Surprising IQ countries

in basic terms, EU VAT is usually higher than the average U.S. federal income tax rate. The simplest comparison is EU standard VAT around 21.8% versus U.S. federal income tax brackets from 10% to 37%, though the U.S. tax is progressive and not a flat rate.

A cleaner way to say it is: VAT is normally higher than the U.S. starting income-tax rate, but lower than the top U.S. income-tax rate. Because they tax different things, there is no perfect one-line compariso

A country or trading block will always set its own tax rates. America is more designed for the richest to dodge tax than Europe, so America needs to look at their own domestic problems, rather than trying to ask another parts of the world to change their tax system to accommodate them .

The Chat summary you provided highlights a tiny few % difference, however, it ignores that Big Tech based their operations in Ireland to avoid both Corporate tax and tariffs. Somehow America seem to classify software manufacturers are digital services. I have heard of a digital product, but not a digital service.

???? United States

???? European Union

?? EU somewhat more restrictive overall

?? Gap: roughly ~2–3 percentage points

Ai Says...

This argument reads less like a coherent economic analysis and more like someone stitching together half-understood talking points they picked up online.

First, the “America is designed for the richest to dodge tax” line is emotionally loaded rather than analytical. Every advanced economy has tax optimisation problems, including European countries. Ireland, Luxembourg, the Netherlands, and others have spent decades building systems specifically attractive to multinational profit shifting. Pretending this is uniquely “American” is politically fashionable, but economically naïve.

Second, the claim completely confuses different concepts: corporate tax, tariffs, VAT, digital services, and non-tariff barriers are all separate mechanisms. Throwing them together as if they’re interchangeable just creates noise.

Big Tech companies based operations in Ireland primarily because of:

- lower corporate tax rates,

- favourable intellectual property rules,

- EU single-market access,

- and English-speaking legal infrastructure.

That is tax structuring — not “avoiding tariffs.” Software companies are not moving to Ireland to dodge tariffs because tariffs on digital software products are already minimal or nonexistent in most cases. That statement alone shows a fundamental misunderstanding of how international trade works.

Then there’s this bizarre objection:

> “Somehow America seem to classify software manufacturers as digital services. I have heard of a digital product, but not a digital service.”

That’s not an argument — it’s just ignorance of modern economics. Digital services are a massive and well-established category:

- cloud computing,

- streaming,

- SaaS platforms,

- online advertising,

- app ecosystems,

- payment processing,

- hosting,

- marketplaces.

These are services delivered digitally. The term has existed for years in OECD, WTO, and EU policy discussions. Saying “I’ve never heard of it” is not evidence the category doesn’t exist.

The biggest weakness, though, is the contradiction at the centre of the post.

The trade-barrier table they quoted already concludes:

- EU barriers: ~8.5–12%

- US barriers: ~6.5–9%

So the very numbers they cite acknowledge the EU is somewhat more restrictive overall. Yet the writer still tries to frame America as uniquely unfair or demanding. They’re emotionally committed to a conclusion that their own evidence weakens.

And the “tiny few % difference” dismissal is immature too. In international trade, 2–3 percentage points is not trivial. Governments negotiate for years over fractions of a percent because:

- trade volumes are enormous,

- margins are thin,

- and small barrier differences compound across industries.

A 2–3% structural difference across trillion-dollar economies is economically significant.

The overall tone also gives away the immaturity:

- moral grandstanding instead of precision,

- vague anti-American rhetoric,

- conflation of unrelated concepts,

- and dismissing technical economic categories simply because they personally haven’t heard of them.

It’s basically a political rant wearing the clothes of an economic argument.

Yaaay...let's put each other's spots into AI and say "prove this wrong".

Sooooooo much fun

Sure, ButtPlug- you never provide your prompt. (See my previous example earlier on this thread).

You claim to know AI, but you ask leading questions. (This is not just AI-related; it is common sense)..

You try to get the answer you want.

Paste all of my posts into AI from this thread. Start with FACT CHECK THIS "Sharbok post).

Also, if you only give AI some excerpts of my comments, removing context. (E.g.

1. America are benefiting from their Irish operation to avoid paying corporate tax.
2. I am not disputing that digital services are not a real tax code, and I am disputing the validity of this.
3. I work in the IT industry and frequently hear the term digital product, but I have never heard digital service (other than in relation to tax). E.g. what is the difference between a digital product and a digital service?
4. The topic is about fair trade overall. I never said a tariff was corporate tax, or an income tax. Tariffs are import taxes, so if it applies to physical products, then why not digital products?
5. When I said tiny numbers, I was referring to the context of 35% tariffs. (A huge amount by comparison)

Not only do you not know how to use AI, as you are too emotional, but you are also unethical in your use by only giving excerpts of what I said without context (e.g. broader discussion of fair trade).

America are just using creative accounting with the term digital services, and seems to have pushed this through the WTO. If it had never benefited America more, it probably would not be the case.

So, I consider software a product, not a service -and that a digital product should be taxed in the same way a physical product is. I debated the point, saying I do not agree with the tax classification, not the existence of the tax code. You misquoted me, so the AI response was not to my comments.

Who decides if software (digital product) should be taxed at a lower rate than a physical product? This is something America have forced in - but it is up to a country that buys this to accept. The WTO is not a transparent organisation, and its rules are often broken anyway. (e.g. Trump's tariffs)

Salesforce is a product, even if it is called SAAS (Software as a Service). It is hosted in the Cloud, so it could be said to be a cloud "service". It is ambiguous at best, but I still consider any company that is a manufacturer a provider of products, not services.

If you install Microsoft Office on your computer, is that a digital product? And if you use the cloud version of Office, then it is a digital service?

If you buy a vacuum cleaner, and it has cloud updates to its software, is it now suddenly a service? More and more products will have cloud updates, so in the future, every product will be a digital service?

The simplest solution to this is to trade less, which shall reduce deficits. (In secondary and tertiary industries). The EU must enforce protectionism, and America can do so as well.

China were the first to screw over the global free trade system, so my first priority would be to trade less with China. This could have been planned by various countries together - instead, we get Trump tariffs.

Ireland should be thrown out of the EU. They are a parasite that is America first; they do not have shared interests with the rest of Europe. Any company that bases in Ireland gets away without paying corporate tax, so that is not a level playing field.

Ou Maaik, education can help someone achieve their IQ but it won't grow their IQ.

May I just add that you could emigrate to any country in the world and you would bring down that country's average IQ by a couple of points.

"The simplest solution to this is to trade less, which shall reduce deficits. (In secondary and tertiary industries). The EU must enforce protectionism, and America can do so as well.

China were the first to screw over the global free trade system, so my first priority would be to trade less with China. This could have been planned by various countries together - instead, we get Trump tariffs.

Ireland should be thrown out of the EU. They are a parasite that is America first; they do not have shared interests with the rest of Europe. Any company that bases in Ireland gets away without paying corporate tax, so that is not a level playing field. "

Ai says...

This post has several weaknesses — factual, economic, political, and rhetorical. You can criticize it without necessarily defending unrestricted globalization or opposing all tariffs.

1. It oversimplifies trade deficits

“Trade less, which shall reduce deficits.”

That treats trade deficits as if they are automatically bad and caused mainly by “too much trade.” In reality:

1. Trade deficits can result from currency flows, investment patterns, consumption, energy imports, and comparative advantage.
2. Countries can run deficits while still growing strongly.
3. Reducing imports does not automatically create competitive domestic industries.
4. Protectionism often raises prices for consumers and manufacturers that rely on imported components.

For example, tariffs can reduce imports from one country but simply shift imports to another country instead of rebuilding local production.

2. It misunderstands how modern supply chains work

Secondary and tertiary industries are deeply interconnected internationally.

A European or American company may:

1. design in one country,
2. source components from several others,
3. manufacture elsewhere,
4. and sell globally.

“Trade less” sounds simple but could:

1. increase costs,
2. reduce competitiveness,
3. slow innovation,
4. and hurt exporters through retaliation.

3. “China broke free trade first” is too simplistic

China has absolutely been criticized for:

1. subsidies,
2. intellectual property violations,
3. forced technology transfer,
4. state-owned enterprise advantages,
5. and market barriers.

But:

1. Western countries knowingly integrated China into global trade for decades because consumers and corporations benefited.
2. Many countries also use subsidies and industrial policy themselves.
3. The global trade system was never perfectly “free.”

So the statement turns a complicated shared system into a one-sided moral narrative.

4. It ignores the difference between targeted industrial policy and blanket protectionism

There’s a serious policy debate around:

1. strategic industries,
2. semiconductor independence,
3. energy security,
4. critical supply chains,
5. and anti-dumping measures.

But the post jumps from those concerns to broad protectionism without explaining:

1. which industries,
2. how long protections should last,
3. how consumers avoid inflation,
4. or how retaliation would be handled.

That makes it sound ideological rather than practical.

5. The Ireland section is especially weak

“Ireland should be thrown out of the EU.”

This is rhetorically extreme and economically shallow.

Ireland’s low corporate tax model is controversial inside the EU, but:

1. it is legal within EU frameworks,
2. many EU members compete through different tax or regulatory advantages,
3. and Ireland is deeply integrated into the EU economy.

Also:

1. multinational firms in Ireland do pay taxes,
2. the issue is mainly about lower rates and profit shifting,
3. not “no corporate tax.”

Calling Ireland “a parasite” weakens the argument because it replaces policy analysis with scapegoating.

6. It ignores the benefits Europe gets from Ireland

Ireland:

1. hosts major investment,
2. contributes to EU growth,
3. acts as an English-speaking gateway to the EU market,
4. and participates fully in EU institutions.

You can argue Ireland’s tax regime distorts competition without arguing expulsion from the EU.

7. Trump tariffs are presented without discussing consequences

The post implies tariffs were obviously the correct response.

But Trump-era tariffs also:

1. increased costs for American manufacturers,
2. raised prices for consumers,
3. triggered retaliation,
4. hurt some exporters,
5. and did not dramatically eliminate trade imbalances.

Economists across the spectrum are divided on whether the benefits outweighed the costs.

8. The tone damages credibility

Words like:

1. “parasite,”
2. “screw over,”
3. and blanket national accusations

make the post sound emotional rather than analytical.

Even people who agree with some underlying concerns about:

1. deindustrialization,
2. dependence on China,
3. or tax competition

may reject the post because the rhetoric is inflammatory and imprecise.

The core problem

The post takes several real issues:

1. unfair trade practices,
2. industrial decline,
3. tax competition,
4. strategic dependence,
5. weak enforcement of trade rules,

and compresses them into:

1. simplistic nationalism,
2. broad protectionism,
3. and scapegoating.

That makes it politically provocative, but economically underdeveloped.

Europe’s real problem going forward is it’s most valuable tech company doesn’t make the global top ten. It’s hopelessly behind in the technology race and given the amounts of money now being spent to stay at the cutting edge, there is no chance it will catch up.

Why did this happen? Not because Europe doesn’t have bright people and world class universities. It simply doesn’t have the culture to pursue these speculative investments, the US does, it’s resident in Silicon Valley and increasingly in Texas.

When the internet emerged as a force in the 90s was the time to act. To create a European tax advantaged tech zone….to make tech a priority. It still hasn’t happened and now it’s all too late. Socialism vs Capitalism, a loser every time.

No it’s not the US companies cheating, not some kind of intellectual monopoly ….just the long term effects of smart people trying to build wealth. As opposed to the little men in suits obsessing about social issues.

Smart people will flock to a supportive culture, many if not most US tech leaders were foreign born. Being able to quote Keats just doesn’t cut it any more.

And Europe still has to find another $ 50 billion minimum to cover dedicated European defense expenditures made by the US and some other vast amount of money if the US $ 1.5 trillion dollar budget is released from any NATO obligations.

Where is it coming from….30% VATs?

Europe desperately needs adult, worldly leadership but with the likes of Macron and Starmer…..good luck. I don’t include the Germans they haven’t got any geo political policy right since Metternich.

"Ou Maaik, education can help someone achieve their IQ but it won't grow their IQ."

...or it could actually condition the mind not to use the IQ, but rely on what's learned or indoctrinated...

@ButtPlug,

1) What prompt did you use? (It is pointless to comment that AI said: XYZ, if it is not clear what the prompt is. Like I have repeatedly said - Start with FACT CHECK THIS: If you use a prompt like write a counterargument - to one comment on a large conversation on this thread, you are just getting it to say what you want to say. You are never going to understand this. Do not ask leading questions if you want an impartial response.

I could ask ChatGPT using a prompt like "Write a counterargument to eating mostly vegetables and fruit, and it would do this. However, we know that eating lots of fruit and vegetables is good, but if you phrase the question in a certain way, ChatGPT will respond in kind.

You could ask ChatGPT to write an argument that God exists. Then create a new thread to write an argument that God does not exist. Chat would basically contradict itself. These are leading questions, where the user is controlling the answer. It plays devil's advocate.

2) Again, if you just take one comment from a lengthy post that ignores context. For example, when I said let's just reduce trade in secondary and tertiary industries, the context I mean "is" - "if" there is not going to be a resolution on what is fair trade. It is obvious that trade has benefits - I am not disputing that, and you know that.

However, for data products their are other advantages to being a European company..

For example, an EU government official got locked out of their Microsoft email address last year, over some dispute with Trump policies. The US government could be recording all emails to and from certain domains (e.g. the government).

America also passed a law that allows the US government to access European data within the cloud, which is a security risk. That could hypothetically allow America to access confidential information about Ferrari and use that for its local car industry. A bit like how China steal ideas

Mozart is using the Trump narrative that the EU is ripping off America by cherry-picking certain industries, while ignoring others like Big Tech tax evasion. So, if we can't get a resolution, let's just trade less.

So, because trade has benefits, we should just let China screw over the global free trade system?

I think if Europe starts to block US tech products, we will catch up quickly. Most of the workers in US tech companies are not American, so we can just pick up some of them to help speed up the process.

I think if Europe starts to block US tech products, we will catch up quickly. Most of the workers in US tech companies are not American, so we can just pick up some of them to help speed up the process.

Not a chance…..nothing you would do today could offset the huge investment already made, Europe’s best shot is as a niche player….eg in chip manufacturing hardware. Best thing Europe could do is work with its car manufacturers to substitute EVs with hybrids in their legislation. Tech is out of sight.

I disagree. We could very easily kill Google and Facebook in Europe by blocking their tracking abilities.

The reason Google is the best search engine is purely down to their ability to track what people do on the website after clicking on its link from the search engine results page (SERP).

No other search engine can do that.

Google has a database of search terms. It then ranks each page based on user performance (conversion rate).

For example for a search term - "Samsung Digital Plasma TV:

1. Website A gets 5 sales for every 100 clicks from a search engine (e.g. Google)
2. Website B gets 4 sales for every 100 clicks
3. Website C gets 3 sales for every 100 clicks
4. Website D gets 2 sales for every 100 clicks

So rank Website A ranks number one for that search term "Samsung Digital Plasma TV"

Website B ranks number 2 website, and so on.

Amazon do this, but only one their own website (e.g. rank product pages by conversion rate of each search term).

Google does the same thing, but across the whole internet. The tracking scripts emended on websites effectively turn the whole world wide into one website.

Then just rank the pages based on conversion rate. The user average determines the rankings.

This is not difficult to do, it is purely down to being able to be able to track users to build an average conversion rate by search term. Google is built on one idea, this carries the whole company.

The organic/natural/free listings allow Google to show ads above these results - which is their primary source of revenue, and more importantly profit.

None e-commerce website have similar concepts (e.g. Form Submission, average session duration, return to site percentage).

If European search engines could do that, but Google could not - that is the end of Google in Europe.

Having a standardised tracking script that shares aggregated data would protect privacy and create competition. It would create a level playing field, and ensure that all Search engines had access to the same averaged data.

Over 70% of Facebook's revenue is generated by tracking people across the internet. Block it, they lose most of their revenue. Ditto with the above.