Why might the size of companies make it harder for governments to tax them?

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Before the changes of the 1960s and 1970s, the size of the oil firms and their ability to collude made it almost impossible for governments to collect the rents from oil companies that by right should have gone to the state.

The Oil Curse Michael L. Ross

Could the companies be resisting with arms?

Pulse Reborn

Posted 2020-07-05T16:49:15.997

Reputation: 201

4If we regard oil funded lobbyists, lawyers, and propagandists as arms, collectively comprising a kind of international army of (white collar) mercenaries, then yes. – agc – 2020-07-05T18:04:01.047

Answers

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The "changes of the 60s and 70s" refers particularly to the founding of OPEC, and the subsequent oil crises

The point of the oil companies being too big to tax is that, prior to OPEC the oil companies were big and rich enough to play one oil producer off against another. The producers were relatively poor countries. The oil companies were able to set the price that they paid to extract oil. If a country wanted to raise the tax, the oil companies were able to move to a nearby country, and the loss of income would be devastating. It is only with the foundation of OPEC that the oil-producing countries colluded to limit oil production (to raise the price) and collectively demand more from the oil companies.

Naturally the oil companies have armed security, but this is not for tax resistance. There was no need for the oil companies to act like the East Indian Company. They were able to achieve their ends through economic threats, not military ones.

James K

Posted 2020-07-05T16:49:15.997

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