This happens every time. If you punish economic behavior you get less of it. Maryland and New York have lost revenue after they passed “soak the rich” tax schemes and the result is that those who migtht have paid the tax either fled the state, simply decided to do business elsewhere, or decided to not engage in any behavior that is taxable. Spain went down the same road. Class warfare rhetoric undermines confidence with job creators, risk takers, investors, and small businesses.
It is much like we said in our previous post, “Those with even the most rudimentary understanding of economics understands this and yet new university trained leftist academics keep causing these same problems and keep expecting a different result”.
Always remember, wealth goes where it is treated well.
Spain’s corporate tax take has tumbled by almost two thirds from pre-crisis levels as small businesses fail and a growing number of big corporations seek profits abroad to compensate for the prolonged downturn at home.
In 2010, 30 of Spain’s 35 blue chip companies had subsidiaries in territories considered tax havens, according to the latest report by Spain’s Observation Group for Social Corporate Responsibility.
The organization, which is partially subsidized by the Labor Ministry, put the number at 18 before Spain’s economic crisis began.
“Not only tax reasons justify this trend, but also the internationalization of Spanish groups and the search for new markets, especially in the context of the crisis seen in Spain,” said Josep Serrano, Senior Manager of Transfer Pricing & International Tax at Deloitte in Spain.
The use of subsidiaries in tax havens to reduce tax bills has been a rising global trend in recent decades, tax campaigners said.