Here's the thing:
Fines are a fast and easy political win against these "evil foreign tech giants". Just like rent seeking.
Bootstrapping an ecosystem capable of spawning and growing global market leaders is hard. And it would require some very unpopular measures.
- Weak/Non-Existent non-compete
- Make it easier to hire and fire employees
- Competitive approach to retaining talent
- Lower tax rate for tech companies instead of endless government grants/subsidies
The last one in particular is critical. In some EU countries, you can already justify your 5th employee's complete salary having a dedicated "accountant" whose only job is to apply for government grants.
So in short France is supposed to abolished everything that actually makes the country.. French?
It's simply a stupid idea to try to emulate the US. The world doesn't need more gigantic global conglomerates which are largely built on homogogenous large domestic markets with unified languages to scale up (hence the dominance of China and the US).
Countries like France, instead of dumping taxes or eroding worker rights, should focus on small business and human scale technology. Privacy, encryption, protocols rather than platforms, open standards, open source, healthy and diverse ecosystems rather than growth. Switzerland is the example to follow, not the US or China.
It has never been easier to operate in multiple languages, and technology will make this even cheaper in the long run.
The real barrier to having a wide unified market for Europe to grow it's ecosystem is having N jurisdictions with laws that are incompatible with each other.
This is something the EU is working on, which will hopefully get better in the future. (Hopefully including EU-wide worker protection, consumer protection and tax laws)
> The last one in particular is critical. In some EU countries, you can already justify your 5th employee's complete salary having a dedicated "accountant" whose only job is to apply for government grants.
Your argument is that government grants are bad because they cause some moderate buerocratic hassle?
> Your argument is that government grants are bad because they cause some moderate bureaucratic hassle?
There's nothing moderate about it. Think about the amount of paperwork required so that someone is spending 35h/week working on it. And we're talking about a 5 people org. All that to claim tax credits the company will maybe get next quarter. As opposed to a US startup that pays way less tax and can just hire the engineer they need as their 5th employee. Which one is getting a head start?
And on the other hand, all these programs are administered by an army of bureaucrats, all paid with a cushy pension fund.
It's a great job program for bureaucrats, not so much for startups!
They are writing special rules to specifically rent-seek a list of companies. It's a short term political gain.
What they should do instead is if they don't like the existing legal framework that enables companies to pay taxes in an other European jurisdiction, simply re-write that.
Rent seeking is an interesting point, since every tech giant is basically a rentier in some form. The path to billions in revenue is to control eyeballs, marketplaces, platforms, without ever strictly selling it away.
Rentierism is fundamentally unproductive. If you're a keynesian, a rent is literally the excess that can be extracted due to some market inefficiency, and the flood gates should release a million competitors into the market.
Clearly this isn't what is happening. I'm okay with taxing rentiers for the regulatory protection they rely on to protect their monopolies.
Germany has the right idea. All countries should ensure data and operational sovereignty of critical tech companies.
Then when one of them misbehaves a leaf can be taken from the American play book, and said company will simply be seized by the government and handed over to a trusted sovereign entity for operation going forward.
It’s context for the general philosophy of the French government.
My guess is that people who know nothing about French politics would be surprised by this, imagining that most countries in Europe have strong civil liberties protections, or at least respect for them.
If you don’t know about this, the French approach to taxation can seem progressive, With context though, it seems much more like an authoritarian move.
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[ 3.1 ms ] story [ 66.2 ms ] threadBootstrapping an ecosystem capable of spawning and growing global market leaders is hard. And it would require some very unpopular measures.
- Weak/Non-Existent non-compete
- Make it easier to hire and fire employees
- Competitive approach to retaining talent
- Lower tax rate for tech companies instead of endless government grants/subsidies
The last one in particular is critical. In some EU countries, you can already justify your 5th employee's complete salary having a dedicated "accountant" whose only job is to apply for government grants.
It's simply a stupid idea to try to emulate the US. The world doesn't need more gigantic global conglomerates which are largely built on homogogenous large domestic markets with unified languages to scale up (hence the dominance of China and the US).
Countries like France, instead of dumping taxes or eroding worker rights, should focus on small business and human scale technology. Privacy, encryption, protocols rather than platforms, open standards, open source, healthy and diverse ecosystems rather than growth. Switzerland is the example to follow, not the US or China.
The real barrier to having a wide unified market for Europe to grow it's ecosystem is having N jurisdictions with laws that are incompatible with each other.
Being unemployed is a core aspect of the French identity.
Heck, China has "global market leaders" following exactly none of that advice.
But sure.
Your argument is that government grants are bad because they cause some moderate buerocratic hassle?
There's nothing moderate about it. Think about the amount of paperwork required so that someone is spending 35h/week working on it. And we're talking about a 5 people org. All that to claim tax credits the company will maybe get next quarter. As opposed to a US startup that pays way less tax and can just hire the engineer they need as their 5th employee. Which one is getting a head start?
And on the other hand, all these programs are administered by an army of bureaucrats, all paid with a cushy pension fund.
It's a great job program for bureaucrats, not so much for startups!
This is entirely about large foreign companies using clever schemes to offload their sale taxes to semi-parasitic members of the EU.
A new way of calculating taxes is a lot less messy than bombing Irland and Luxembourg.
What they should do instead is if they don't like the existing legal framework that enables companies to pay taxes in an other European jurisdiction, simply re-write that.
Write bad laws, get bad results.
Rentierism is fundamentally unproductive. If you're a keynesian, a rent is literally the excess that can be extracted due to some market inefficiency, and the flood gates should release a million competitors into the market.
Clearly this isn't what is happening. I'm okay with taxing rentiers for the regulatory protection they rely on to protect their monopolies.
I completely agree with your other points.
Then when one of them misbehaves a leaf can be taken from the American play book, and said company will simply be seized by the government and handed over to a trusted sovereign entity for operation going forward.
The DGSE has carried out extra territorial murder before..
My guess is that people who know nothing about French politics would be surprised by this, imagining that most countries in Europe have strong civil liberties protections, or at least respect for them.
If you don’t know about this, the French approach to taxation can seem progressive, With context though, it seems much more like an authoritarian move.