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Comment by sjehay | Hacker News Reader

Incentives are generally designed to attract inward investment and job creation, rather than to persuade companies to sell into the market (i.e. please set up your factory/European HQ here, regardless of where you're actually going to sell most of your goods)

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I've seen cities near to me get burned by this. There was a water bottling plant that got a lot of subsidies and tax breaks from a nearby city believing that it would create a lot of jobs for locals.

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.

Believing, right. I'd bet most of those decision makers has a strong belief that they'd get a good kickback.

Why should factory or headquarters be where the goods are sold? The whole point of EU is free movement of capital, goods and manpower. Farms are where there is fields, sun and irrigation; factories are where there is raw material, logistics and energy; headquarter functions are where there is capability to handle legal and financial questions. Goods and services are sold where there is customers.

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 is in the strange semi-state - in some ways united, in others still a set of separate nations. This ain't different than the states in the US - they compete for private investments too.

"free movement of capital, goods and manpower": but not taxation. There's no real counterbalancing mechanism to the downsides of such movement.

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...

"US-style federalism"? The politics and $1B+ in tax breaks and perks paid by Nevada to get the Gigafactory say otherwise.

There's still Federal taxes which get paid, and distributed out to the states. Whereas there is no "EU" tax that gets distributed to the member states.

EU levies "EU taxes" to its member countries and then distributes part of the money back. It doesn't collect these taxes directly from EU citizens, but that doesn't mean the tax incidence wouldn't be on citizens.

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...

Historical processes take their time. The old ways of working in Europe don't solve these taxation issues either, on the contrary. So let's move forward instead of backwards!

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.

The US is worse of in this regard. The EU has rules about state aid that the US doesn't. In the US, states give enormous tax breaks to companies to set up a factory in their state. In the EU that sort of thing is illegal.

Exactly. And since many countries compete for a corporation to set up business on their soil, there's a race to the bottom of tax exemptions and other concessions.

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