Good. I don't understand why companies need to be bribed to come to markets. Want to sell your goods, great, pay the same taxes every other company pays. This is nothing more than government subsidies for specific private companies.
The problem is that countries refusing to compete with each other doesn't actually help all of them. Countries like Germany have strong infrastructure, high availability of qualified labor, etc. If Romania had the same taxes as Germany then who would expand into Romania?
And of course taking taxes off the table would just shift the issue to spending. If you required countries to have a uniform (presumably high) tax rate then they could just spend the money on things that encourage companies to expand there and you're right back to the same situation.
Countries compete with each other to attract capital. The only way to stop that is to prevent the movement of capital across national borders, which is a completely unrealistic bad idea.
Taxes are far from being the most meaningful factor, and governments dumb enough to offer such deals are acting disgracefully towards both their tax-paying citizenry and their EU partners who don't engage in this race to the bottom.
Of course there are many factors that go into it. What matters is how the country stacks up on balance.
Countries that stack up unfavorably have no financial capacity to address their shortcomings because you can't build infrastructure or education with no money and governments can't collect money with no tax base. What they can do is lower taxes to attract investment so they can get 5% of something instead of 30% of nothing.
Their primary alternative for attracting investment is to abandon safety and environmental regulations, which is not better.
They moved their plant from Germany to Romania, got the "Company of the Year" award from the Romanian government and about two years later moved the factory again to an Asian country.
In the process they got two angry governments and now they are as they are.
While I don't fully understand the case with the Romanian plant and why it was shut down so soon, what Nokia is now has little to do with their plant management strategy (except that I think it was efficient as long as plants were needed) and everything to do with senior management's product decisions (not production management).
(FWIW, Nokia is currently a profitable company, just not in the phone terminal business.)
Ah, the tactical decisions. "We're not retreating, we're just advancing in a different direction."
Nokia's downfall was due to software issues, and certainly had nothing to do with improved efficiency thanks to production optimization.
Which itself was held at gunpoint by Moloch[0]. That's how it works - everyone has to play and lose because those who don't play lose first to those who do.
[0] - http://slatestarcodex.com/2014/07/30/meditations-on-moloch/
AMD got to save money on the fab, Germany got long term economic investment in the former east. It was pretty much a win-win deal.
Turns out you don't need very many people to run a water bottling facility of this nature and most of it is automated.
I've heard similar for data centers. Huge tax breaks believing they'll bring in a lot of jobs. People in town train hoping to be employed. Maybe 50-100 people actually required.
Places need to do a better job researching how much job creation is actually going to come out of this tax breaks and subsidies.
This is the very point of EU, so if we don't want that to happen, isn't the most logical step to disband EU immediately?
The EU can't work without US-style federalism and the erasure of national identities. So yes, it probably should be disbanded.
Edit: or at least abolish Luxembourg, which is a stupid statelet left over from the treaty of Utrecht: http://ftalphaville.ft.com/2015/10/21/2142483/the-case-again...
It makes no sense to scrap the only hope for shaping Europe in a consensual and constructive way just because it isn't perfect yet. Otherwise it's national interests against national interests once again.
EU collects about 0.3 % of VAT revenue of each country, and about 0.7 % of GDB of each country as a membership fee (which is the largest source of income).
EU also keeps most of the import duties levied on non-EU products.
http://europa.eu/about-eu/basic-information/money/revenue-in...
These deals however just don't appear to provide any benefit to the areas affected, only to the companies. Is there a big pool of political contributions in countries like these? Do they have the equivalent of PACs and such?
That's not really the issue. The issue is that these were tax deals done behind closed doors between government and businesses rather than the government creating a tax policy for all that is transparent and applied uniformly and fairly to all businesses, they created a tax policy for all except a handful of companies that could get private deals.
And that usually leads to bad results after a while. Yes it makes sense to have tax policy that treats different businesses differently. And it makes sense for there to be some flexibility and to be able to negotiate on certain things in a transparent and fair manner (e.g. a business 'negotiating' over whether it applies for a sustainable energy tax benefit if it invests in a new green energy tech that happened to fall outside of the parameters of the sustainable energy programme the government created a few years ago when said tech didn't exist, there's some flexibility there to expand the programme for that particular company that makes sense. Such a negotiation fits with the aim of the tax programme, is transparent and will affect everyone equally who applies for it afterwards).
But simply negotiating some special tax rate just for you that doesn't apply to anyone else, in a backroom deal that isn't officially known to anyone else, that's shady and corrupt, the kind of practices you expect from poor countries struggling with institutional development.
How you actually spend the money (e.g. to improve the area affected) is another topic altogether. But in its first principle these tax deals made no sense.
If there is a favourable tax agreement for Starbucks in the Netherlands as a result, then there is no longer a level playing field between Starbucks coffee shops and others.