A company that leverages the favourable infrastructure and institutions of a country without paying its fair share is quite simply siphoning money from the taxpayers of that country into the pockets of its shareholders, the money that maintains that infra and those institutions. Politicians need to take a step back and realize that whatever jobs these companies bring, they are still a net loss to the country as a whole, the country would literally be better off if those people were unemployed!
> whatever jobs these companies bring, they are still a net loss to the country as a whole, the country would literally be better off if those people were unemployed!
That’s quite the claim. Got anything to back it up?
That comment is obviously wrong, proven easily by taking the extreme case of the policy applying to all employers: none of them paying taxes would quickly ruin any country, yes. But everyone being unemployed would get you to the same miserable state even faster.
But the argument doesn't have to be as extreme as that to support enforcement of some sort of equitable taxation: Take, again, the extreme case of the policy applying to all employers. That's broadly equivalent to abolishing corporate taxation PLUS that corporate windfall accumulating not in the countries they operate in, but whatever happens to be the go-to tax haven.
This being taxes on profits, there's zero effect on the company's activity (i. e. investment, hiring etc.) in the country. That's because Facebook will let someone in, say, Brasil, spend $5000 on ads irregardless of them having to give half of that to the local government. It's either $2500 or $5000 in profits, produced with 0 marginal costs.
Net result therefore is a zero-sum game between that government, and Facebook's shareholders. Even ignoring the geographic aspect (very little of Facebook's shareholders being likely to spend that money in Brasil), it seems rather intuitive that the public is better served by the money taking another lap paying for some school, rather than allowing some retired VC to improve the decorations on his next yacht.
That’s quite the claim. Got anything to back it up?
Pretty easy really. Multiply the cost of unemployment benefits * number of company employees in that country. Then look at the tax evaded by the company. "You do the math".
JSA in the UK is £73/week, or £3796/year. Let's say a company dodges £1Bn/year in taxes. How many people would they need to employ before the country breaks even?
nah, replace unemployment benefits with the summed salaries of the employees, since it's probably fair to assume employees spend most of their salaries in the country where they live.
also, you seem to imply a scenario where the company is kicked out of the country. That does not recoup any taxmoney to the state. It also likely doesn't make the infrastructure cheaper to maintain or any less desired, so the correct equation is just that you'd loose whatever taxes they do pay (surely they don't dodge all of them),and the sum of the salaries of their employees, plus whatever service the company provides, and you gain nothing.
Where does the tax paid by the company come in to play? And the tax paid by their employees? The real math is total company paid tax + total employee tax - societal costs of presence. That's rarely less than 0 and surely not less than the negative societal costs of unemployment if they, as you mention, are better off unemployed.
The folly so many keep making is they think every tax dollar is necessary to support every company present. That type of thinking makes even one cent of avoidance appear to be a net negative, when amount paid overall can still be a net positive compared to impact of presence.
LOL if you wish to disprove me do your own research! But I'll give you a hint, if tax evasion was good for a country, why would that country have taxes at all...?
> LOL if you wish to disprove me do your own research!
That's not how burden of proof works. You made the claim that "the country would literally be better off if those people were unemployed!", so prove it.
> But I'll give you a hint, if tax evasion was good for a country, why would that country have taxes at all...?
