And wouldn't it be better to oh, I don't know, enforce the standard corporate tax rate?
The distorts incentives and destroys the free market.
One of the most farcical examples of this is the decades-long race to the bottom on business taxes and incentives between Kansas City, Missouri and Kansas City, Kansas. For the non-Americans out there, this is basically one city but it sits at the border of two states. So the two states are constantly torching money to lure businesses that play this system and simply go back and forth.
I believe this situation will come to an end and there are several reasons for this:
1. For the EU in particular, reliance on US tech giants is increasingly becoming a security issue. The Eu will increasingly wants homegrown alternatives so the option of leaving will simply not exist because you could leave but then you lose the EU as a customer;
2. For a long time multinational companies used transfer pricing to avoid paying taxes. What's transfer pricing? Let's say you buy a sofa in China for @200, ship it to the US for another $200 and then sell it for $1000. You've made a gross profit of $600. What if instead you have a subsidiary in Vanuatu, which has no corporate income tax (AFAIK), and it buys the sofas for $400 and sell them to the US company for $950? Well, you've booked $550 in profit where there's no tax and only $50 profit where there is.
That's technically illegal. It's often-called transfer pricing manipulation.
So what do tech giants like Google do? They sell their IP to an Irish subsidiary. There's a nominal process to make sure this is done for a "fair" value (according to the IRS). Then they pay royalties to their own Irish subsidiary to shift profits to a lower tax regime. Previously, this created a problem because they couldn't repatriate the money without paying (then) 30%+ corporate taxes but this all changed in 2017 with a tax holiday and a change to how this kind of income was treated. The net result was way lower than 30% net tax however, even with Biden's 15% minimum tax (which was a good thing) that came later.
What's the difference between this kind of profit-shifting with IP and transfer pricing manipulation? Absolutely nothing, except one is illegal and one isn't.
3. Revenue will increasigly have to be taxed in the source country. For example, Google I believe books all UK ad contracts through Ireland such that the UK subsidiary has essentially zero income to tax. I believe governments will increasingly crack down on this such that if something is sold in the UK, it's taxed by the UK; and
4. While individuals may be able to notionally "leave", assets generally can't. Land can't be moved overseas. Natural resources that are mined or fished or logged can't be moved overseas. So it's really an empty threat.
I'm really sick of this "the businesses will leave" propaganda.
But there is no Swedish moon base, or ultra high speed rail, etc. - where does it all go? We have higher taxes but less infrastructure investment than a century ago.
1. If I as a human request a website, then I should be shown the content. Everyone agrees.
2. If I as the human request the software on my computer to modify the content before displaying it, for example by installing an ad-blocker into my user agent, then that's my choice and the website should not be notified about it. Most users agree, some websites try to nag you into modifying the software you run locally.
3. If I now go one step further and use an LLM to summarize content because the authentic presentation is so riddled with ads, JavaScript, and pop-ups, that the content becomes borderline unusable, then why would the LLM accessing the website on my behalf be in a different legal category as my Firefox web browser accessing the website on my behalf?
I think the main concern here is the huge amount of traffic from crawling just for content for pre-training.
A normal industry would've figured out how to deal with this problem before going public, but AI people don't seem to be all that interested.
I'm sure they'll all cry foul if one of them get hit with a fine and an order to figure out how to fix the mess they've created, but this is what you get when you don't ethics to computer scientists.
China is already dominating AI, you are asking the few companies in the West to stop completely.
The regulation is anti-growth and anti-technology - the GDPR, DSA, Cybersecurity Act and AI Act (and future Chat Control / Online Safety Act equivalent) must be repealed if Europe is to have any hope of a future tech industry.
China must be laughing.
Will once again re-up the concept of a “right to root access”, to prevent big corps from pulling this bs over and over again: https://medhir.com/blog/right-to-root-access