Tax breaks are unfair
A country needs to have enough money to construct basic facilities. But recently, a news reported that the European Count blamed Ireland government forgiving Apple tax breaks for a long period of time and ordered Apple to pay the previous tax because Apple only paid a small amount of taxes or even no tax at all.(Bobkoff, 2016).In that case,whether government should offer corporations tax has caused worldwide concern,and most of people from different countries think tax breaks should be avoided in order to keep fair in global business.Therefore, it`s unfair to offer corporate tax breaks in global business because it`s not only wrong for countries to develop the native economy, but also have broken the International tax`s law and may cause some negative impacts inside companies.
The impact ofoffering tax breaks in one country will have a negative influence on developing other states’ economy.SinceIreland grantedcorporation tax breaksto Apple, other European states mayhave losta large amount ofeconomy output.Bobkoff, an editor of Business Insider wrotethat Apple develops its businessand gains benefitsin a countrybypresentinga few taxes and hand more profitto its headquarter.(Bobkoff, 2016). And this behaviorhas ledother European countriesfeelinguncomfortable because it effects theireconomy andbreakthetax’s flat-rate.A news reported thatevery nation wants to control theirfiscal policy.(Bobkoff, 2016) however, thereisno reason to grant corporation tax breaks.On the other hand,although,giving corporation tax breaks in Ireland promotes Americaneconomy,itaffects EU’s fairness.BobkoffsaysAmerica against EU`sjudgmentand there are two reasonsforprotectingnative companies and keepingthe taxing income(Bobkoff, 2016).Besides,America triesto improve its economy and escapesEU`s taxation law, whichhasbrokenthe fairness in global business. EU make the conclusion because this organization is not a revenue department to collect taxes rather thanit has some of the function which is keepingfairamongcountriesin Europe(Bobkoff, 2016) and protecting the integrity of the tax structure (The Economist,2016). In a word, Ireland gavecorporation tax breaks to improveitseconomy efficiency anddidnot consider other state`s development. Even though America agreeswith granting corporation tax breaks,ithas made an impact onthe EU`s fairness andhasbrokenthe lawoftaxing.
The biggest disadvantage of granting tax breaks is breaking the International tax law.The EU has the uniform tax rate and every country in this organization should respect the rules. If one corporation pay few tax, it would break the whole tax organization savagely (Shaxson, 2011). So the International law should be respected and not be broken. There are some examples to prove every people especially the head of a company not respect the tax law and the reasons why they did not observe. TheStarbucks’ financial executive evade the law and he explained thatthis isbecause he failed in his early business career. (Knight, 2012). What`s more, the company of Amazon have had a long time to escape the tax law because the header hasaproblem of stuttering and no way to appear the company`s economy to the finance bureau. (Knight, 2012). Meanwhile, the Google`s principal who assumes bravely and not express what the reasons to avoid the law. (Knight, 2012). From these examples, any reasons in escaping the law would not be permitted and thereis no reasonto pay few tax at the same time. From another aspect, there are some disadvantages about one country grantstax breaks. First of all, some repudiators told that the Ireland tax breaks attractedmany big companies to set up operation and led other countries worryingabout this situation. (Dalby & Scott, 2015). From this report, if a government grant tax breaks to one company, this behavior would affect the whole country`s tax or evenhas negative influenceonthe whole world`s tax. Afterwards, Ireland gives Apple tax breaks and make Apple achieve the benefit maximize (Holmes＆Thomas, 2016).In addition, Apple in Ireland handed over most of profits to the US headquarters, the move promotes America`s economy, (Phillips, 2016) but this behavior causedotherstatesto oppose. Finally, the individual tax is based on the corporation tax and if thegovernment giveacompany tax breaks, therewill bemore and more offshore corporation to escape the tax (Shaxson, 2011). Therefore, it is very important for companiesto tax legally and to respect the tax law.Besides, every country should know the disadvantage of tax breaks and should never breakthe International tax law.
There are some negative impacts of granting tax breaks inside the company. It mainly reflects the two aspects which are employment and income of local company. It shows that relieving the tax rate could not excite the company`s economy actively and may reduce the employment and income (Ljungqvist＆Smolyansky, 2016)Thisanalysishas shown thatthe variable of the employment and incomeishugebecause of the corporation tax rate. And even though there are disadvantages of granting tax breaks to company especially in the staff`s employment and income, the countries should tax fair.On the other hands, the influence of improving or reducing the tax rate inside the company would cause the different result. According to a report, changing in revenue is not stochastic but it is effected by the present situation of the economy. And improving the tax rate would reduce the employment and income. Furthermore, reducing the tax rate could not boost the economy. (Ljungqvist & Smolyansky, 2016). Thus, improving the tax rate appropriately have many positive impacts to the staffs but it not means the tax rate should be improved more. If the company`s tax rate is too high, there are some problems inside the company. Every enterprise would like to achieve the profit maximization (Holmes＆Thomas, 2016).And if the corporation`s tax increasesa lot, the staff`s salary and welfare would reduce at the same time. The US congressional Budget office reported that the majority of the taxation would be assumed by the staffs (Shaxson, 2011). So the most of the major company possess the wonderful welfare to recruit some good staff. The reason is that the big company have some privilege in taxing and the staff pay for tax less than individual peddler. However, itdoesnotmeanthe companycan evadethe tax. All in all, thenegativeimpact of granting tax breaks about the staff`s situationcanmainly be shownin employment and income. Whether reducingor improving, companiesshould taxreasonablyandstop avoiding paying taxes. Only in this way, could the company personnelpaytax legallyand respect the staff`s laws.
To sum up, it isterriblefromeach aspect to grant tax breaks and the most importantpart is that it isunfair to other countries. This behavior breaks the International tax law and has negative impacts. The most of reports, blog or even news agree with the EU`s conclusion whichisorderingApple to pay the previous tax and call on the tax fair. If the whole country has the same tax rate and respect the rules,there would be less argument. So every country shouldsee the bigger picture and think globally on economy issuesrather thanjustkeepdevelopingtheir ownbusiness.
Referencelist
(a) Bobkoff, D. (2016). What just happened to Apple, explained.［Online］.Available from:http://www.businessinsider.com/whatjusthappenedtoappleexplained20168.［Accessed:16/11/23］
(b)Ljungqvist, A & Smolyansky, M. (2016). To Cut or Not to Cut? On the Impact of Corporate Taxes on Employment and Income.［Online］. Available from:http://dx.doi.org/10.17016/FEDS.2016.006.［Accessed:16/11/24］
(c) Knight, L. (2012). Corporate tax avoidance: How do companies do it?［Online］. Available from:http://www.bbc.com/news/business20580545.［Accessed:16/11/24］
(d)Shaxson,N.(2011). 10 reasons we should tax corporations.［Online］. Available from:https://www.theguardian.com/commentisfree/2011/mar/15/taxcorporationstreasurylargecompanies.［Accessed:16/11/23］
(e)Dalby, D & Scott, M. (2015). Ireland, Accused of Giving Tax Breaks to Multinationals, Plans an Even Lower Rate.［Online］.Available from: http://www.nytimes.com/2015/10/14/business/international/irelandtaxratebreaks.html［Accessed:16/12/29］
(f)Holmes & Thomas, J. (2016). Analyzing a Proposal to Ban State Tax Breaks to Businesses.［Online］. Available from:http://rh5pp9fz2b.search.serialssolutions.com/?ctx_ver=Z39.882004&ctx_enc=info%3Aofi%2Fenc%3AUTF8&rfr_id=info%3Asid%2Fsummon.serialssolution.［Accessed:16/12/29］
(g)The Economist. (2016). The €13 billion bite. The Economist.［Online］.Available from:http://www.economist.com/node/21706238/print.［Accessed:16/12/29］
(h)Phillips, K. (2016). Apple Found To Have Received Illegal Tax Benefits, Ordered To Pay $14.5 Billion In Back Taxes.［Online］. Available from:http://www.forbes.com/sites/kellyphillipserb/2016/08/30/applefoundtohavereceivedillegaltaxbenefitsorderedtopay145billioninbacktaxes/print/.［Accesses:16/12/29］
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