5 ms·

At some point other factors like ease of contract enforcement, infrastructure, etc. become more important than shaving off a few more percents from the taxes. S

At some point other factors like ease of contract enforcement, infrastructure, etc. become more important than shaving off a few more percents from the taxes. So in the end it boils down to which government is able to provide better services for your buck which is how it should be. If only physical persons could relocate to a better place with the same ease corporations do now the governments would suck so much less.

cuckcuckspruce 11y ago
>If only physical persons could relocate to a better place with the same ease corporations do now the governments would suck so much less. If physical persons could relocate to a different country with the same ease as corporations then the instability of their tax bases combined with the difficulty of ensuring compliance with their taxing regime might very well spell the end of nation states.
wrong_variable 11y ago
Global GDP would double if labour was allowed the same freedom of movement as capital. But the human condition is such that I do not think it's not going to happen anytime soon :(
- eli_gottlieb 11y ago
  >Global GDP would double if labour was allowed the same freedom of movement as capital. Really? And would global average wages double, or would the profit margins on ever-cheaper labor do all the growing?
  - wrong_variable 11y ago
    Assuming inequality is constant - then yes. Your purchasing power would double, you could afford twice as much food, apple would produce twice as many ipads, etc.
    - eli_gottlieb 11y ago
      >Assuming inequality is constant - then yes. Variables rarely remain constant in the real world in the way that they do in ceteris paribus thought-experiments.
rayiner 11y ago
That creates a really significant free-rider problem. In your hypothetical, companies have a strong incentive to start in countries that have strong infrastructure and services (safety nets to reduce risk for founders and early employees, higher-education to ensure a supply of educated workers, etc), then move to a low-tax jurisdiction once they are successful. Imagine if investors in startups couldn't take equity, but were limited to taking a percentage of current profits. That would create a huge disincentive to be an early-stage investor, and a huge incentive to be an investor that could come in with the cheapest rates at the last round of investment for a company that already had established growth and revenues. In the alternate, consider the hypothetical of tax rate auctions at the time of birth. I.e. what tax rate would people bid in order to be born and try to become successful in the U.S. instead of somewhere else?
- austerity 11y ago
  While that's true, holding everyone by force is the most primitive and inefficient (in terms of common good) solution I can think of. For example, the safety net is in fact an early stage investment so it would be logical if the government providing the safety net would take equity in exchange. In fact that's one of the reasons why safety nets aren't such a good idea. The government essentially becomes an angel fund that funds every single idea no matter how dumb. Can't imagine this bringing about an optimal outcome.
- yummyfajitas 11y ago
  It doesn't create much of a free rider problem at all, actually. Most tax money is spent on wealth transfers to old people (and non-workers to a lesser extent) and the DoD. These are not particularly useful for startups. If a company headquartered in Singapore makes use of US labor (and implicitly our effective, but extremely overpriced schools), it pays a fair rate of taxation on it. It simply doesn't have to pay taxes to the US on profits from selling goods manufactured in the Philippines to citizens of Japan. That's ultimately the reason for moving corporate registration overseas, and that's the reason my next corporation will probably be headquartered in Singapore. Global taxation is insane; it's taxing US corporations for services that other governments have already provided and taxed them for.
jcfrei 11y ago
Removing restrictions on immigration aren't a silver bullet. The opening of labor markets in the EU has caused much lower social mobility than previously expected (ie. many Greeks stayed in Greece even though they could get much better jobs in Germany).
- austerity 11y ago
  Is there anything I can read up on this? I hear the population of Baltics halved, sounds like a rather drastic effect. Although I didn't imply immigration restrictions are the only problem either- indeed the language and other cultural barriers as well as our tendency to form bonds that are painful to break all work against mobility.
  - jcfrei 11y ago
    This article has quite a few sources: http://www.migrationpolicy.org/article/free-movement-europe-past-and-present http://www.migrationpolicy.org/article/free-movement-europe-... And a more recent report: http://ec.europa.eu/social/BlobServlet?docId=11945&langId=en http://ec.europa.eu/social/BlobServlet?docId=11945&langId=en

cuckcuckspruce 11y ago

>If only physical persons could relocate to a better place with the same ease corporations do now the governments would suck so much less. If physical persons could relocate to a different country with the same ease as corporations then the instability of their tax bases combined with the difficulty of ensuring compliance with their taxing regime might very well spell the end of nation states.

wrong_variable 11y ago

Global GDP would double if labour was allowed the same freedom of movement as capital. But the human condition is such that I do not think it's not going to happen anytime soon :(

eli_gottlieb 11y ago
>Global GDP would double if labour was allowed the same freedom of movement as capital. Really? And would global average wages double, or would the profit margins on ever-cheaper labor do all the growing?
- wrong_variable 11y ago
  Assuming inequality is constant - then yes. Your purchasing power would double, you could afford twice as much food, apple would produce twice as many ipads, etc.
  - eli_gottlieb 11y ago
    >Assuming inequality is constant - then yes. Variables rarely remain constant in the real world in the way that they do in ceteris paribus thought-experiments.

rayiner 11y ago

That creates a really significant free-rider problem. In your hypothetical, companies have a strong incentive to start in countries that have strong infrastructure and services (safety nets to reduce risk for founders and early employees, higher-education to ensure a supply of educated workers, etc), then move to a low-tax jurisdiction once they are successful. Imagine if investors in startups couldn't take equity, but were limited to taking a percentage of current profits. That would create a huge disincentive to be an early-stage investor, and a huge incentive to be an investor that could come in with the cheapest rates at the last round of investment for a company that already had established growth and revenues. In the alternate, consider the hypothetical of tax rate auctions at the time of birth. I.e. what tax rate would people bid in order to be born and try to become successful in the U.S. instead of somewhere else?

austerity 11y ago
While that's true, holding everyone by force is the most primitive and inefficient (in terms of common good) solution I can think of. For example, the safety net is in fact an early stage investment so it would be logical if the government providing the safety net would take equity in exchange. In fact that's one of the reasons why safety nets aren't such a good idea. The government essentially becomes an angel fund that funds every single idea no matter how dumb. Can't imagine this bringing about an optimal outcome.
yummyfajitas 11y ago
It doesn't create much of a free rider problem at all, actually. Most tax money is spent on wealth transfers to old people (and non-workers to a lesser extent) and the DoD. These are not particularly useful for startups. If a company headquartered in Singapore makes use of US labor (and implicitly our effective, but extremely overpriced schools), it pays a fair rate of taxation on it. It simply doesn't have to pay taxes to the US on profits from selling goods manufactured in the Philippines to citizens of Japan. That's ultimately the reason for moving corporate registration overseas, and that's the reason my next corporation will probably be headquartered in Singapore. Global taxation is insane; it's taxing US corporations for services that other governments have already provided and taxed them for.

jcfrei 11y ago

Removing restrictions on immigration aren't a silver bullet. The opening of labor markets in the EU has caused much lower social mobility than previously expected (ie. many Greeks stayed in Greece even though they could get much better jobs in Germany).

austerity 11y ago
Is there anything I can read up on this? I hear the population of Baltics halved, sounds like a rather drastic effect. Although I didn't imply immigration restrictions are the only problem either- indeed the language and other cultural barriers as well as our tendency to form bonds that are painful to break all work against mobility.
- jcfrei 11y ago
  This article has quite a few sources: http://www.migrationpolicy.org/article/free-movement-europe-past-and-present http://www.migrationpolicy.org/article/free-movement-europe-... And a more recent report: http://ec.europa.eu/social/BlobServlet?docId=11945&langId=en http://ec.europa.eu/social/BlobServlet?docId=11945&langId=en