
France Plans 5% Digital Tax as Governments Chase Internet Giants - petethomas
https://www.bloomberg.com/news/articles/2019-03-03/france-plans-5-digital-tax-as-governments-chase-internet-giants
======
iguy
Can anyone comment on how this interacts with the idea of the single market?
Why can Google Ireland Ltd. be charged a special tax for doing business in
France?

In my (limited) understanding I thought this was not supposed to happen, and
that most goods and services could automatically be sold EU-wide. France could
not charge import duties on Guinness trucks, nor demand that beer good enough
to be sold in Ireland is not good enough to be sold in France.

(This does not sound at all like the usual discussion of the tax on
multination's profits, and whether declaring that your business unit in the
Bahamas actually made the profit is avoidance or evasion. It seems to be a
brand new tax on some kinds of business-to-business sales.)

~~~
jsty
There is already a difference in tax (VAT) rates based on the consumer's
location. This move would be distinct from import duties or product standards
in that it's not really creating a clear barrier to sales across the single
market.

On the other hand, the really quite high threshold might well be subject to
complaints on the basis of distorting the single market. All the large
multinationals that would hit the threshold reside in Ireland / Luxembourg,
whilst lots of French firms don't hit the threshold and thus gain a
competitive advantage.

I'm neither a lawyer nor a tax advisor.

~~~
r00fus
Wouldn’t it be more accurate to say that it’s correcting an imbalance?

Google operates in France but is able to undercut France businesses for
digital content sold to French people ( merchandise is traceable ) because it
happens to have an Ireland operation?

~~~
sbacic
If the imbalance is that an Irish company is more competitive than a French
one, then no, not really.

~~~
BartBoch
In this case, this will be the race to the bottom and smallest countries will
be able to charge 0% tax just for the sake of office space rented since their
domestic market is small enough to not bring much of income tax (Luxembourg
for example).

The issue here is with omitting responsibilities. If a company makes hundreds
of millions of income in a country, it should pay some taxes there.

There is a huge push in Poland now, to introduce non-refundable revenue tax
(of 1.5%) on larger companies in place of income tax. This would solve the
issue entirely.

~~~
sbacic
There would be no race to the bottom if there was a real, tangible benefit to
being established in a high tax country - ie, better public services, a more
educated workforce, more business friendly environment, etc. As it is right
now, very few countries justify their tax rates and that prompts people and
businesses to do the rational thing and go where they pay less for the same
thing.

I think it's very concerning that European countries are so focused on taxing
access to their market rather than asking themselves the question of what they
can offer to businesses and individual to make them more interesting as places
to settle down or establish a company.

~~~
anoncake
A country does not have to justify its tax rates before Facebook. A country
should focus on serving its citizens, not multinationals.

~~~
sbacic
It most certainly does - both to its citizens and the companies that do
business there. Otherwise, the implicit idea that your taxes pay for public
services is chucked out of the window and we're left with taxation as just
another expense to be avoided if possible.

~~~
anoncake
Only to its citizens. Not to companies. The idea behind taxes is not to pay
for public services, but for whatever the citizens want to use them for (which
happens to include public services of course).

Companies aren't allowed to vote for a reason.

~~~
sbacic
Keep in mind that companies are not just large multinationals but also small
mom and pop stores, freelancers and everything in between. I hope you
understand how deeply hypocritical it is to tout paying taxes as a moral
obligation while at the same time refusing to be held accountable for how that
money is being spent or denying companies a voice.

~~~
anoncake
And many companies are owned by citizens whose opinions actually matter just
as much as those who don't own a company.

> I hope you understand how deeply hypocritical it is to tout paying taxes as
> a moral obligation while at the same time refusing to be held accountable
> for how that money is being spent or denying companies a voice.

There's nothing hypocritical about not wanting corporations to have even more
power than they already have.

------
HNBRN
French guy here. I think a lot of comments miss the point of the new tax :
Some US tech companies use fake transfer prices to avoid paying income taxes
in France. Eg Irish facebook subsidary owns the Facebook brand for Europe and
charges other subsidiaries for using it. The French Facebook subsididary was
charged so much in past years that it didnt declare any benefits in France.
This is fraud. But this is fraud at EU level and EU is not yet organized to
face it. So French government is taking the lead and expects other countries
to follow soon (very likely). You have to understand that French companies and
French taxpayers a getting reasonnably upset for paying high taxes when some
US companies dont.

~~~
ecaradec
French guy too. I have to add that’s not specific to US company : Total, Ikea,
and even EDF (french electricity state owned company ) also use the same
practices. I too would prefer that they fix the law. It has been decades we
know this and nothing seems to be done. I hope that the fact that population
is getting more and more upset by the situation will push the politics to
move. Btw the way the same companies dont seem to pay taxes in the US either.

~~~
Ntrails
I think the key point here is that all global companies structure their tax in
the most efficient fashion possible. They pay a bunch of money (millions) to
save far more in tax globally. Forget morality. They are behaving optimally
for their incentives.

The only way forward is to shut down the model of "redirecting profits to the
place with the lowest tax". Kill it with fire.

------
Marazan
A key feature in many obfuscated corporate structures designed to avoid tax is
differing corporate structure declarations in different tax juristictions.

As companies are made up of many different sub companies by declaring your
corporate structure as one way to the US tax authorities and another to the,
say, Luxembourg tax authorities you can make intra group loans appear and
disappear from different sets of accounts. And as a result the costs and,
crucially, income from those 'loans' materialise wherever you want. Or not
appear at all.

------
microcolonel
In France, taxes account for an ever increasing proportion of a stagnant GDP.
Nobody stops to ask if a "Digital Tax" makes any sense: are they saying that
digital properties make use of some public resource without taxation, or is
this just basically a tariff?

[0]: [https://data.oecd.org/tax/tax-
revenue.htm](https://data.oecd.org/tax/tax-revenue.htm)

------
yann63
Couldn't we just ban tax evasion? What makes it so hard? (honest question)

A recent European study has shown that the more company win money, the less
they pay in taxes (in percentage).

Is it because of bad laws? Corrupt politicians? Something else?

~~~
cpursley
Banning tax evasion is easy. Just get rid of corporate income taxes and
replace it with a sales tax. It's not like corporations pay taxes anyways;
their customers do as tax is built into the cost of products.

~~~
fauigerzigerk
I see a couple of issues with this solution:

1) Companies would not pay most of their taxes where they put the greatest
strain in public infrastructure.

2) Moderate differences in VAT rates would create enormous price differnces,
which would invite smuggling.

3) The incentive for rich people to move to low tax destinations would be even
greater than it already is.

I won't deny that the solution has upsides as well though.

~~~
rayiner
Companies don’t put strain in public infrastructure. They’re legal
abstractions. People and their activities (employees, shipping, factories) put
strain on the public infrastructure, and they can be taxed (income, real
estate, and pollution taxes) at that point.

The issue is that when Google shows ads to someone in the UK to monetize a
search service used by the UK person, Google uses almost no UK resources.

~~~
tomatocracy
Exactly. What a lot of governments seem to want is some form of tax on foreign
companies for the privilege of gaining access to their local
population/market. For physical goods we call that an import duty.

~~~
fauigerzigerk
They do indeed want that, but what is it that has changed recently that makes
this so much more urgent? People claim that digitisation has changed the
equation, but I don't understand why. Google is for the most part a regular US
exporter.

It appears to me that the only thing that has changed is that the US has left
everyone else in the dust, which causes envy.

~~~
Mirioron
Governments need more tax revenue. Almost every country with social programs
is on a timer to figure out ways to raise tax revenue to pay for those
programs. Almost every developed country has a fiscal gap.

~~~
fauigerzigerk
I get why everyone (me included) wants money. But if every government comes up
with its own inconsistent ad hoc scheme to tax foreign corporations then they
will unleash the mother of all trade wars.

------
puzzle
This is not very helpful or informative. In the case of Google, who are they
going to tax? Google Ireland? Google France? How exactly?

~~~
beagle3
Money collected for services rendered through a French IP. That is, on ads
shown to French viewers, on GSuite accounts paid while connected to a French
IP address, etc.

~~~
puzzle
The money is collected by Google Ireland. So they're going to charge Google
Ireland? It's probably safe to assume they're not charging Google LLC in
Delaware.

~~~
cheerlessbog
Presumably France has access to the not in considerable French origin
advertising revenues.

~~~
puzzle
How? Based on VAT? I can think of multiple approaches, but each of them is
convoluted or deviating from existing norms in its own way. Every time there's
an announcement like this, it's often surprisingly low on actual details.

------
readhn
Why wont government taxation agencies have tax bounty programs?

If you, as a tax professional, find a taxation loophole that allows big
businesses to lower their taxes - you get a $$$ compensation and the loophole
gets publicized and "officially" patched.

~~~
donatj
I don’t think knowledge of the loopholes is the issue. It’s reasonable to
determine what loopholes were used after the fact. The problem is actually
closing them and the political fallout involved.

~~~
readhn
perhaps the loopholes should be exposed to the general public then so that we
can hold the public officials accountable to fix them.

------
fosk
As usual, highly inefficient governments trying to expand into every wallet in
their sight, in order to keep funding their inefficiency with no
accountability.

We need market de-regulation. End of government-sponsored monopolies.
Accountability on budget spending. Enablement of profit-oriented policies that
generate surpluses. Enabling equal opportunities to people of all social
classes, and performance reviews to keep everybody accountable.

Then, and only then, equal and fair taxation that promotes social wellness and
stability.

~~~
jlebar
What would you say is an example of a country that -- more or less -- follows
these principles?

~~~
dsfyu404ed
Different governments do different parts of that well. If there was any
government that did it all perfectly we would be saying "we should do things
like X" not describing policy in the abstract.

------
throwaway_9168
This reminds me of a horrible tax I came to know of recently - something
called the EU VAT MOSS on digital goods. Apparently, it is supposed to target
giants like Amazon who route money via multiple countries to evade taxes. Not
surprisingly, this ends up affecting the smallest players most drastically.
Worst, the glib language used to describe _who_ should pay the tax is utterly
confusing. As always, this means the actual target company of this tax chalks
it down as yet another thing they need to remember (amongst a million other
things), while the tiniest players who are starting out and who don't reside
in the EU will have to worry and stress endlessly about the stupidity of
dealing with something like this.

Here is what I have learnt about Eurocrats: a) they don't understand economics
b) they definitely don't understand unintended consequences c) I am willing to
bet not one of them has ever bootstrapped a successful venture and finally d)
there is a good reason why no country in Europe is able to create its own
Silicon Valley - they are just too busy creating more busywork for themselves.

And to the well-intentioned person who comes along and says "Well, if you are
clearly not the target of this, then why do you even worry?" I have a question
- if it turns out that you are wrong, are you going to pay the taxes on my
behalf? Actually, this is literally what I asked a friend of mine from Europe
who expressed that sentiment. Not surprisingly, he wasn't really willing to
put his money where his mouth was.

I am frankly astonished by all the people from EU who come in and comment
things like "Oh, you don't really know how European laws _actually_ work. If
you did, then you wouldn't be worried". Do you not have nothing better to do
in life than trying to understand the nuances between the "letter of the law"
and the "spirit of the law" in every country around the world?

Oh, and by the way - HN will be very interested to know this: right now, there
is a company called Paddle which is a Stripe competitor - and this one law (EU
VAT MOSS) seems to have single handedly revived this company. It was (and
apparently still is) a painful software to use, and Stripe is faaar superior
in terms of API and integrations [1], but Paddle has now become the defacto
choice [2] for everyone who actually cares about the EU VAT MOSS because
Paddle handles all the annoying crap on your behalf. My guess is, Stripe -
which is too Silicon Valley focused - is going to be blindsided by EU VAT
MOSS, hand over a lot of their next generation of customers to Paddle, and
won't even know what hit them in a few years if they don't pay careful
attention to what is going on here.

[1] [https://www.indiehackers.com/forum/anyone-using-paddle-
for-s...](https://www.indiehackers.com/forum/anyone-using-paddle-for-
subscriptions-experiences-7d0c5fe4f6) [2]
[https://www.indiehackers.com/forum/how-do-you-handle-vat-
mos...](https://www.indiehackers.com/forum/how-do-you-handle-vat-
moss-8be8ebdf98)

~~~
laurentl
I didn’t know what this was, so I checked
([https://europa.eu/youreurope/business/taxation/vat/vat-
digit...](https://europa.eu/youreurope/business/taxation/vat/vat-digital-
services-moss-scheme/index_en.htm)). Long story short: MOSS stands for “mini
one stop shop” and looks explicitely designed _to make it easier to sell
across the EU_.

> The Mini One-Stop-Shop (MOSS Scheme) enables you to supply digital services
> within the EU without the need to register in each EU country you supply to.
> It can be used by both EU-based businesses and non-EU businesses.

Honestly from reading the quick description of the law, if I was a business I
would definitely try to take advantage of the law instead of registering in
different countries for the single purposes of paying VAT.

I get that some payment actors allow you to do that easily, while others don’t
(yet), and yes this would be a criterion in choosing a payment gateway. But
apart from that, I don’t really see how this law is evil, or an illustration
that Eurocrats don’t know anything about business (there are plenty of other
examples, but this isn’t one). Can you explain in which way the MOSS is
“horrible”?

~~~
sbacic
I can sell services domestically up to a limit of about 40,000 euros before I
need to register and account for VAT. If I make even a single EU sale, I must
immediately register for VAT and pay tax on that sale, either through MOSS or
directly to the country my customer is in. The EU is now "generously"
considering introducing a limit of 10,000 euros before you need to register
for VAT.

I also need to disagree with the parent poster - the rules for what is and is
not a digital service are relatively clear - but not clear enough that your
local tax officials understand it, apparently. I've had situation where my
local tax agency incorrectly interpreted that my services (freelance software
development) could be construed as being digital services and thus could fall
under this scheme.

Due to this and various other reasons, I am considering emigrating from Europe
- some back of the napkin calculations show that I could live a comfortable
middle to upper middle class lifestyle in other parts of the world just on the
tax difference.

~~~
AnssiH
> The EU is now "generously" considering introducing a limit of 10,000 euros
> before you need to register for VAT.

No, that limit was passed in 2017 and took effect for digital services in
January 2019:

[https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32...](https://eur-
lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32017L2455)

I.e. if your cross-border EU sales of digital services are less than 10 000 €,
you can consider the sales domestic.

~~~
sbacic
Thanks for mentioning that! I remember reading that it was being discussed,
but not that it had already been implemented.

It's not much, but still better than nothing.

------
ddebernardy
Might anyone have insights on why they're stopping at 5%?

If the idea is to tax the internet giants on the business they do in France,
why not seek to tax them at the usual corporate tax rate? The internet giants
will, I presume, fight it either way, and it's not like a tax is going to stop
them from serving French customers.

~~~
glutamate
As I understood the article, this is a tax on sales, not profits.

~~~
ulfw
To ddebernardy's point then, why not charge VAT?

~~~
sharpneli
VAT is generally not paid from b2b transactions which are the vast majority of
ad sales.

To be precise you do pay VAT in some cases but then it is refunded. So no
money to government.

~~~
kgwgk
VAT would be only partially refunded. Unless you’re selling your
product/service for less than it costs you, not a good business model.

~~~
tonyedgecombe
It works its way down the supply chain until it reaches the consumer.

------
Neil44
Well, killing off the high street shops then making all the money disappear
tax free is not a path to a sucessfull society.

------
grondilu
I'm French and I love Amazon. I buy many stuff on Amazon that I have
absolutely no idea how I could get them otherwise.

That news makes me anxious about Amazon deciding not to offer its service in
France one day.

~~~
apexalpha
Then there will be a competitor that will offer it. In NL we have a local
grown Bol.com that does exactly what Amazon does (minus AWS).

Would it be fair if Amazon started competing while they pay no tax here when
Bol.com does? I don't think so.

~~~
thirdsun
Unless Amazon is breaking any laws by not paying taxes, yes, I think it's
fair. What I'm trying to say is that in order to prevent tax avoidance proper
legislation is required. Before we punish the players for utilizing the
framework to their advantage we need to fix the system.

------
ilrwbwrkhv
all this nonsense is because we are trying to tie internet businesses which
are uniting and global by default into "countries".

------
onetimemanytime
The government needs funding to operate, efficiently or ineffectively but
that's the voters problem.

They tax individual and corporate entities.

Companies gets cute and exploit loopholes with dozens of companies and
locations to avoid paying the normal tax rate.

So the state strikes back and imposes a 5% (sorta sales) tax that cannot be
circumvented. No big deal, other than for Google, FB etc companies that choose
to do business in France.

I'm sure they can still keep their quintuple sandwich tax schemes

------
skookumchuck
France is hardly short of taxation revenue.

------
julioo
Please I want to pay this tax and avoid the 30% Profit tax.

------
gok
So will this apply to AWS, Netflix, Spotify?

------
titanix2
Very good but where the 5% come from? I’m reading another article in French
about it and they’re speaking of 3%.

~~~
kgwgk
“Son taux sera modulé en fonction du chiffre d’affaires avec un maximum de
5%.”

[https://www.gouvernement.fr/taxe-gafa-que-prevoit-le-
futur-p...](https://www.gouvernement.fr/taxe-gafa-que-prevoit-le-futur-projet-
de-loi)

It seems they’ve decided to make it 3% now?

Edit: that’s apparently the case:

[https://www.lesechos.fr/economie-france/budget-
fiscalite/060...](https://www.lesechos.fr/economie-france/budget-
fiscalite/0600826885966-la-taxe-gafa-aura-finalement-un-taux-unique-
de-3-2249138.php)

------
lurker213
why are governments such parasites? wanting to stick their finger in every
pie?

~~~
infinity0
why are corporations such parasites? benefiting from the citizens in a country
like France that are supported by its social services and infrastructure like
roads, healthcare, a justice system that prevents the corporation's property
from being stolen, but not contributing their fair share of the tax back and
even arrogantly denying that they are benefiting from the infrastructure that
they are taking advantage of for free?

~~~
sparkie
A corporation is a person, but it's a legal fiction. The corporation is simply
a gathering of non fictitious people who come together to collaborate and earn
revenue as a collective. Each of those people pays taxes from their salaries
like anyone else - they pay their fair share.

So what is a tax levied on a corporation? It's simply an _additional_ tax
levied on the human people who make up the corporation. They're already paying
their share, now they should be paying more?

If you're just a lowly employee with no control or insight into a
corporation's finances, you might think it doesn't matter to you. Wrong.
You're part of the corporation too. Money the government is taking out of the
corporation is money that could potentially be added to your paycheck if the
corporation prospers and you play your role.

~~~
infinity0
"A government is a legal entity, but it's also a legal fiction. [..]

So what is a tax that governments collect? It's simply an _additional_ income
that human people benefit from. [..]

If you're just a lowly citizen with no control or insight into a government's
bureacracy [..]"

etc etc

Sorry, you can't have it both ways - pretend that corporations and governments
are somehow different. The cognitive dissonance here is hilarious.

~~~
sparkie
Governments and corporations are very different. A corporation needs to
generate profit. If they don't profit, their shareholders don't get paid! If
they continually don't profit, they go out of business and lose the
investments they put into the corporation.

Government has no obligation to profit. Quite the opposite. Government
enterprises simply spend (other people's) money. If government worked on a
profit motive like corporations, everybody would love governments and there
would be no complaints. Imagine that instead of paying taxes, you got paid a
bonus when your country prospers?

~~~
infinity0
You're grasping onto ideological straws. Both governments and corporations
have to manage their finances, together with non-financial aspects of reality,
in order to survive. Smart corporations don't only look at the bottom line on
their account sheets.

~~~
sparkie
They both have to manage finances, but governments are spending other people's
money. A corporation is people _risking their own money_ on profitable
ventures. How you can think they are in any way similar is beyond me.
Governments have little accountability because they are so large, and they
can't "go out of buisiness" because they don't have competition. They merely
have a quadrennial theatrical show where two "directors" appear to compete for
business, but where the shareholders (the taxpayers) ability to actually
influence those "business" decisions are almost zero.

If there were a free market for most of the services government takes it upon
themselves to provide (by their force on monopoly), the government would be
out of business in nearly every area because there would be better competitors
offering better services at lower costs.

~~~
infinity0
> governments are spending other people's money. A corporation is people
> risking their own money on profitable ventures

This is what you choose to believe, to maintain your internal consistency in
your own ideology. From the point of view of the law, it is the government's
money after they tax you, and the government believes that it is their money,
in order to maintain their internal consistency of their ideology that
justifies their legitimacy. They "risk" their money on various government /
societal ventures and their "profit" is their continual acceptance by the
citizens.

In both cases, forgetting about the ideology, what happens in reality is a
transfer of wealth. I have to pay a government in order to live on land that
they have physical control of, I have to pay a corporation in order to eat
food that they have physical control of, or obtain other essential life
resources from them.

Some governments and corporations are so large they can't "go out of business"
because they don't have competition indeed. Some are smaller and they have to
cater to individual customer / citizen demands more readily.

~~~
sparkie
> This is what you choose to believe, to maintain your internal consistency in
> your own ideology.

Dude, they're completely different. A corporation has to provide services
people want to use of their own volition. A government takes money off people
without asking. They are completely unalike and it shows in how the operate.
Risking other people's money is something anyone can do. Risking your own
money means you need to make smart decisions. The government are inherently
less smart than corporations because they lack the business sense that
entrepreneurs have.

Politicians are paid generous salaries, but they're hardly fitting of such
salaries for their abysmal performance in their management. If managers in any
corporation were like politicians, they'd be sacked! Politicians are unlike
such managers because they get to decide their own salaries too. Directors can
chose their own salaries because it is their own money they're risking.
Politicians are not taking any personal risk beyond their career aspects. They
have no skin in the game. (In fact, their incentives are to enrich themselves
whilst in office, even at the cost of the taxpayer they purport to represent).

> I have to pay a government in order to live on land that they have physical
> control of

I noticed you originally put owned, by were right to edit. Most land is
privately owned, not by governments. Even most of the publicly accessible land
is privately owned easements.

Although government doesn't _own_ all of the land, they are effectively part
possessors because they have some rights to it (at the cost of the owner's
rights). This is simply more evidence that governments overstep their reach
and encroach on people's lives. Ultimately, they rely on that monopoly of
force, because given the choice in a free market, those land owners might
chose somebody else to be the stewards of their land.

You have to ask, if governments should be the sole providers of stewardship of
easements in a geographical area, why shouldn't they be the sole providers of
food too? You say that you need to pay a corporation to eat, but shouldn't
_that_ service also be subsumed by government? Why even stop there. Let's have
full on communism!

Well, that has been tried multiple times and it failed miserably every time.
On the other hand, free markets have been tried and they were hugely
successful in drastically improving the standard of living for millions of
people. The evidence is clear. Corporations generate wealth and then the
governments spend it. Anti-capitalists would have you believe the opposite is
true.

~~~
infinity0
> A corporation has to provide services people want to use of their own
> volition. A government takes money off people without asking. [..]
> Ultimately, they rely on that monopoly of force [..]

Distinguishing having a de-jure monopoly on force vs a de-facto monopoly on
something else is not a useful practical difference to make. Other
quantitative aspects of the relationship are more important to the analysis,
and you pointed out some of them yourself.

This artificial elevation of this "monopoly on force" pollutes other aspects
of your analysis of reality, leading you to say things like "If you're just a
lowly employee [..] you might think it doesn't matter to you" apparently
without irony.

In some sense, a government does take money from me without asking. In some
other sense, this relationship is consensual - individuals with more
resources/power are free to move to the jurisdiction of a different
government. Similarly, the degree to which some corporations "take" money from
people depends on the circumstances. People have to live somewhere, eat
something, etc, and this has a big influence on the corporations they _must_
give their wealth to. So distinguishing governments from corporations is not
particularly meaningful or interesting, and leads you to artificially
exonerate some bad activities of corporations whilst incriminating some good
activities of governments.

edit:

> Most land is privately owned, not by governments.

I changed to "physical control" because it was more relevant. Even "ownership"
is a (very convincing) "legal fiction" whose power derives from the
government's control over that land. If it were not able to maintain this
control, another country could invade it. If you were able to actually control
the land that you "own", then sure I might have to pay you taxes in order to
live on it (or move somewhere else with better tax conditions).

~~~
sparkie
> Distinguishing having a de-jure monopoly on force vs a de-facto monopoly on
> something else is not a useful practical difference to make.

It depends how the monopoly comes about. Many de-facto monopolies arise _as a
result of_ government intervention in the market. Some of it accidental
(unintended consequences of other policies), and some of it intentional
(enticed by lobbying money).

Natural monopolies which arise are not necessarily bad, but can be if they are
essential and they're engaged in underhanded behavior like price fixing. In
these cases, it is right that we have a legal system which can deal with such
problems as they arise, but IMO, it's a mistake to try establish broad
frameworks which try to deal the wrong causes of the problem (one of the
causes of the unintended consequences mentioned above).

There are countless cases of government intervention in markets which ends up
favoring big corporations and harming smaller businesses. I'm 100% in
agreement that we should do what we can to prevent this kind of government-
big-corp collusion. Reducing red tape for startups and ending government
sanctioned monopolies (including a drastic restructuring of the patent system)
are some examples. Another step towards this would be to greatly reduce the
size of government, since the less they're responsible for, the less they can
screw up.

> leading you to say things like "If you're just a lowly employee [..] you
> might think it doesn't matter to you" apparently without irony.

I use those words deliberately and with intentional irony. Employees simply
see themselves that way because they feel in a position of powerlessness, even
in some top jobs. For example, there are recent stories of game developers
wanting to unionize. They apparently consider themselves to be "lowly"
employees, if they can't take it upon themselves to demand better working
conditions or salaries for skills which are in demand. What hope do we have if
some the best paying jobs want to unionize? (Make no mistake, this will start
with gaming, but spread to many areas of programming).

Unions have many problems and cause unintended consequences. They create red
tape which leads to barriers of entry into the industry, and price fixing ends
up becoming accidentally implicit in the market because of the union's
interference. If game developers think their working conditions are going to
improve under a union, they're terribly mistaken. What will really happen is a
good portion of them will simply lose their jobs, most of them will have wage
stagnation, and only the most specialized and skilled workers will be able to
demand higher compensation.

> Similarly, the degree to which some corporations "take" money from people
> depends on the circumstances. People have to live somewhere, eat something,
> etc, and this has a big influence on the corporations they must give their
> wealth to. So distinguishing governments from corporations is not
> particularly meaningful or interesting, and leads you to artificially
> exonerate some bad activities of corporations whilst incriminating some good
> activities of governments.

Corporations are by no means perfect and bad behavior can't simply be excused.
I also don't doubt that government does some "good activities". My complaints
are more about the efficiency of how they do so. I believe more competition
would lead to better services than government (and corporations) offers in
almost all areas. (To be clear, I'm not an anarchist, but the smaller the
government, the better).

We also need to look at consumer responsibility though. If consumers are
outraged by the behavior of some corporations they do have skin in the game,
and can protest the behavior by refusing to pay for their services. As much as
I'm not a fan of things like big tech companies engaged in censorship, they're
not _essential services_ and if people are outraged enough they'll stop using
them. On the other hand, the banking services which are unpersoning people for
political views are different story: One, because they _are_ essential, but
two, because it is government red tape which prevents competitors from
replacing them.

The biggest problem of government is that it simply wants to do more and more.
Socialism gradually creeps in a step at a time, mostly unnoticed because each
step is small and seems harmless. A few decades later and almost all personal
liberties are under assault and top down control has become the norm, instead
of bottom up market forces. The constitutional limitations of the US
government are invaluable and the attacks on them are a disaster for the whole
of humanity.

> individuals with more resources/power are free to move to the jurisdiction
> of a different government.

There some merit in this, but some governments will also still try to tax you
even for earnings you make outside of their jurisdiction. Aside from that,
corporations can locate to different jurisdictions, and _will_ locate if
taxation is more favorable to them elsewhere. A government therefore, needs to
create an environment which is friendly to businesses, else their economy will
go sour. The recent democrat fuckup of the NY Amazon deal is a good example of
what bad government policy looks like. Yes, Amazon make enough money that they
don't _need_ tax breaks, but what favors have the Dems for New Yorkers? Anti-
business policies damage the local economy for everyone, not just the greedy
corporations.

~~~
infinity0
> [..] it's a mistake to try establish broad frameworks which try to deal the
> wrong causes of the problem [..]

It's true that regulations sometimes are harmful, but this really depends on
the specific circumstances, and I don't see an argument here for being anti-
regulation in general.

A lot of governments especially those today, have come about via democratic
revolutions or less-violent processes. As citizens of those places, many of
them _want_ their government to regulate corporations, especially since this
is typically more effective than trying to boycott the corporation.

> I believe more competition would lead to better services than government
> (and corporations) offers in almost all areas. (To be clear, I'm not an
> anarchist, but the smaller the government, the better).

I also believe that competition is generally a good thing, but I don't believe
that "small government" preserves competition. Those "natural monopolies" (as
you defined, whatever that means) destroy their own competition by definition,
and just because they are "natural" does not mean that they stay efficient, or
that they don't abuse their own power.

That is not necessarily to say that I favor a large government, but in order
to preserve competition, efficiency, and lack of abuse, we need to think of
mechanisms other than simply "small government". If government regulations is
the only mechanism we can think of for now, I'd rather we try that, than stick
to "small government" for ideological reasons and let corporate power run
amok.

> The biggest problem of government is that it simply wants to do more and
> more. Socialism gradually creeps in a step at a time, mostly unnoticed
> because each step is small and seems harmless.

This effect happens with large corporations too. First they provide good
service, and everyone buys from them believing they will use their power well,
and this seems harmless. Then sometimes they grow too powerful and start
abusing their position (with or without help from government handouts) and
consumers are negatively affected to different degrees.

> [..] big tech companies engaged in censorship, they're not essential
> services [..]

What is _essential_ or not also depends on the context of history. It is not
in human nature to _require_ a banking system, but as you agree it's
impractical to operate in society today without having access to banking
services. It's also becoming very hard to operate in society without access to
the internet and various other tech services that 99% of other people have
access to.

------
seanalltogether
Since this is applied to revenue, is this like a reduced VAT reclaimation or
something?

------
sytelus
At least in US Amazon already adds tax in purchase price. Similarly when you
buy copy of software, tax is already added. For ad bills to publishers, I
would think it’s the same. So what does this “digital tax” is about?

The big issue here is that eventually all taxes will be transferred to end
customers. The profits for businesses don’t get lowered because of more taxes
(unless demand drops). So people in every country should be worried when
government eyes for more taxes.

~~~
throwaway2048
To portray taxes as only being paid by the end customers is a massive
oversimplification, if businesses could charge the amount extra the tax
supposedly increased prices by and retain optimal profitability, they already
would.

Taxes hit profit margins first, possibly pushing companies into non viability
(unlikely to be much of a concern in this arena).

Remember that businesses don't just operate based on the cost of their inputs,
they operate based on the price customers are willing to pay for their outputs
aswell, which is often divorced entirely from the cost of inputs, especially
in markets dominated by a few companies.

