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You seem to be implicitly assuming a closed system in which both economies have the same tax burden, economic productivity and efficiency. So, when EU exporters
by Paradigma11 2y ago
You seem to be implicitly assuming a closed system in which both economies have the same tax burden, economic productivity and efficiency. So, when EU exporters don't pay VAT on exports there must be a cost for the US producer somewhere that he cant write off.
Which you haven't shown.
You started with corporate tax rate but from my understanding those are pretty similar if being paid at all:
"• Over the past three years, Tesla has reported $10.8 billion in U.S. income but paid only $48 million in federal taxes, bringing its effective tax rate to 0.4 percent—far below the 21 percent corporate tax rate."
https://www.nationofchange.org/2025/01/31/tesla-paid-zero-federal-income-tax-in-2024-while-gop-pushes-more-corporate-tax-cuts/ https://www.nationofchange.org/2025/01/31/tesla-paid-zero-fe...
- firesteelrain 2y agoYou are correct that the overall tax burden, economic productivity, and efficiency are not identical between the US and VAT-based economies like the EU. However, the VAT refund system is what I have been saying is what causes the imbalance along with differing tax structures. This is not a dig against the EU as some people might be thinking I am saying. I am merely explaining the thought process. Devil’s advocate. US is still disadvantaged despite subsidies for EV for like Tesla that were created to encourage clean energy. There is still a system wide US problem. This is despite Tesla receiving subsidies that are far below the 21% corporate tax rate. The tax is still there and then you have VAT that can’t be refunded because the US does not have a VAT system.
- Paradigma11 2y agoAverage corporate tax in the EU is 21.5%: https://taxfoundation.org/data/all/eu/corporate-income-tax-rates-europe/ https://taxfoundation.org/data/all/eu/corporate-income-tax-r... What are those taxes that you are talking about?