It’s Not Companies That Should Pay For Government

A certain snigger here as the nations of the European Union tell the European Commission to stuff it over country by country reporting. All of which seems most sensible as the Trump Administration has dealt with the problem anyway in that last revision of the US tax code.

The complaint used to be that the large US tech companies weren’t paying tax anywhere. Now they do, in the US, so that’s all sorted then, isn’t it?

But we’ve still got an entire stupidity embedded in the not-thinking enough here:

It knows the EU is being played by a powerful group of US tech companies, from Google and Facebook to Microsoft and Oracle, that have grown quickly to be among the largest companies in the world without making much of a contribution towards the upkeep of the nations they sell to.

It’s not corporations who should be paying to keep governments. It’s the people who enjoy the benefits of those governments who should.

Sure, people who use the roads should be paying for the upkeep of the roads, that’s fair enough. Vehicle excise tax, fuel duty, that pays for that. The commercial courts? In England at least those wash their face from user fees. And so on. Equally, resource rents – Ricardian rents – should be taxed until the pips squeak and possibly more. No worries there, she’ll be right.

But to the general operating costs of the welfare state? Which is that bit left over after we’ve looked at all those user fees. Why? Why should the invention of search engines in California mean more money to be paid to single mother drug addicts in Workington? Sure, we can see that the people of Woking getting richer might be an argument for those in Workington getting a bung – we don;t have to agree, but we can see the argument – but that means taxing Woking, doesn’t it?

The basic argument that corporate profits should be paying for government doesn’t work that is. Especially as we get a nice chunk of tax from any of those within the jurisdiction who own these corporations.