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The problem with all of this is that it's all sneaky schemes. You probably have something in mind for how a government is supposed to spend tax revenues. Assis

The problem with all of this is that it's all sneaky schemes. You probably have something in mind for how a government is supposed to spend tax revenues. Assistance for the poor or something like that. But as a sovereign state they get to decide for themselves. Except that as soon as you admit this there is no point in having any kind of minimum rate etc., because there are a thousand ways for the state to return the money to corporations if they intend to. Subsidize energy costs so they have the lowest electricity prices and tech companies build data centers there. Provide something like the earned income tax credit but with no phase out, subsidizing employers who hire workers there. Just offer generous tax credits and deductions in general, leaving the nominal rate high while lowering the effective rate. There is no real way to prevent this kind of thing. Is a country that offers public healthcare subsidizing employers who then don't have to pay for employee health insurance? What if you create a 100% tax credit for constructing non-fossil power plants up to the amount of the buyer's total taxes? Apple would commission $13B in solar farms and nuclear reactors, take the credit and then turn around and sell them to get all the cash back. Can you even say that would be a bad policy? It might have a desirable result. But it would also zero out their taxes.

stale2002 2y ago
> But as a sovereign state they get to decide for themselves. Not really no. The results of the court case prove that. > There is no real way to prevent this kind of thing Well. No way, except for through the result of an EU court case that just ruled that the tax scheme wasn't allowed. > Apple would Woulda coulda shoulda. The real question is "did they"? And the answer is no. They didn't do these other schemes, and they lost the court case.
- AnthonyMouse 2y ago
  You seem to be assuming that this isn't an iterative process. The process continues until the scheme is convoluted enough to satisfy the court while still being effective in attracting companies through de facto lower taxes. Meanwhile Ireland now has $13B to throw at Apple somehow to convince them to stay.
  - stale2002 2y ago
    > The process continues until the scheme is convoluted enough to satisfy the court That works both ways. The courts can act as well by simply punishing even more convoluted schemes with larger and larger fines.
- RHSeeger 2y ago
  > > But as a sovereign state they get to decide for themselves. > Not really no. The results of the court case prove that. To be fair, none of the states that are part of the EU _are_ sovereign states, because there is a high authority over them. Admittedly, that's debatable, because they can choose to leave the EU (as was seen by Brexit), but unless they do, they're not in complete control.
ClumsyPilot 2y ago
> There is no real way to prevent this kind of thing You do realise that US, EU and China regularly sue each-other in WTO over this? What counts as subsidies, etc. is a constant subject of dispute. That’s normal,
- AnthonyMouse 2y ago
  They regularly sue each other because it's intrinsically ambiguous. There is nothing for a government to spend tax revenue on that isn't a subsidy to somebody. If anything they should be demanding that the other governments have lower taxes so they can't use the money for subsidies to distort international trade in their favor.
  - tankenmate 2y ago
    "There is nothing for a government to spend tax revenue on that isn't a subsidy to somebody." That's just nonsense; so if the USA spent $1 and got a nuclear powered aircraft carrier in return that is subsidising the builder? More like running them out of business. Government spending is only a subsidy if the government spends over the market price for something. And if your next statement is that the government *always* pays over the odds, you'll need some good evidence. Because although it does happen it is not always.
    - AnthonyMouse 2y ago
      > Government spending is only a subsidy if the government spends over the market price for something. All they have to do is control who gets the contract, because the market price for something already includes a margin. But more than that, the subsidy isn't just who gets the money, its who gets the benefit of what's bought. Who benefits from the US having aircraft carriers, other than the defense contractors? Multinational oil companies, for example, who don't want their tankers captured by pirates or blockaded by adversarial nations. Who benefits when a government subsidizes higher education? The schools, of course, but also the companies who hire the graduates. "Well that's the good kind of subsidy", you might say. And so says everyone else about everything else.
trashtester 2y ago
> The problem with all of this is that it's all sneaky schemes. The problems start if one member selectively introduces practices that benefit them at a significant cost to the other members. Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs). Target subsidies are different. While countries can still get away with it if done on a small scale, large scale cases come with a risk of this kind of response.
- AnthonyMouse 2y ago
  > Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs). But it doesn't lead to higher taxes, because the whole point is to use the minimum tax rate and then achieve a de facto below-minimum rate by somehow refunding the excess money. They're not trying to attract only Apple, they're trying to attract businesses in general. Subsidies for things employers would otherwise have to provide apply to all employers and lower the de facto tax rate across the whole country, which is exactly the idea. > Target subsidies are different. While countries can still get away with it if done on a small scale, large scale cases come with a risk of this kind of response. "Targeted" is essentially undefinable. All allocation of tax money is targeted at something -- the untargeted thing would be to use the money to uniformly lower the tax rate.
  - trashtester 2y ago
    > They're not trying to attract only Apple, they're trying to attract businesses in general. Ok, so this is about circumventing the 15% minimum corporate tax? Is this somehow related to the objectives of directive 2022/2523? It seems to me that 2022/2523 is in place mostly to prevent transfer of profits from one jurisdiction to another to minimize the tax on profits generated elsewhere. Unless, let's say, a Germany corporation registered in Ireland would somehow be affected by electricity costs or healthcare costs covered by the Irish government, I'm not sure if the benefit is large enough to matter. Obviously, for companies with most operations happening within Ireland, the total tax pressure has a larger effect. But I don't think that was the type of problem this directive was designed to solve.
SJC_Hacker 2y ago
> sovereign state Well thats the rub, by being a part of the EU they are effectively semi-sovereign. Not to sound like a Brexiter
- piltdownman 2y ago
  No, we entered a common trade market. We're not even part of Schengen. We're an odd fish in terms of EU membership overall given our geographical position, size, and CTA with the UK. We are the only EU member state that are obliged to hold public referendums on Treaties. Ratification of the Treaty in all other member states is decided upon by the states' national parliaments. Ireland, Netherlands, and Luxembourg also have veto powers when it comes to EU wide regulations. In short, if we didn't have so many of our national parliament trying to appease the bureaucrats in the EU so they could land cushy numbers in the European Parliament for retirement, you'd see a lot more sabre rattling from Ireland regarding EU interference. Atm however, we have a lot of issues with Asylum legislation that has to be dealt with as prioirty https://en.wikipedia.org/wiki/Dublin_Regulation https://en.wikipedia.org/wiki/Dublin_Regulation

stale2002 2y ago

> But as a sovereign state they get to decide for themselves. Not really no. The results of the court case prove that. > There is no real way to prevent this kind of thing Well. No way, except for through the result of an EU court case that just ruled that the tax scheme wasn't allowed. > Apple would Woulda coulda shoulda. The real question is "did they"? And the answer is no. They didn't do these other schemes, and they lost the court case.

AnthonyMouse 2y ago
You seem to be assuming that this isn't an iterative process. The process continues until the scheme is convoluted enough to satisfy the court while still being effective in attracting companies through de facto lower taxes. Meanwhile Ireland now has $13B to throw at Apple somehow to convince them to stay.
- stale2002 2y ago
  > The process continues until the scheme is convoluted enough to satisfy the court That works both ways. The courts can act as well by simply punishing even more convoluted schemes with larger and larger fines.
RHSeeger 2y ago
> > But as a sovereign state they get to decide for themselves. > Not really no. The results of the court case prove that. To be fair, none of the states that are part of the EU _are_ sovereign states, because there is a high authority over them. Admittedly, that's debatable, because they can choose to leave the EU (as was seen by Brexit), but unless they do, they're not in complete control.

ClumsyPilot 2y ago

> There is no real way to prevent this kind of thing You do realise that US, EU and China regularly sue each-other in WTO over this? What counts as subsidies, etc. is a constant subject of dispute. That’s normal,

AnthonyMouse 2y ago
They regularly sue each other because it's intrinsically ambiguous. There is nothing for a government to spend tax revenue on that isn't a subsidy to somebody. If anything they should be demanding that the other governments have lower taxes so they can't use the money for subsidies to distort international trade in their favor.
- tankenmate 2y ago
  "There is nothing for a government to spend tax revenue on that isn't a subsidy to somebody." That's just nonsense; so if the USA spent $1 and got a nuclear powered aircraft carrier in return that is subsidising the builder? More like running them out of business. Government spending is only a subsidy if the government spends over the market price for something. And if your next statement is that the government *always* pays over the odds, you'll need some good evidence. Because although it does happen it is not always.
  - AnthonyMouse 2y ago
    > Government spending is only a subsidy if the government spends over the market price for something. All they have to do is control who gets the contract, because the market price for something already includes a margin. But more than that, the subsidy isn't just who gets the money, its who gets the benefit of what's bought. Who benefits from the US having aircraft carriers, other than the defense contractors? Multinational oil companies, for example, who don't want their tankers captured by pirates or blockaded by adversarial nations. Who benefits when a government subsidizes higher education? The schools, of course, but also the companies who hire the graduates. "Well that's the good kind of subsidy", you might say. And so says everyone else about everything else.

trashtester 2y ago

> The problem with all of this is that it's all sneaky schemes. The problems start if one member selectively introduces practices that benefit them at a significant cost to the other members. Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs). Target subsidies are different. While countries can still get away with it if done on a small scale, large scale cases come with a risk of this kind of response.

AnthonyMouse 2y ago
> Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs). But it doesn't lead to higher taxes, because the whole point is to use the minimum tax rate and then achieve a de facto below-minimum rate by somehow refunding the excess money. They're not trying to attract only Apple, they're trying to attract businesses in general. Subsidies for things employers would otherwise have to provide apply to all employers and lower the de facto tax rate across the whole country, which is exactly the idea. > Target subsidies are different. While countries can still get away with it if done on a small scale, large scale cases come with a risk of this kind of response. "Targeted" is essentially undefinable. All allocation of tax money is targeted at something -- the untargeted thing would be to use the money to uniformly lower the tax rate.
- trashtester 2y ago
  > They're not trying to attract only Apple, they're trying to attract businesses in general. Ok, so this is about circumventing the 15% minimum corporate tax? Is this somehow related to the objectives of directive 2022/2523? It seems to me that 2022/2523 is in place mostly to prevent transfer of profits from one jurisdiction to another to minimize the tax on profits generated elsewhere. Unless, let's say, a Germany corporation registered in Ireland would somehow be affected by electricity costs or healthcare costs covered by the Irish government, I'm not sure if the benefit is large enough to matter. Obviously, for companies with most operations happening within Ireland, the total tax pressure has a larger effect. But I don't think that was the type of problem this directive was designed to solve.

SJC_Hacker 2y ago

> sovereign state Well thats the rub, by being a part of the EU they are effectively semi-sovereign. Not to sound like a Brexiter

piltdownman 2y ago
No, we entered a common trade market. We're not even part of Schengen. We're an odd fish in terms of EU membership overall given our geographical position, size, and CTA with the UK. We are the only EU member state that are obliged to hold public referendums on Treaties. Ratification of the Treaty in all other member states is decided upon by the states' national parliaments. Ireland, Netherlands, and Luxembourg also have veto powers when it comes to EU wide regulations. In short, if we didn't have so many of our national parliament trying to appease the bureaucrats in the EU so they could land cushy numbers in the European Parliament for retirement, you'd see a lot more sabre rattling from Ireland regarding EU interference. Atm however, we have a lot of issues with Asylum legislation that has to be dealt with as prioirty https://en.wikipedia.org/wiki/Dublin_Regulation https://en.wikipedia.org/wiki/Dublin_Regulation