Being able to negotiate (or lobby, or coerce, or bribe -- pick your term) lower taxes does not justify lower taxes.

Economies of scale create value when leveraged to, say, produce more goods with less effort, but they do not create value when they are leveraged in zero sum games against customers, workers, or society.

> If there’s not a net gain, then don’t take the deal.

The thing about deals is that what happens between deals is always more important than the deal itself. Focusing on the value flow exclusively at the point of exchange is a terrible mistake. Otherwise highway robbery would be a value-creating activity: "Hey, I'm offering you your life in exchange for everything you own, that's a great deal! If you don't like the deal, don't take the deal!"

>Being able to negotiate (or lobby, or coerce, or bribe -- pick your term) lower taxes does not justify lower taxes

Agree.

>Economies of scale create value when leveraged to, say, produce more goods with less effort, but they do not create value when they are leveraged in zero sum games against customers, workers, or society.

Both sides have to arrive at a value where it makes sense for them to move forward. Subjective value judgements have to occur.

>"Hey, I'm offering you your life in exchange for everything you own"

Sounds like a bad deal. Don't take it.

That's interesting logic. In aggregate small businesses employ more people, so why are they paying effective higher rates? Because the label of the employment is from the a larger entity? Why not all just band together and create an even larger company of every SMB and pay 0 taxes. Free money!

They could.

But with such a large, diverse pool of companies, I highly doubt they could get their interests to align.

But it’s not uncommon to see lobby groups for specific industries lobbying for favorable legislation.

I bet they could get their interests to align behind zero taxes. So something else is at play.

Yes, the fact that there's not much tax efficiencies to gain out of cramming Jim's Car Wash and Susan's Bakery into one legal entity, and a lot to lose out of it.

Now, when the companies are such that it makes some amount of sense to merge them together, that often does happen, and it can lead to tax efficiencies.

https://www.pwc.com/th/en/deals/transaction.html

> M&A transactions provide unique opportunities to improve tax efficiency.

On the entry level (a simple car wash, a bakery) almost everything is a simple linear thing. There's simply no big benefit to creating a holding/unified company.

M&A helps eliminating inefficiencies in cases where there are huge redundancies and excess capacity. (For example two big multinational conglomerates, both have at least one of eeeeeverything, HR, law, finance (bonds, insurance, stocks, investments, controlling interests), payroll, VAT/CIT/sales tax, supply chain management, operational risk management, security/compliance, IT. Plus all the actual business units, and usually big companies have some competing interests here and there, and simply eliminating one or the other (through unification, acquisition, or just closing the less profitable one) frees up resources and leads to better profitability.

The state does contribute too.

Your business uses the state financed infrastructure to exist. Just like your employers do.

Not paying for those contributions is anti social behaviour.

“Not paying”

Again, you’re fixated on a single dimension.

Keeping people employed with quality jobs is a hard problem to solve.

People demand jobs. And demand them from elected officials to “fix this”, even though they have little to do with creating efficient, viable businesses.

So lost tax revenue from the business. Balanced against a larger, working class that pays taxes.

Depending on the terms and needs of the community, there’s a threshold where the deal will always make sense.

If the mass of employers has more money to spend, they automatically create more jobs because they spend it. This is a no-brainer. They are the relevant part of every country out there and the whole system. This is why companies like Walmart are so huge. Many people spending small amounts of money generating huge revenue.

Your rich investor who gains a little bit more due to tax evasion of the company they invested in gives you nothing most of the time because they just reinvest it elsewhere and even if he buys one more yacht with it, they are so few, that their impact on the job market is negligible.

Now the fact that the company which does not pay the taxes for the infrastructure they freely use to generate their revenue can go to a politician and tell him: "give me taxpayer money/let me pay less tax or I go to the county next door" does not have anything to do with employment. It's a hole in national law. If there would be no politician who's allowed to throw money at those already wealthy companies, they would have null leverage, the subsidies would go to those who really need it, the companies would have to pay their taxes (you can't outsource everything) and the mass of citizens would profit from more money in their pocket, a properly maintained infrastructure and money the state has in emergencies like we're witnessing today.

Your "single dimension" view on the situation is the old prayer those who steal taxpayer money/not pay for what they use have told us for years. It's a ridiculously shitty story nobody buys, so please get a dimension.

I have no idea what you're arguing.

You lost me between "If the mass of employers" and "please get a dimension".

> If there's not a net gain, then don't take the deal.

A gain for the dealmaker isn't necessarily a gain for other stakeholders.

Agree.

Either (or both) sides can walk away. That's negotiation.