Ummm....Romania is part of the EU. It and Bulgaria have been EU members since 2007. What Romania isn't is part of the Schengen treaty and in the Euro-zone. — ssu

I apologise. I mixed up Schengen Treaty and Euro-zone with the European Union. There are many organisms that I tend to confuse which countries are part of all of them, and others just in some.

I guess the main issue regarding the ban to Romania of joining the Schengen Treaty is related to immigration then.

With corporate taxes and wealth taxes one has to understand that money can move around easily and if these taxes are really punitive (let's say 75% to 90% tax on profit), people simply won't sell and wait for the taxes to be lowered while corporations can also postpone profits. — ssu

Exactly.

There is another problem with punitive Corporation Tax: companies leaving out the country where they were established. Sooner or later, if they see that taxation is heavy, they would establish their quarters in a more attractive country regarding the Tax policies. On this specific issue, there is also a huge competition among the states which some attract foreign investment while others don't.
We can assume that the countries with punitive taxation have the risk of "losing" GDP if their companies or entrepreneurs decide to fly out to a country with low taxes.

Is this ethical? To "steal" the headquarters of companies of some countries because the taxes are low? There is always this kind of debate...

Is this ethical? To "steal" the headquarters of companies of some countries because the taxes are low? There is always this kind of debate... — javi2541997

As this is a philosophy forum, let's think about this from the beginnings and from the theoretical approach, not so much as from the legal approach.

First, what is a company or a corporation?

A company or corporation is just a pile of advanced permanent contracts, yet you could simply buy as a customer every service and every item you need basically on a one-to-one basis. Now only every service you buy is done by a fixed contract and hence the person you are buying the service is now called the company's employee. Then the company itself, can own machines, real estate etc.

Hence with taxation the question is how this entity is taxed and do you tax the company or it's owners. But notice, a lot of taxation happens where the actual work is done and were the products or services are bought: taxation of the employees wages, the value-added-taxes and so. We have to remember that the average margin profit of companies (for example in the US) is 7,5%. That is far less than people actually think companies make profits. But that lets say one tenth is what we are talking about. Yet we shouldn't forget the nine-tenths too. Also, the real economic impact happens there where the physical manufacturing or service happens.

So is it ethical to move away your corporate HQ to avoid corporate taxes? Well, I think the question is if tax havens are ethical. And tax havens are created by government, starting from countries like the US and the UK. And since for example Ireland has profited well from having low corporate taxes, then this competition between countries is simply going to be a fact. Luckily not all corporation / companies prioritize low taxes or paying no taxes when it comes to where they put their Company HQs. It's still a legal gimmick, which could be easily change and it doesn't create confidence in a company when the owner is a postbox in the Bahamas etc.

I agree.

I understand that this debate is far from the legal frames. In the EU, it is completely allowed to change and move the HQ to any country of the Euro zone. Some states have lower corporate taxes, others high. I fully respect it. Who am I to say to Hungary or Ireland to switch their tax policies as well as Germany or Spain? It is true that one of the main aims of the European Commission is to reach a common tax policy, but this will be one of the toughest tasks to be done. I am even skeptical and I do not think that is available. Here also pops up the classical breach between north and south. If we say:"hey let's raise the Corporation Tax to collect more and expend," maybe the north-centre countries would say: "here we have the Mediterranean countries spending a lot instead of managing the budget wisely."

The debate will still be there. Which I find fascinating and I do not understand why the people of my age (millennials', I am 26) do not care that much when it is clearly a topic that we have to focus on.

On the other hand, I do not know if tax havens are ethical, but I understand that it is the only way to survive in globalisation. What can Andorra or Bahamas do in a complex system of transactions? They need to be attractive to attach foreign investment. But, to be honest, I do not consider them a real problem because they are tiny territories, so it is very easy to be a tax haven with small population groups. The real question is how to manage the public budget when there are millions and millions of people in the same nation.

I don't think we would have a big impact if we block transactions and international market in Andorra as well as our governments have done with Russia.

It is true that one of the main aims of the European Commission is to reach a common tax policy, but this will be one of the toughest tasks to be done. — javi2541997

The EU is a de facto confederation of independent states, which desperately tries to be an union. Perhaps something similar to the US by some visionaries in the EU. But everybody knows that isn't going to happen.

I don't remember if it was with you, javi, or some other Spaniard, that we talked about how simply different is the geostrategic security environment of Finland and Spain. For Finland the security threat is Russia, Russia and Russia... , but for Spain it's how narrow the strait of Gibraltar is and North Africa with all of it's problems is the real security issue (as Spain even has Ceuta and Melilla in the other continent). And I guess both Finnish and Spanish authorities totally understand these differences between them. Yet that's just the tip of the obvious iceberg. And when it comes to a "common tax policy", I think "common EU defense policy" might be far more easier to plan and to get everybody behind it.

On the other hand, I do not know if tax havens are ethical, but I understand that it is the only way to survive in globalisation. What can Andorra or Bahamas do in a complex system of transactions? They need to be attractive to attach foreign investment. — javi2541997

Remember it starts from places like the City of London and the tax havens inside the US. Trade is good, it does really create wealth, yet we must understand just how fragile globalization is too. Tax havens are perhaps an annoyance, but getting rid of them, what else do you throw out with the bathwater?

And globalization can stop rapidly. War between the US and China and that's it: the end of present day globalization. And UK's experiment with Brexit shows just how much our wealth and prosperity is based on EU membership and how difficult it is to opt out of the system. But what will remain sovereign are the nation state members of the EU. And they'll have different tax laws. That's a fact in my view.

There are lot of millionaires that don’t want to pay taxes — javi2541997

Not really accurate. People, even those who argue for taxes, generally don't want to pay taxes. It's just that millionaires or billionaires have the means to organize such a tax evasion. If I were to do that on a normal income, I would have to pay a lot to manage such a transactional flow that avoids taxation.

I find the entire "eat the rich" movement today rather hypocritical. It makes sense when it comes from actually poor people, but today there are a lot of people with decent incomes who lives by some kind of false identity of being poor and fighting the rich has become their "blame it on those people" output. The fact is, however, that almost all of these people would behave just as bad or even worse if they suddenly became a billionaire. Because they will use their new money as some kind of ironic further argument to the rich with a message that the rich can't touch them anymore because they are now rich themselves.

The bottom line is that it's not the difference in income or wealth that matters, it's that people are generally ignorant about their own hypocrisy. People project an image of their identity as morally superior, but when they, themselves, are within the group they fought against, they change to justify the same behavior they previously criticized. Sometimes they even behave much worse, becoming the worst kind of wealthy people in the world.

Here is where the debate starts: is profitable paying taxes? Then, if it is, is the problem that State do not how to administrate it? — javi2541997

First, a nation/state, need to have a taxation system that makes sense and isn't corrupt. Most examples made by people arguing against taxation usually just argue against corruption and stupidity among the people handling tax money and public funding.

It is very important to separate taxation as a system with the problems of corruption and stupidity/incompetence. Many people against taxation frame the problems of corruption and incompetence as an integral problem to that of taxation as a system, which is obviously a false connection.

The truth of the matter is that high taxation is actually the best way to improve the living quality of a nation. For instance, conservatives who remember the best time to live in the US (for white people), usually mention something like 1950-1970. This era had a taxation level around 90%. But people can't seem to fathom this, and yet it was crucial in order to boom the economy and living standards after world war II.

Then there's another big reason why we find high taxation nations at the top of the list of living standards and living quality. It's because they are simultaneously low in corruption. The Nordic nations of Island, Norway, Denmark, Sweden and Finland have always been in focus when it comes to high taxation and living quality, but they are also very low in state corruption.

If there's less corruption, with higher taxes, that means the money actually goes to society. In that position, the people actually reap the benefits in the form of free education, free health care, free infrastructure, instead of that money going into the pockets of the corrupt.

The biggest problem that we face in the Nordic nations is not so much corruption, but rather incompetence. An irrational level of red tape bureaucracy combined with a lack of vision and competence in planning can create a spending spree on projects in society that does not have enough relevance or need. This may provoke people into blaming things on high taxes, but in truth, it is the incompetent of the people at the helm that's the problem.

So, if these criteria are met it will generate a truly good place to live in:

- High taxation
- Low or no corruption.
- Competent people with less red tape
- An educated and carefully thought through vision of tax spending.

Tax should go back to the people and as long as each and every penny funds something that benefit the population and society as a whole, it is good to have it high.

It is also an illusion that high taxation means less profit. Profit can only be generated by the company as a whole and the company is made up of the employees more than the owner. It is a classic master/slave dichotomy, in which the "slaves" know more than the "master". If the workers are the fundamental part of profit generation, then the best way to generate more profit is to make sure the workers ("slaves") have a good life being workers. The best way to do this is to outsource these benefits. Instead of you, the owner of the business, having to manage and fund time to take care of each and every employee, society can manage it through tax funding. So with higher taxes, you, the owner, benefit from having a society that funds workers happiness through free education, healthcare etc.

That is something many rich people don't seem to understand. That if people who can't afford the privileges of the rich, still can afford the necessities of a foundation for a good life, then they will happily be the workers for your business.

It is only when we treat the workers like shit, as a society and as a company, that we lose money and profit. Because not only does the workers have less income, they have more stress because they need to actively think about healthcare and schooling for their children, they need to actively worry about losing their home and screwing up their entire family. Do owners really think that their workers would care for their work quality if they had all that extra baggage with them when going to work?

This equation is almost infantile in its logic, but people still don't seem to grasp how simple this balance is. The bottom line is that happy workers generate profit, and having society making workers happy is much easier than the company trying it. So why would any capitalist oppose high taxation? That's a foolish stance that only the most privileged rich morons would support out of their inability to understand anything other than their rich lifestyle.

High taxation leads to a better life quality. It requires low corruption and competent national economy planning, but there are no statistics that shows anything other than this conclusion. The ones opposing this does not act out of logic and knowledge, but out of ideology with a lack of interest for what is good for the whole and more what is good for themselves.

When the abolitionists came after slavery there was no shortage of beneficiaries who extolled the benefits of slavery. No doubt slave labor generated a better quality of life for those who profited from it, but some of those defenders even claimed it led to a better quality of life for the slave. In the US, some argued Slaves were better clothed, protected, fed, than their free brethren, who had no such institution to rely on.

The same sort of utilitarian arguments defend taxation, leaving the morality out of it. The point is: the benefits of taxation can only ever serve to mask the evils of the entire enterprise. It is exploitation on a mass scale. It is forced labor. It is theft. If exploitation on a mass scale, forced labor, and theft leads to a better quality of life from those who benefit from it, it’s not worth it.

The point is: the benefits of taxation can only ever serve to mask the evils of the entire enterprise. — NOS4A2

Taxation to provide for the collective defense is evil? How else would you fund a military?

It’s evil to take people’s property and force them to labor for your benefit without any just and voluntary compensation. Do you think there is there no other way to fund an enterprise without this method?

It’s evil to take people’s property and force them to labor for your benefit without any just and voluntary compensation. Do you think there is there no other way to fund an enterprise without this method? — NOS4A2

In the kingdom of NOS4A2, what would your military look like? How would you fund it?

I wouldn’t. But a moral means to funding anything is through just and voluntary transactions.

I wouldn’t. But a moral means to funding anything is through just and voluntary transactions. — NOS4A2

Is there any country on Earth that funds it's military that way?

Militias, private militaries, security contractors.

Militias, private militaries, security contractors. — NOS4A2

Paid for through voluntary donations by the people?

Voluntarily paid for by those who purchase the services, sure.

Voluntarily paid for by those who purchase the services, sure. — NOS4A2

Has there ever in history (or now) been any decently sized country that has run their military that way?

There isn't any nation that does so. Icelandic and Costa Rican police do get their pay through taxes.

Interesting points.

Note that I didn't deny the existence and validity of taxation. It is obvious that our nations/governments need to collect to provide the basics. This is not something new, and even the Roman Empire already worked with those. But the act of taxation itself is complex. It is not a perfect machine where you put a lot of money into the public budget and then you get quality services. This doesn't work in every state, sadly. It is worthy to look at East European countries. Despite the fact that they are making a big effort regarding tax policies, the public administration itself is still opaque, corrupt and the use of bribes is very common. So, even though taxation is a good tool to provide public services, it cannot be applied to every country. You cannot go to Lebanon and say: "hey if you you promote taxation maybe your country's functionality wouldn't be too backwards"

On the other hand, what is the real amount of high taxes? Can all the employees or businessmen bear such big taxation?
Let me explain myself: The incomes here in Spain are pretty low and maybe one of the lowest among the EU members. Yet, the Income Tax is pretty high to be honest... 19 % of an annual income of 12.450 € goes to taxes. From 35,200 euros to 59,999 euros, a 37 %. From 60,000 euros to 299,999 euros, a 45 %. 300,000 euros and above, a 47 %. According to these facts, it is clear that I live in a country that doesn't like rich people or families with decent salaries. I call this expropriation. (Note that I only referred to Income tax but there are a lot of different types obviously).

Although I agree with your formula and argument of high taxes + zero or low corruption + competent + careful spending, these are difficult to apply in every EU member. I fully believe that this works in Sweden, Finland, Denmark and Norway, but not here. It is sarcastic when our Treasury Ministry says that rich people should make a plus effort in this difficult times of public expenditure. Are we so? We are not in a position to demand high demands when our economy is fragile.

We have an average of 42 % tax pressure on our incomes and I do not know where all the profits go.
Oh yes... We are a highly-debted country because of the incompetence of our politicians. We are literally forced to pay taxes to reduce the debt, not for better services.

Has there ever in history (or now) been any decently sized country that has run their military that way?

I’m not sure. Is the absence of something an argument against something, in your eyes?

There isn't any nation that does so. Icelandic and Costa Rican police do get their pay through taxes.

Yes, governments everywhere run protection rackets.

I’m not sure. Is the absence of something an argument against something, in your eyes? — NOS4A2

Yes. The absence of a non-tax funded military for a sizeable nation suggests it's not doable. Why do you think it's never been done?

States have historically begged for, borrowed, or stolen money to fund wars. War bonds, donations, money-printing, slavery, conscription, economic revenue and other methods besides taxation have been used by governments to fund militaries. So it has been done.

War bonds, donations, money-printing, slavery, conscription, economic revenue and other methods besides taxation have been used by governments to fund militaries. — NOS4A2

Those methods have been used ON TOP of taxation.

So?

So there has [ETA: never] been any nation that has not used taxes to fund militaries. Why is that? What's your theory? Mine is you can't fund militaries without taxes, not for a nation of any significant size. It's not doable without taxes.

Yes, governments everywhere run protection rackets. — NOS4A2

Obviously. If it wasn't for them, then you surely would have genuine protection rackets being run. At least in the long run.

Actually this would be an interesting topic, because usually if the police for some reason doesn't work, then people will quite easily form vigilante groups and militias. I think it's an universal thing and will happen quite quickly if there is no police to call. But it isn't formed like a business transaction (meaning you pay for the service, just like you pay for an electrician or a doctor), but starting with fellow minded people who have something to protect. It tells a lot about the society how "the police" or call it anyway you want is formed in the society.

So there has been any nation that has not used taxes to fund militaries. Why is that? What's your theory? — RogueAI

Organized violence and protection against other nations and states is the first actions that nations need to organize and fund for their own survival. Every nation now has been formed from another prior nation (or more) and the violence between nations is as old as history. That's the first thing. Now, if you really outsource this and pay for instance mercenaries for this "service", it's likely that you will end up with the mercenary leader (or other country) in control of your nation. City states in Italy in the medieval times had many instances of this happening.

That's my reasoning.

So there has been any nation that has not used taxes to fund militaries. Why is that? What's your theory? Mine is you can't fund militaries without taxes, not for a nation of any significant size.

My theory is that governments need to plunder their populace to sustain their activity because they do not have other means to do so. They possess the monopoly on violence, and therefor criminality, so it is indeed a point of fact that they will use the spoils of their plunder to finance their wars. None of this is evidence or an argument that it cannot nor should not be otherwise.

My theory is that governments need to plunder their populace to sustain their activity because they do not have other means to do so. — NOS4A2

Or simply the payment for the services they provide is called taxes.

They possess the monopoly on violence, and therefor criminality, so it is indeed a point of fact that they will use the spoils of their plunder to finance their wars. — NOS4A2

You are intentionally dropping crucial things here that the sociologist Max Weber pointed out.

In his definition of a state, it is a "human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory". Legitimacy comes from the acceptance of the people, and behind a state is a human community. Not some others like zombies who make up the government, who somehow aren't part of the people.

Yet perhaps for an individualist liberal, it's hard to fathom people functioning as a community, but it does happen.

Yet perhaps for an individualist liberal, it's hard to fathom people functioning as a community, but it does happen. — ssu

You've got this backwards.

The reason classic liberals argue for a smaller state is because they assume people can take care of themselves, without the need for state coercion. It's the statist who believes people must be coerced into 'functioning properly'.

The reason classic liberals argue for a smaller state is because they assume people can take care of themselves, without the need for state coercion. — Tzeentch

I think the we all should take care more about ourselves. The State is not our parents, and despite that maybe such functionality is only available in small countries, we should expect more individual behaviour and responsibility.

I can take as granted that the Police and Defense are needed to be managed by a public administration. But, transportation and expenditure (for example), could have an equilibrium of both private and public sectors.

The reason classic liberals argue for a smaller state is because they assume people can take care of themselves, without the need for state coercion. — Tzeentch

The classic liberal starts from the individual, for example from the rights of the individual. Yet people function as members of a community and members of families. Here it's the communities that take care of themselves.

When states stop functioning, people don't panic and start fighting each other as individuals especially when there is a community that they belong to. If there is no community, absolutely no social cohesion whatsoever, only then people will start to behave like it's a dog-eat-dog World. But usually that doesn't happen, especially not in communities that do have social cohesion.

This makes security so different from the other "services" we buy and it's wrong to assume that "safety" is similar to buying any other service there is a supply of.