Why not finance a more wide tax break for tech companies, including small companies?
I have seen first hand, one of my classmates from high-school, whom I didn't consider to be too bright, receive a 100k EUR grant to build an esports platform that ended up being a styled-up wordpress blog. He had zero interest in tech, never programmed, the works...
He had no interest nor knowledge relating to tech, but managed to somehow get that grant. Meanwhile, I was paying taxes on hard earned freelancing dev money. We were both 23 years old at the time and it was really jarring.
I'd rather they cut taxes for already profitable small companies. The taxes in EU are astronomic.
Tax breaks is not going to do much, because that is not where the real problem is. Imo EU is being underestimated. The EU is really competitive at boring high tech that bootstrap themselves like cars, civilian air planes and tooling, so the business and innovation climate is not bad.
What's different from the EU and US is that the US has single capital market with more unified regulations where it is much easier to pool infinite VC money into an idea. Contrary to popular belief it's actually the LACK of EU regulations that makes the EU less competitive, because a company has to deal with 20+ regulatory bodies.
In short, the EU should focus on more market integration.
Yep, so much this (and Draghi concurs). It's kind of bizarre that the EU needs to do what it's biggest critics fight the most: integrate it's markets and eliminate cross-member bureaucracy.
> that bootstrap themselves like cars, civilian air planes
A civilian airplane manufacturing business takes decades to get off the ground, and is practically impossible to start without heavy government involvement. Cars are not that far behind. How did you pick these as businesses that "bootstrap themselves"? Bootstrapping requires a non-capital intensive business model. These are the opposite. These are businesses running on decades of momentum and government support.
Probably should say companies that are not financed with infinite VC company. Since that is a uniquely American advantage that is not developed in Europe
yet.
You mean the cars whose manufacturing has to be stopped because they don't know how to use one chip in pace of another, while Tesla was chugging in numbers because they were the only ones who knows how to program a new chip.
Tesla is one of the few car companies that receive infinite VC money. European cars are more competitive then American. There is a reason why Trump is complaining that no country is buying in American cars. There are far more European cars in Asia than American ones.
Because investment is often tax-deductible anyway now-days with modern policy trying to encourage this via huge tax-discounts on capex. Therefore tax-breaks on profits just allow existing owners to cash out cheap. The companies that need the help need capital, not tax discounts. Further to this the companies that are profit-generating, still require capital for growth, the small tax on profits isn't enough to make a difference in the scale of things for investment required since corporation tax rates are often so low.
Can the EU directly regulate the details of the tax regulations of their member states? That would be extremely surprising to me and, even if done, would likely be seen as a sever overreach.
It's quite simple. The EU can't tell member states how much to tax and even if you cut out all of its budget you'd save maybe a percentage point or two in taxes
On the other hand the EIB (which is anyway not directly controlled in their executive actions by the EU) can grant funds since it's kind of it's role as an investment bank
In Norway, you can get 25% tax break on R&D costs. It can be combined with other softfunding up to 70% for small companies doing research, and 50% for larger companies doing development.
but how does that work? The money you pay on taxes, is on income - that money is now yours. On the other hand I'd assume a grant is the property of the company, not your friend. Where they able to just leach it all away as personal income?
I have seen first hand, one of my classmates from high-school, whom I didn't consider to be too bright, receive a 100k EUR grant to build an esports platform that ended up being a styled-up wordpress blog. He had zero interest in tech, never programmed, the works...
He had no interest nor knowledge relating to tech, but managed to somehow get that grant. Meanwhile, I was paying taxes on hard earned freelancing dev money. We were both 23 years old at the time and it was really jarring.
I'd rather they cut taxes for already profitable small companies. The taxes in EU are astronomic.