Just a quick remark. Is corporate taxation a good or a bad thing? It depends on the situation. The U.S. government taxes corporations, but does not need to, since the USA does all its business, foreign and domestic, in US dollars. And since the U.S. government has no need or use for tax revenue, it is useless to tax corporations.
However most foreign nations need currencies other than their own in order to by imports. Such nations must tax foreign corporations – if they can.
The Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) will let corporations sue governments that do anything to hinder corporate profits, including the imposition of taxes.
Lawsuits filed by corporations are decided by secret “Investor-State Dispute Settlement” (ISDS) tribunals appointed by (and paid by) the corporations to deliver verdicts that favor the corporations.
This may seem like madness, but actually it isn’t.
It’s f—king insane.
Corporate taxation does not matter to the U.S. or U.K. governments, since they have no need or use for tax revenue – but (like I said) foreign governments need foreign currencies in order to buy imports. In fact, one of our most gifted and brilliant commentators has often asked why nations that have their own currencies are not like the USA. The brilliant genius spoke out from his corner and used Venezuela as an example….
The answer is that Venezuela’s currency is not widely accepted outside Venezuela. In order to buy imports, Venezuela needs foreign currency, since the people who sell to Venezuela do not want to be paid in Venezuelan bolivares. They want to be paid in US dollars or in euros or in their own currencies, or whatever. And since the price of crude oil is way down, Venezuela can only get foreign currency by borrowing it.
Another way to get foreign currency is to tax foreign corporations that do business on one’s home soil. However the TPP and TTIP will make this impossible for the 28 states of the European Union, plus the twelve nations that participate in the TPP.
Actually it is already impossible in many cases, because anti-tax measures are built into hundreds of “free-trade” agreements that currently exist
Multinational corporations have already sued at least 24 countries from India to Romania in tax-related disputes. To do this, they use their secret ISDS tribunals to deliver verdicts that always favor the corporations.
Thus, average people worldwide are being screwed by corporations worse than ever. And the nightmare will get much worse. Politicians worldwide are letting it happen, in return for modest bribes from the corporations.
In 2007, Vodafone (a British company) took over much of the telecommunications industry in India. Vodafone gained more than 180 million customers in India by using offshore companies that allows Vodafone to pay no capital gains tax to India. When Indian tax officials complained, Vodafone responded with an ISDS claim, arguing that India was breaching a trade treaty signed between India and the Netherlands in 1995.
As part of long-running legal proceedings that began in 2005, Mexico has been successfully sued by a consortium of US-based agribusiness giants, including
When Mexico taxed U.S. companies like Cargill and Archer Daniels Midland for selling soft drinks containing high-fructose corn syrup (which causes obesity), the U.S. companies took their case to a secretive ISDS tribunal, which naturally ordered Mexico was ordered to pay millions of dollars in damages.
Note: dollars, not Mexican pesos. Mexico had to dip into its foreign exchange reserves. And obesity remains a problem.
There are dozens of other cases – and the TPP and TTIP treaties aren’t even in force yet. Corporations are telling the world’s governments, “If you try to tax us, you will pay dearly.”
Multinational oil, gas and mining companies use ISDS tribunals more than any other industry. When Ecuador imposed a windfall profits tax on Perenco (an Anglo-French oil company), Perenco ordered its ISDS to assess a fine against Ecuador, once again in U.S. dollars.
The near future will be rather interesting. Sort of like having a root canal at the dentist’s office that never ends.