Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan • Hacker News Board

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#311

Post by dahdum » Thu, Mar 22, 2018, 6:34 PM UTC

whb07 wrote: post #254

lovich wrote: post #121

Earlier quoted context omitted.

As a response to several people stating that free trade is better for everyone. I've taken economics courses, I understand how free trade is better overall. However, those calculations only work when both sides follow the same rules. Once you have different groups of people with different values, whether it's the EU valuing privacy, China valuing domestic production, or the US valuing intellectual property, absloute…

No it never breaks down. Milton Friedman commented some 30 years back to the typical "we should have higher tariffs on steel, because its unfair that the japanese are subsidizing their exports". His response? "Well that benefits the American consumer tremendously... we are sending them pieces of paper(dollar) and we are getting hard goods in return at a significant discount". If you think in in the absolute terms, wo…

It breaks down when near monopoly is established, which is often the goal of these government subsidization programs.

Whether that is acceptable depends on your opinion on global interdependence and national security. If the USA is dependent on Chinese and Russian steel to survive, it’s that much harder to defend against provocation. See EU and Russian gas for a great example.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#312

Post by dahdum » Thu, Mar 22, 2018, 6:38 PM UTC

barry-cotter wrote: post #213

andosa wrote: post #199

Earlier quoted context omitted.

Yes, they are still there, but the protectionism is what allowed the local companies (Baidu, Tencent, Alibaba etc) to compete initially and be better in the end. Whereas in EU, local competition has been crushed and it is now stuck with the monopolies.

Baidu is still not better than Google, even in Chinese, for what it’s worth. Infant industry protection may make sense in some cases but it’s more commonly used as a smokescreen for corruption. It was used as a justification for high tariffs and low quality domestically produced goods all over the world throughout the 50s to at least the 80s. If the EU doesn’t have much in the way of domestic IT companies so what? Th…

It makes the EU asymmetrically dependent, which is not a good position in a competitive world.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#313

Post by whb07 » Thu, Mar 22, 2018, 10:11 PM UTC

dahdum wrote: post #311

whb07 wrote: post #254

Earlier quoted context omitted.

No it never breaks down. Milton Friedman commented some 30 years back to the typical "we should have higher tariffs on steel, because its unfair that the japanese are subsidizing their exports". His response? "Well that benefits the American consumer tremendously... we are sending them pieces of paper(dollar) and we are getting hard goods in return at a significant discount". If you think in in the absolute terms, wo…

It breaks down when near monopoly is established, which is often the goal of these government subsidization programs. Whether that is acceptable depends on your opinion on global interdependence and national security. If the USA is dependent on Chinese and Russian steel to survive, it’s that much harder to defend against provocation. See EU and Russian gas for a great example.

ooh way late response! That is actually the opposite. Friedman also addressed that point. The case you are presenting is essentially "we shouldn't rely on foreign XYZ too much, we should have our own manufacturing".

Well sure we should have our own if its able to compete freely. But its never been the case that if we go to war with China, the Japanese/India/whomever couldn't start producing more steel and selling it to us. Sure it might be slightly more expensive but it wouldn't paint the picture that you are proposing. If anything MORE producers of steel would pop up willing to sell at a higher price. Crazy theres this thing called supply/demand.

As for the EU/Russian gas example, Russia isn't the biggest producer of gas in the world. According to wiki[0] its the U.S, there are other non-Russian actors in the top 10 list who I'm sure would be willing to provide gas at a higher price.

As to why you mentioned EU/Russia is that Russia so happens to have a nice giant pipeline ready to provide gas into the EU. Well...last I checked there were millions of barrels of oil being shipped globally by ship. Would you have to pay a bit more for energy ? Sure. Is national security critically dependent on Russia ?

No, because I guarantee you if Germany started paying $200/barrel of oil(or natural gas/whatever) all the oil ships around the world would reorient themselves to deliver to Germany. Crazy world called supply/demand. You now have near infinite suppliers.

[0]https://en.wikipedia.org/wiki/List_of_countries_by_natural_g...

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#314

Post by dahdum » Fri, Mar 23, 2018, 2:34 AM UTC

whb07 wrote: post #313

dahdum wrote: post #311

Earlier quoted context omitted.

It breaks down when near monopoly is established, which is often the goal of these government subsidization programs. Whether that is acceptable depends on your opinion on global interdependence and national security. If the USA is dependent on Chinese and Russian steel to survive, it’s that much harder to defend against provocation. See EU and Russian gas for a great example.

ooh way late response! That is actually the opposite. Friedman also addressed that point. The case you are presenting is essentially "we shouldn't rely on foreign XYZ too much, we should have our own manufacturing". Well sure we should have our own if its able to compete freely. But its never been the case that if we go to war with China, the Japanese/India/whomever couldn't start producing more steel and selling it…

Given time industry would adapt, but the impact can be devastating in the short term. EU gas dependence was and still is a big factor in the annexation of Crimea and politics across the region.

The BBC reports that this dependence is still growing, further tying the hands of the EU against Russian aggression.

Now if Russia itself was just another western style free market democracy, dependence wouldn’t be such a national security risk.