1) The foreign company is using loopholes to dodge taxes à la Amazon having dodged sales tax for decades at the expense of local retailers who have to charge sales tax.
2) Protectionism. A specific tax to give local competitors an edge in order to promote the development of local businesses. The rationale behind is this is to trade off the advantages of a "better" foreign offering in order to develop a local company that has more incentive to reinvest its earnings into the local economy. An example would be India heavily taxing Apple products to produce iPhones inside India so that a bulk of the money spent would go back into the Indian economy in the form of wages for factory workers, instead of going to the US and China.
Another example is US and Europe protecting the interests of Boeing and Airbus respectively due to the national security importance of the aerospace companies.
In some cases if another (single) country invents the wheel and thus controls the world's supply, your country would benefit from importing the wheel and selling the other country the axel. But as it turns out wheels are very useful and if the other country has a near monopoly on it due to scarcity, your country would opt to reinvent the wheel so they have the ability to produce the whole wheel and axel combo within the borders without being gouged for price.
https://www.theguardian.com/technology/2015/jun/24/amazons-u...
If I'm in the UK and choose to buy something from Amazon, it will be shipped from a warehouse in the UK owned by Amazon.co.uk Limited.
However, I pay my money to Amazon EU Sarl which is based in Luxemburg. This company is a tax shell, it contracts back to amazon.co.uk for the fulfilment. The Sarl keeps all the profit.
According to this https://beta.companieshouse.gov.uk/company/FC032354/filing-h... (see full accounts, which ironically are served from AWS), the SARL made profits of €481m in 2016. Futher down the PDF we see they are involved in a number of tax disputes about this.
Fundamentally if I buy goods from a .co.uk website that are shipped from a UK warehouse, it is very hard to argue that the profit should be counted in Luxemburg.
It is the government that is threatening force (fines, jailtime) if the company/people do not hand over a portion of their hard earned cash.
These same thieves/politicians are the ones that wrote the laws and made these exceptions.
The companies are under an obligation to their families, employees, suppliers, shareholders, and the community at large to maximize value.
Or so you think that a government committee could build a cheaper, better, nicer iPhone?
Do you think a group of bureaucrats would make a cheaper, better, more efficient Tesla Vehicle?
We laugh at this, because we know the government is a bunch of people that on the whole have never employed people and created value from launching their own businesses. They do not know how to maximize wealth creation.
Why do we think that the government raking in Billions more is going to be put to create better, faster, cheaper and more efficient goods ands and services than a company like Tesla, Apple or Amazon?
Here's what's going to happen:
Billions will be raked in. And billions will be spent on duds. Look at Canada spending 1B on a scheduling app that got scrapped because government workers didn't give a shit.
Look at US gov spending on the billion dollar website.
The money will go to the pockets of more lobbyists, politicians, and will flow back to the companies.... and less quality service will be delivered , and at a higher price.
These companies employ so many people (who pay income tax from said revenues) and all kinds if intermediate taxes are paid in acquisition, and distribution of raw materials to final product to the door of the customer.
Quite literally a $700 iPhone would cost less than $200 had the government not levied/taken profits at each step from:
Land development, ore mining, glass and silicon manufacturing, assembly, distribution, packaging, shipping.
And then they want to stifle growth further and take a 3% cut of gross revenues?
I'm all for their cut during trade and VAT (20%!) But taking your hard earned profits to spend in wasteful ways while lining the surveillance communist state's pockets via broken and inefficient products is disgusting.
This will not end well. The EU is well on it's path to full blown centrally planned totalitarianism and communist level controls. You will see.
So in the specific case where having a local industry brings positive externalities, I think there may be a case for some limited forms of protectionism, but even these can be misapplied. In the specific case where countries want to promote "white-collar" industries, such tariffs should only apply to end-consumer products, never to products which are sold to businesses, because usually the farther along you are in the supply chain, the more "educated" your profession is, with a few exceptions. The most compelling positive example comes from China's development of its own Internet services like WeChat, Baidu etc, which stemmed directly from China's exclusion of Western competitors like Google, Facebook, and historically Visa/MasterCard, and which may have promoted the growth of an IT industry in China. For a negative example, Brazil's tariffs on video game consoles are devastating for Brazilian video game developers, because their potential market is eliminated. Even in this latter case targeting a consumer product hurts domestic businesses. Another case is when positive domestic externalities are replaced with negative foreign externalities, such as when considering carbon taxes on imports.
This is all just speculation, of course, except the part about border carbon adjustments, which has been the subject of serious analysis:
In order to have an optimal amount of taxes for tech companies that can move at a whim, you need some sorts of capital controls that prevent that.
I find a sales tax to be a very lean approach.
I think the fundamental difference in view is on the one hand seeing two parties as individuals that should be free to have this interaction.
On the other hand as two individuals in a society, whose ability to even consider having the interaction comes from society providing the means (infrastructure, education, legal frameworks, ...) and that the idea of individuals doing interactions on their own isn’t even a reasonable concept.
Reality lies somewhere in between but I subscribe more to the latter.
Why would you want to restrict (economic) interaction between two parties just because they’re far away from each other?
I’m sure some of the local companies in my area would love to prevent me from buying goods elsewhere, but why would I want to buy goods elsewhere unless they are either cheaper and/or of better quality?
In my opinion, your quote misrepresents the situation. It’s not about “giving someone access to a market”, it’s about not restricting trade between two parties because it’s assumed those two parties are intelligent human beings who choose to trade with each other for a reason, and restricting this activity only helps inferior companies who are unable to market their own goods.