These EU countries use a different tax structure altogether, often relying on value added taxes or taxing at the point of sale. The U.S. could cut this country shopping nonsense out altogether by simple adopting a similar tax structure. U.S. corporations are doing what they should do to take advantage of the differences.
Here is Switzerland's tax structure: http://en.wikipedia.org/wiki/Taxation_in_Switzerland
And here for comparison is Austria's: http://en.wikipedia.org/wiki/Taxation_in_Austria
Income tax, were it exists, in Europe tends to be steeply progressive, whereas the U.S. income tax was revised from steeply progressive to somewhat regressive during the 1980s. Generally speaking, tax structure reflects the relative political power of those taxed, but it is influenced as well by cultural differences.
I'm not proposing anything. Just pointing out why it may be advantageous for a U.S. company to operate from abroad to take advantage of tax structure. If the U.S. wants to compete in terms of corporate taxation, the U.S. might have to revise its tax structure. It is not a matter of the level of total taxation, it i s a matter of the tax structure. The overall direct plus indirect tax rate in the U.S. is similar to the overall tax rate in Europe, once the indirect inflation tax is accounted for, but the sources of tax revenue are quite different, as are the distribution of government expenditure. The Europeans, for example, heavily subsidize ground mass transit, whereas the U.S. more heavily subsidizes highways and air transport. The U.S. subsidizes its defense industry directly via government contracts, paid to a significant extent via indirect taxation through inflation and via foreign aid. Much of U.S. foreign aid comes back to the U.S. in the form of defense contracts. In Europe, on the other hand, total defense expenditures are a tiny fraction of U.S. expenditures, and they instead put their money to work in other sectors of their economies. Industry and agriculture are heavily subsidized both directly and indirectly in both Europe and the U.S. In Europe education is more heavily subsidized by government than in the U.S. This is what I mean by tax structure: similar total taxation but different sources and distribution. I am not saying one is better than the other, not here anyway, because that depends entirely on ones point of view.Why would you want to become more like the EU economically?
Makes no sense to me to try to emulate the Eurozone when they've had structural unemployment over there for decades now and a lower median household income.
I'm not proposing anything. Just pointing out why it may be advantageous for a U.S. company to operate from abroad to take advantage of tax structure. If the U.S. wants to compete in terms of corporate taxation, the U.S. might have to revise its tax structure. It is not a matter of the level of total taxation, it i s a matter of the tax structure. The overall direct plus indirect tax rate in the U.S. is similar to the overall tax rate in Europe, once the indirect inflation tax is accounted for, but the sources of tax revenue are quite different, as are the distribution of government expenditure. The Europeans, for example, heavily subsidize ground mass transit, whereas the U.S. more heavily subsidizes highways and air transport. The U.S. subsidizes its defense industry directly via government contracts, paid to a significant extent via indirect taxation through inflation and via foreign aid. Much of U.S. foreign aid comes back to the U.S. in the form of defense contracts. In Europe, on the other hand, total defense expenditures are a tiny fraction of U.S. expenditures, and they instead put their money to work in other sectors of their economies. Industry and agriculture are heavily subsidized both directly and indirectly in both Europe and the U.S. In Europe education is more heavily subsidized by government than in the U.S. This is what I mean by tax structure: similar total taxation but different sources and distribution. I am not saying one is better than the other, not here anyway, because that depends entirely on ones point of view.
I have said repeatedly in these forums that there is plenty of money, but it is a matter of what you do with it. I stand by that. It is also easy to see why the tax structure in Europe may be more favorable, or less, from a corporate point of view.