[taf2]

First you have to promise you'll provide at least a 4% employment boost in my town. e.g. (total jobs 5,500 and total population 119,230 or 4.6% in the case of Cork Ireland)

Then assuming you agree to keep those jobs in my town for the next 10 years and considering the average salary of the employee you hire is a bit more than most in the area. There income tax combined with the increase in aggregate sales on goods and services it might be a good deal for the area. At least this is the typical rational for tax incentives. The issue with tax incentives is IMO is they create the perception of corruption (and in many cases maybe real corruption) - favoring one business over another etc...

[mdekkers]

> First you have to promise

Is there some kind of tax rule I missed where tax discounts are linked to other economic indicators? If I reduce unemployment, or reduce pollution, or plan a tree on a roundabout, or whatever, do I get some discount on my corporate tax?

and this isn't just about 1 or 2 man bands or little startups, whatever. This should apply to any company of any size. Apple, MS, Google, etc. are massive and get massive tax discounts, and I understand why, but if they get a discount on the basis of some special thing they do, this should be on the basis of a public formula that is applicable to all companies.

[jbob2000]

You need a bit of context around Ireland, too. Ireland has been suffering from a mass exodus of young workers over the last few years. At its height, 10,000 young adults a week were leaving the country. Nobody wants to live in cold, rainy mountains working as a miner or fisherman. The thought was that if they could attract some swanky tech companies, the next generation of workers would be more enthused about staying in the country.

[matt4077]

I believe "the last few years" is the wrong context. These tax deals began in the late 70ies, at a time where Potato and Fish were the dominant industries of Ireland. It's easy to forget that they've experienced massive economic improvements since joining the European Union.

[matt4077]

The problem is that it creates a race to the bottom.

If you're Lithuania or whatever, you have a 0% chance of getting a company like Apple to build its European headquarters in your country if they decide on factors like accessibility, talent pool etc. So you can offer them whatever you want, and if that means they rent a mailbox in your capital and pay you 500$ of taxes per year, you're 500$ minus a mailbox ahead.

Of course London just lost 10 Billion $ in yearly tax revenue... And that's where cooperation really starts making sense: you don't make tax deals, London pays one or two of those billions to you and everyone comes out ahead (except Apple).

Technically it's a cartel, but the effects are limited because countries still have a vital interest to allow cooperations to flourish.

(Also: I know Ireland actually had a lot more to offer than a mailbox, and it's actually quite a success story)

[akerro]

Sure I can promise that!

[r00fus]

Special deals for adjusted tax rates are most assuredly pure corruption even if they increase the income the city would get (ie, over zero) because they're one-off deals.

It's equivalent to if I said I'd do the personal equivalent of corporate inversion [1] and then got a sweetheart deal from the IRS just because they'd "make more than if I left".

[1] http://www.investopedia.com/terms/c/corporateinversion.asp

[tornadoboy55]

Not only that, all the other EU countries where Apple stuff is sold actually 'pay' all those employees in a roundabout way, meaning all the other EU countries are effectively subsidizing Ireland.. screw that.