in this area. On the other hand, efficiency provides scope for more or less unlimited competition. Minimum global tax rates are pretty directly an attempt to end competition on the axis that is both very important and also has most scope for improvement.

trompetenaccoun 5y ago

All these are a given in most developed countries. Corporations and funds aren't headquartered in Ireland for the great Irish infrastructure or because there is better rule of law there than in France. What many seem to be forgetting is the entire economical aspect of it. Economies are not all the same, some are stronger and some are weaker. Some are naturally attractive because of the talent pool, location, other businesses settled there, etc. Others aren't and might need to lower the tax rate to be able to compete. Adjusting the rate is an important economic tool for governments, losing this will cause some countries problems, the same way some countries in the Eurozone are now suffering serious consequences for giving up sovereignty over their currency and losing the ability to devalue it. A border adjustment tax theoretically avoids these problems and might be a much better choice for the smaller countries that aren't the US and don't dictate the rules.