Quick bump: Level playing field

Quick bump: Level playing field

Ireland must collect billions in taxes from Apple, even though it doesn't want to. The European High Court recently ruled against both Ireland and Apple, but not for the reason you might expect. In fact, on this issue Europe is setting a good example for the United States.

At first this sounds like a typical story of the European Union being unfriendly to business. After all, where else would a court rule the government must collect taxes when the government itself doesn't want to? But there is more to the story. The court was standing up for the little guy in a way we aren't seeing in the United States.

Between 1991 and 2014, Ireland allowed Apple to use "creative techniques" to reduce its tax bill. However, "Those tax arrangements were deemed to be illegal because other companies were not able to obtain the same advantages." The court said Ireland is not allowed to play favorites – exactly as it should. But not every part of the world is so enlightened.

In the United States, we see similar corporate favoritism by governments. State and local governments frequently offer incentives to specific companies, often to entice them to create and maintain more jobs in that jurisdiction. For example, consider when Amazon announced it would be establishing its "HQ 2", and cities tripped over each other trying to offer the most lucrative enticements. These cities don't do the same for smaller companies with proportionally similar or even greater economic benefits. That is government favoritism. That is illegitimate governance.

What's more, it's economically backward. Even if economic development was a legitimate purpose of government (it's not), and even if governments were allowed to pick favorites (they're not), then governments shouldn't pick Big Tech. Small and medium sized companies account for far more jobs in the United States than large companies. So these governments are failing both ethically and practically.

The government must treat all citizens equally. Even if you believe governments have a mandate to manipulate economic behavior through incentives and penalties, you must agree they should be applied fairly across the population. And if they aren't, citizens should sue, and courts should rule against these unfair governments.