$5bn isnt going to balance Greece's budget. Setting aside the potential arguments defending Google (I have genuinely have no opinion on them or any of the other companies), a comprehensive law that requires every internet company to track every dollar by country and pay proportional taxes on their revenue could, in my opinion, severely cripple innovation in a continent that is finding itself falling behind at a global scale due to a variety of macro-issues. I like to give governments the benefit of the doubt that they won't do something silly like that, but then I look at this net neutrality issue and start to wonder.
Bottom line, there does not appear to be a consensus on this issue "morally" (for lack of a better word) which is why we're seeing such diversity of views on HN and globally. Just throwing it out there...
This 'reinvestment' is used to compete and drive profitable competitors out of business. This is an unfair practice. The result - no profitable companies, smaller taxable base and nothing for the taxman to collect.
The bigger the juggernaut, the more influence they have on the taxman ("but we're contributing to pay/income/property taxes - surely you don't want us to relocate abroad"). Large multinationals use their corrupting influence to strike sweetheart deals and use these deal-made tax savings to abuse the market even more.
Facebook isn’t anything new – maybe it adds 10% more value than MySpace would have had if Facebook didn’t exist in the EU. Maybe it adds 20% more value than the VZ Networks would have added.
You can’t just look at the entire value these companies provide, because local providers existed before Facebook and Google replaced them. Yes, Google and Facebook are overally more efficient, but only by a small amount.
Additionally, even if you say "don't care, if they leave we'll just build our own companies", now you are hamstringing the global growth of those companies.
(I'm just going to assume the companies that leave are not going to put your homegrown companies and people at a very serious technological disadvantage, which they might)
This is of course, why the EU wants everyone on the bus.
Disagree. Think about advertisers. A lot of products popular in the US are popular in the EU. When it comes to marketing the latest Hollywood blockbuster if they can't reach half a billion people through Facebook they'll go elsewhere. If half a billion people suddenly disappear from Facebook those people who have friends and family there will turn to other communication systems and Facebook may get used less and less.
Dangerous thinking? It was just an answer to a claim about the wealth they create as if they are exempt to be taxed because they create wealth.
> Over time, these companies will make infinitely more from developing nations outside of the EU than they would from the EU.
Over time, but I bet that any of those companies wouldn't trade the profit of one of the greatest markets in the world now for an hypothetical
> especially if the EU is taxing them heavily.
EU is not taxing heavily
They both have headquarters in Dublin.
So that's the reality they have to live with.
how many multinationals have left any big market just for taxation?
In other words, you are saying EU can deny its citizens right to buy foreign products ?
If Google do leave EU, all it will do is legal maneuvering. Nothing will change for EU consumers. They can still do Google searches and buy ads. Profit will stay the same.
Pulling off any presence in that market, offices, stores, etc.
> If Google do leave EU, all it will do is legal maneuvering. Nothing will change for EU consumers. They can still do Google searches and buy ads. Profit will stay the same.
No, because there is all of the burden of a company from outside the EU doing business with EU companies. And not talking about the restriction on data protection.
And don't talk about companies like Amazon or Apple with physical goods
How would EU calculate profit share between US R&D and Ireland R&D ? Even if EU do tax R&D, exodus of talent will be just 2x salary increase away.
You're joking, isn't?
Google left the US.
So did Apple.
In fact, are there any multinationals left in high tax countries?
When the heck did Apple and Google left USA?
> In fact, are there any multinationals left in high tax countries?
I think you're confusing where the headquarters are located with presence in a market
If yu're seriously saying that Apple or Goole have left USA and the EU you're really don't know what we're talking about
and servers are now homed deep under the sea.
If there's any problem with taxation any country can order its banks to not process payments to Google/Facebook. Tax authorities don't give a shit who hosts the citizenry's family photos. That's not what "operating in" a country means.
I would like how they do businesses, including Amazon and Apple if they leave the EU because the way you see it is totally wrong.
Starting with data protection directives and following with dealing with VAT, and EU customers
First, it is "big" when you consider how that money could be used. Cynicism aside about funding wars and filling walls with cash, it could be used for substantive (read: big) social good
Secondly, this is an important market. If they don't want to pay taxes, they have the legal option to not do business in Europe. So while you say "5B is small compared to 100B", I say "5B is a small price to pay for the billions they made."
Do you see any way to do that other than to prevent eu businesses buying ads from google?
Because i think that might have a few severe unintented consequences for businesses in the eu, and have exactly zero impact on google.
The only thing that would change is companies outside of the eu will burn through their ad budgets faster.
plus a whole (not quite so new) industry would emerge outside the eu bypassing the regulations. such as happened in China.
The old world order would very much like to believe they have dominion over cyberspace, but they do not and should not.
That would damage Google a lot more than it would damage the EU nations.
Those eyeballs will still be worth the same.
it will make as much difference to google use as the us copyright fine made to sci hub.
"you are the product"
Isn't this reverse-progressive taxation? If Facebook were outraged at paying taxes enough to shut up shop in Europe, wouldn't that 100B (or something like it) still be kicking around, just in different hands?