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On Tax Havens and Citizens

Donald Trump’s campaign was all about creating jobs and making America great again. We all heard it often enough. He wants to create jobs by fixing a system which is broken since a long time.

The European Union and the United States of America are alike though they could not be more different. Let’s get straight to the point: the middle class is suffering because the richest companies in the world do everything they can to avoid expenses. In the case of the European Union, it is a crazy system which allows companies to save billions of Euros in taxes by simply moving its headquarter to Ireland. In the case of The United States, it is a battle of underbidding salaries of usual workers in Mexico. What both, the EU and the USA have in common is that they never attacked these issues. Normal citizens and middle-sized companies are those who suffer the most. They lose their jobs to Mexican a country where the minimum wage is a ridiculous amount of $0.58 per hour. The normal taxpayers in Europe need to stem a much higher tax burden while they see huge international companies exploiting their infrastructure without paying any taxes in return.

Mexico

From 2000 until 2010 the United States lost 56.190 factories. This equals 15 a day. American companies are moving to Mexico where they save enormous amounts of labor costs. Workers in Mexico get paid only $3 to $6 per hour. This is not good for Mexico and it is neither good for America. For the same labor, American workers get paid $20 to $34 per hour. The NAFTA agreement already allows free trade between Mexico and the United States. The TPP agreement will add more labor competition as the US workers will have to compete with countries like Malaysia and Brunei where child labor is common and an hourly salary of $1 is not uncommon. Mexico and other countries allow corporations to abuse their people in way that America does not. Normal citizens do not support that. Read more here.

Tax Havens within the EU

In August newspaper reported that Ireland offered Apple illegal tax benefits amounting to $14.5 billion. This allowed Apple to pay nearly nothing for its European business for years. Apple paid 50 Euro in taxes for every million Euros in profit in 2014. A single and childless citizen in Germany pays 50 Euro taxes for every 111.20€ he earns. Normal citizens do definitely not like how multinational corporations like Apple are exploiting their countries and shift their tax burden onto normal middle-class citizens.

Citizens Suffer the Most

Who suffers the most are the normal citizens who are working 40 hours a week to earn a middle-class salary. In the end, they are the people who pay the dodged taxes of multinational companies. And in the end, the American people suffer from illegal salary competition between the United States, Mexico, Malaysia, and China. Politicians need to overthink the capitalistic free trade and abolish tax havens all over the world. When politicians don’t act if unfair tax agreements are exploited it is poison for a liberal world.

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