New York Times:

As some in Europe call for multinational companies to pay more taxes, Britain on Wednesday proposed a new 25 percent tax on the local profits of international companies, including tech giants like Google that use complicated structures to reduce their tax burden.

The so-called Google tax, which would go into effect in April, is part of European efforts to force global companies like Amazon, some of which have faced criticism from local lawmakers for their aggressive tax-avoidance structures, to pay more tax in countries where they have large operations.

Google’s response:

A spokesman for Google declined to comment about the British tax announcement on Wednesday, but Eric Schmidt, the company’s executive chairman, wrote in The Financial Times in June that restrictions on companies’ tax structures would lead to “less innovation, less growth and less job creation.”

Tax incentives exist to bring corporate earnings to that locality. If you want Apple/Google/Amazon to funnel their money through your jurisdiction, you’ve got to give them a reason for doing so. If you raise the tax rate, they will move the shell game elsewhere.