Our concern is that when individuals and corporations “shop around” different countries for the best tax deal, this puts pressure on governments all round the world to lower their tax rates, which results in an ever-dwindling proportion of profits going to governments to spend on schools, hospitals and public services.
Yes, that is the point of tax competition.
Imagine that you couldn’t bugger off and take the deal on offer elsewhere?
Imagine, for example, that there was only one baker in the country. It’s bread on their terms or no bread at all. We all do understand that we’d end up with expensive shitty bread in such a situation.
Or if there was only one employer in town, like say one of the old company towns. We know that the jobs on offer would be badly paid shitty ones or you get to starve.
There’s even a word economists use to describe this situation: monopoly.
We know that monopolies give shit service at high prices. Why they do this is simply because they can.
And the same is true of governments: monopoly, the inability for people to fuck off elsewhere, means high prices and shite goods and services.
Tax competition, the ability of people and companies to choose among alternative deals is thus a good thing. Just as a multiplicity of bakers or of employers is a good thing.
Do note though, even while Art Uncut have managed to identify the point, they manage to get the meaning of what they’ve identified completely wrong.
But then that’s arts graduates for you, eh?