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Comment by po | Hacker News Reader

…at the expense of the rest of the world. If you built a perfectly legal way for companies to get billions of dollars of income into the US tax-free and all it requires is a holding company on your island, you can be sure that you're going to be a profitable little island in short order.

Do you really think they would still have the world's highest GDP per-capita income with a 0% tax rate if major international companies were somehow not able to exploit it?

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If the rest of the world was smart they would prevent that tax arbitrage by eliminating corporate income tax, and increasing taxes on corporate owners (shareholders) to make it revenue neutral. This would increase growth by preventing corporations from wasting resources on tax avoidance.

Why do you think wealth is a zero-sum game? Just because one country benefits economically means other countries have to lose? The pie is not fixed. It grows bigger when economies grow.

I don't think wealth is zero-sum. That doesn't mean that wealth cannot be transferred. In this case I believe that international companies and Bermudians gain and the average US taxpayer loses. I am more sympathetic to the average US taxpayer. I have no idea what the sum is.

You seem to be arguing against an idea of what I am saying rather than what I am saying. Let's just agree to disagree and leave it at that.

That's simply not the case because U.S. taxpayers can buy goods and services at cheaper prices. Sure, they might lose out on tax revenue, but their consumption -- and accordingly, standard of living -- grows because they can spend more on more goods. GDP grows as a result.

Learn some econ. Trade isn't zero sum under specialization, but that's not what's going on. This is just shuffling income around to wherever some shyster of a lawyer has figured out a way to avoid paying taxes while still enjoying the benefits of operating in countries where people and corporations do have higher tax burdens, and it is zero-sum.

I have a PhD in Economics, and any economist will spot holes in your argument immediately. It's not shuffling money around. When a country can produce goods and services at a lower cost, another country can buy those goods and services at cheaper prices. Thus, both countries benefit and their economies both grow as a result. This is simple, basic economics.

The benefit has nothing to do with trade, though. It happens simply because taxes are lowered. We could grow the economy in exactly the same way by just eliminating taxes on corporation A, without the corporation moving to Bermuda. Therefore, we may view the moving aspect as zero-sum.

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