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If only one country replaces the corporate tax with a tax on revenue, or if different countries put different tax rates on revenue, you still have opportunities for tax arbitrage.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 01:01:41 PM EST
[ Parent ]
So we propose a global government to implement the revenue tax.

I dunno if it'd work, but watching the Paulites lose their shit after hearing of it would be hilarious.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 01:12:02 PM EST
[ Parent ]
The EU has tried and failed to standarise the corporate tax base (not even the rate!) because too many of its member states are married to the race to the bottom. In fact, the fear of losing the "corporate tax advantage" is one of the alleged reasons for the Irish to vote no to Lisbon.

So, good luck globally.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 01:20:18 PM EST
[ Parent ]
It's never going to happen.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 01:23:28 PM EST
[ Parent ]
Drew J Jones:
global government

Bingo.

Pie in the sky at the moment, but consider the advantages:

Equalisation of opportunity - people could move as freely as capital, subject to common sense limits
The instant removal of a $1 trillion annual military tax
Closing of all so-called off-shore tax loopholes, which would put yet more wealth into play for productive social investment

The current system of competing nation states is ruinously expensive.

Of course you'd need the strongest democracy in history to prevent a slide towards feudalism and oligarchy. You could create that with absolute limits on personal wealth and influence and semi-random sortition of public representatives.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Sep 21st, 2008 at 01:36:31 PM EST
[ Parent ]
Sounds like Utopia to me, and I am a fan of utopian projects.  But the problem, as always, is getting from here to there.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Sep 21st, 2008 at 05:22:29 PM EST
[ Parent ]
I think that the opportunity is minimal if you base they levy on revenue rather than profit.

Most retail transactions are going to occur on the soil of one company, and there's no way that's going to change to something that's going to occur offshore.  

People buy cars and computers from distributors.  So long as we operate on a principle of point of purchase, there's less opportunity for arbitrage.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 01:33:57 PM EST
[ Parent ]
if you bring down the corporate tax rate to 0 in your country, nobody can arbitrage against you (unless they actually provide subsidies to get to a negative tax rate).

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Sep 21st, 2008 at 02:07:38 PM EST
[ Parent ]
They can arbitrage by having a lower rate of limited liability levy.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 02:08:28 PM EST
[ Parent ]
But.

Liability limitation insurance is something that can be handled on a national basis.  So that Swiss RE can only issues policies on liability in the US through its US subsidiarity.  So if you can create walls for liability limitation at the national border, then in order to enter a market, a company must agree to the levy as the price of admission.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 02:41:08 PM EST
[ Parent ]

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