[HN Gopher] Global minimum corporate tax: 130 nations to support...
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Global minimum corporate tax: 130 nations to support U.S. proposal
Author : DocFeind
Score : 236 points
Date : 2021-07-01 18:32 UTC (4 hours ago)
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(TXT) w3m dump (www.cnbc.com)
| throwaway34241 wrote:
| Apparently it's also possible to address the issue of shifting
| corporate profits to tax-havens even without a large scale
| international agreement.
|
| Basically, corporations have one place money comes in and two
| places it comes out, like so:
|
| sales = expenses + profits
|
| If you tax the sales, then deduct the expenses, that leaves the
| _incidence_ of the tax on the profits. But importantly, unlike
| profits, it 's usually clear to which country a sale belongs to.
|
| Where this gets complicated is international borders, the
| solution there is to only deduct domestic expenses. At first this
| seems protectionist, but according to economists changes to the
| currency exchange rates eventually balance out the effect and it
| ends up trade neutral.
|
| This idea was actually seriously proposed as part of US tax
| reform a few years ago (and I saw some praise from both
| left/right leaning economists), but it got killed because some
| big companies were against it. It's called a border adjustment
| tax. [1]
|
| Even though the above is an interesting idea this recent attempt
| to come to an international agreement is probably also
| reasonable, since it should accomplish some of the same things
| and getting countries to agree to a headline number is probably
| more realistically achievable than in-depth reform (so it's
| likely solutions like this or nothing at least in the medium
| term).
|
| [1] https://en.wikipedia.org/wiki/Border-adjustment_tax
| toast0 wrote:
| > But importantly, unlike profits, it's usually clear to which
| country a sale belongs to.
|
| Is it? If I order something from another country, does the sale
| belong to the sending country or the receiving country?
| zizee wrote:
| This is an interesting concept, and worthy of including in the
| discussion, but you are presenting Border Adjustment Tax as if
| the results are a certainty.
|
| The Wikipedia article describes this as theoretical with quite
| a bit of uncertainty, and economists are far from concensus on
| what the outcomes would be.
|
| There are also definitely winners and losers in this system, so
| it's not so simple to say it the proposal was killed just
| because some big companies were against it.
| tastyfreeze wrote:
| An agreed upon international base tax rate is the wrong
| solution. This becomes a minimum wage for nations and removes
| the incentive to compete to be the home of corporate
| headquarters. Border adjustment tax removes the tax shelter
| loophole and strengthens the incentive to be a good place to
| headquarter a corporation.
| collaborative wrote:
| Nations can still compete. Stability, rule of law,
| infrastructure investment, etc. Everything except letting
| companies use the country as a pirate's cave
| gruez wrote:
| >Nations can still compete. Stability, rule of law,
| infrastructure investment, etc.
|
| don't forget tax incentives. Sure, every country has to
| charge 15% tax, but if you domicile your country here we'll
| give you tax credits!
| Jammub wrote:
| The "incentive to compete" is currently "who has the lowest
| number and the least attentive auditors"
| tastyfreeze wrote:
| Right, that would continue to be true. However, now, a
| corporation can be headquartered in one country to have
| access to labor and shunt all profit through a subsidiary
| in a low tax country. They get the benefit of a skilled
| labor force without paying tax on the profits created by
| that labor. Fix the tax shelter problem and the incentive
| for countries becomes "make a labor force worth the tax
| rate or lower the tax rate".
| maverick-iceman wrote:
| This could be the catalyst for privacy oriented coins such as
| Monero and Zcash.
|
| Also the right catalyst for doing away with exchanges and start
| buying and selling crypto on OTC type market with 1:1 deals and
| interactions
|
| Like it happens for grey area commodities such as marijuana and
| prostitution
| miohtama wrote:
| If yo are a legit company you need to file your accounts with
| the government. Maybe some small funds and companies can be on
| a paper in Seychelles (no accounts needed) and have their
| Monero induced cocaine parties, but this law aims at Amazon
| (effectice tax rate 0%), Apple, Google, Microsoft, Netflix and
| sucy.
| maverick-iceman wrote:
| > If yo are a legit company you need to file your accounts
| with the government.
|
| _You don 't have_ , you do because you are afraid of
| repercussions.
|
| With a totally private coin and transaction happening off the
| chain....well it's not like they have any means to see what
| you are doing and present repercussions.
| ppeetteerr wrote:
| The complexity of this agreement and its execution are
| incredible. Not only getting alignment from 130 members, but a
| system by which companies report their revenue _and the cost of
| the revenue_ for every country! Future tax avoidance schemes will
| most likely try to "divert" their costs towards high-revenue
| countries like the US. After all, what is the profit margin of an
| iPhone sold in Romania?
|
| For some context, corporate tax makes up around 7% of the US's
| federal revenue. While this legislation is important, it's a
| fraction of the overall revenue pie.
| nabla9 wrote:
| You are mistaken. It's not that complicated and does not work
| that way.
|
| 1) No foreign country is required to collect minimum tax.
|
| 2) If some country is not collecting minimum tax, home country
| tops up the tax until minimum tax requirement is fulfilled.
|
| 3) It's up to the company to show evidence that it paid minimum
| tax in other countries so that it's not double taxed in country
| where it's hq is.
|
| 4) They need to report taxes in other countries only to their
| home countries.
| ppeetteerr wrote:
| Thanks for clarifying
| colechristensen wrote:
| How much revenue is "missing" due to tax magic?
| rebelos wrote:
| A lot. Changes in policy cut the effective corporate tax rate
| down from ~40% around 1950 to where it is today. Lyn Alden
| covered this in an excellent post:
| https://www.lynalden.com/tax-shift/.
| slim wrote:
| OECD original blogpost :
|
| https://oecdecoscope.blog/2020/10/20/tax-challenges-from-dig...
|
| Actually Pillar 2, which makes corporations pay taxes where they
| actually make money, is more interesting. Because if you sell my
| data to say swiss corporations, why would you pay taxes in
| switzerland and not in my country? In other words why not pay
| taxes where you extract resources ?
| LAC-Tech wrote:
| Classic anti-competitive behaviour.
| shrubble wrote:
| Watch what the City of London (the financial center) does, would
| be my suggestion.
| miohtama wrote:
| They try to delay this by murking the waters with gross revenue
| based tax for digital services
|
| https://www.bloomberg.com/news/articles/2021-05-16/u-k-s-sun...
| orlovs wrote:
| I did not read full list of comments, but before celebrating
| victory of "they gonna pay". Let me guess, many countries will
| change tax code that corporate tax being paid only on witholding.
| dantheman wrote:
| Such a terrible idea.
| calkuta wrote:
| Don't governments have enough money? I think they could do with a
| lot less actually.
| asteroidbelt wrote:
| That's what conservatives always say (but not always do):
| decrease taxes, make the governments smaller, give money back
| to people, so people will spend money more efficiently than the
| government.
| motohagiography wrote:
| The idea that politicians and bureaucracies can defer to external
| international conventions to be the bad-cop for wildly unpopular
| policy decisions - and then claim to be powerless to stop them -
| is anathema to democratic principles like national
| representation, consent of the governed, and other concepts of
| human rights.
|
| This proposal seems like a global group of government affiliated
| people colluding to fleece each others' citizens instead of
| serving them. This is literally what conspiracy theorists have
| been predicting for decades, it's a terrible shame to make them
| right.
| jollybean wrote:
| I don't think this is a very good characterisation at all.
|
| Nations don't have a lot of control over what goes on outside
| their borders. They can try, but it's hard.
|
| So you end up with weird 'race to the bottom' scenarios where
| everyone is trying to out-do one another with lower rates i.e.
| a giant prisoner's dilemma.
|
| Something needs to be done collectively to sort out the problem
| and this kind of activity is how it's done.
|
| This effort is not about 'fleecing' it's more or less trying to
| but a lower bound on corporations ability to avoid paying
| taxes.
|
| It's the opposite of 'not serving their citizens' - it's making
| sure that taxation is applied to international corps in some
| consistent way.
|
| I don't think 'conspiracy theorists' have been talking about
| this one.
| ericffr wrote:
| As a normal guy, it is hard to understand the extremes to which
| a company will avoid taxes, basically getting all the profit to
| it's stakeholders, and none to the ones who made it possible
| for them to succeed (the workers, the ones who built the roads,
| the ones who provides the education to their kids...)
| robertlagrant wrote:
| Higher corporation tax ignores the presence of that instinct.
| If there's more tax on profits, then businesses need to
| reduce costs (e.g. salaries for workers such as road
| builders) to compensate.
| elliekelly wrote:
| Is a minimum corporate tax "a wildly unpopular policy
| decision"? I worked on international inversions in the early
| 2010s and they fell out of favor pretty quickly but I don't
| think it was the end of the world. No one needed to do an
| inversion in order to keep the business afloat, it was purely a
| play to pad the bottom line. A nice to have but not a must
| have.
| silicon2401 wrote:
| > This is literally what conspiracy theorists have been
| predicting for decades, it's a terrible shame to make them
| right.
|
| When conspiracy theorists start being right, you need to
| question whether they're crazier for believing their theories
| no matter what, or if it's crazier to believe that they're
| wrong no matter what. Things like this are why I've never
| fallen for the promise that globalization and open borders are
| good for anybody but the ultra-rich, maybe.
| colechristensen wrote:
| I don't think the New World Order conspiracy theorists were
| particularly paranoid about closing corporate tax haven
| loopholes.
| motohagiography wrote:
| I thought their whole schtick was "one world government,"
| which is precisely what colluding to destroy tax competition
| is, as is banning capital flight which results from abusive
| policy.
| axlee wrote:
| colluding: to act together secretly or illegally in order
| to deceive or cheat someone.
|
| And please: capital flight being the results of abusive
| policy? Corporations and wealthy individuals will always
| try to avoid giving the fair share to the society that
| enabled their wealth in the first place: the case where
| wealth moves because of abusive policies is so marginal in
| the ocean of pure greed. Some countries are fiscal
| parasites and benefit from the theft of other societies,
| and this is how we deal with parasites. Should we just
| watch wealth evaporate away to offshore stashes, wealth
| that actually belongs to the people?
| dane-pgp wrote:
| > wealthy individuals will always try to avoid giving the
| fair share to the society
|
| Given that the median US household pays about $10k in
| taxes per year, and has a net worth of about $120k,
| perhaps we also need a global minimum wealth tax of say
| 8% per year, with a tax free allowance on the first $100m
| of net worth.
| robertlagrant wrote:
| The fair share is defined by tax law. It's not some
| additional amount.
| dantheman wrote:
| Notice how fair share is never actually stated...
|
| How much of your time should you be forced to devote to
| others - the majority of government spending is on social
| programs. 1 day a week, 2 days a week?
|
| What's the fair share? I'd say it's actually far lower
| than current tax rates.
| djbebs wrote:
| Rich people are the only ones paying anything at all. If
| that's not paying their fair share, how are the 50% of
| people who don't pay any income taxes at all paying their
| fair share?
| axlee wrote:
| Poor people pay a lot more taxes overall in relation to
| their wealth and income than the extra-rich. We have a
| regressive tax system.
| ris wrote:
| > tax competition
|
| It is _not_ tax competition. It 's tax fleecing. The issue
| is that companies are paying the rates of low-tax countries
| while operating by and large in "high"-tax countries and
| reaping all the benefits from their expensive
| infrastructure, law enforcement, healthcare, education,
| welfare (to top up absurdly low employee wages)... all of
| which gets paid for by "someone else" (you and me).
|
| It _might_ be tax competition if a company that decided to
| pay Bermudan tax rates also had to draw all its talent from
| Bermudan universities, had to build their massive shipping
| hubs in Bermuda using Bermudan transport, had to perform
| their complex legal cases through Bermudan courts, had to
| have their entire workforce cared for by the Bermudan
| healthcare system (or pay them enough to go private)...
|
| (Nothing against Bermuda, picked totally at random)
| robertlagrant wrote:
| It is tax competition. It's just not also
| labour/university/transport etc competition all lumped
| into one huge unwieldy choice.
| justicezyx wrote:
| > to fleece each others' citizens instead of serving them
|
| How is that so?
|
| More tax for the government, at least that benefits government
| workers and public servants positions.
| BoxOfRain wrote:
| >The idea that politicians and bureaucracies can defer to
| external international conventions to be the bad-cop for wildly
| unpopular policy decisions
|
| It's as though so many people saw Brexit and completely refused
| to learn anything from it. In the UK prior to Brexit the EU was
| often the scapegoat for things that politicians wanted but knew
| they couldn't get popular support for, the classic example is
| how the unpopular (and ultimately abortive) attempt to switch
| the UK fully to the metric system was very much seen as "petty-
| minded EU bureaucrats getting one over on the British public"
| in the tabloids when the reality was that almost all of the
| effort was Westminster's doing, mostly because business
| interests had been calling for it as a way to ease
| international trade.
|
| The problem is that while falsely blaming an external outgroup
| for your problems isn't immediately dangerous, it can quickly
| spiral out of control. Around 2013 blaming the EU for bad
| policy-making on a wide range of things like immigration, the
| refugee crisis, a percieved decline in law and order, a
| creeping sense of political control over public discussion, and
| a whole list of other things reached its peak and the
| referendum was basically wrenched out of Cameron's hand.
| Eventually if you subvert a democracy by blaming your own
| unpopular choices on an outgroup, the inevitable question
| people start asking is "why don't we just get rid of $outgroup
| then? As you say, $outgroup cause all our problems so let's get
| rid of them and solve all our problems at once" which many
| billions of pounds and geopolitical bridges burned later is
| exactly what happened.
|
| If nations as you put it "defer to external international
| conventions to be the bad-cop for wildly unpopular policy
| decisions" then things like Brexit are the inevitable result.
| Not only is it inherently wrong to sidestep democracy like that
| in my opinion, if supranational organisations are blamed for
| things that are unpopular then their influence will eventually
| be damaged by this. Organisations like the EU, the UN, and
| others aren't just limitless negativity sinks for domestic
| politics - all that political negativity has to go somewhere
| and eventually it just spills out.
| cinntaile wrote:
| While it may be a cowardly way to divert responsibility I don't
| agree that this is so bad. This problem can only be solved by
| cooperating, otherwise companies can just shop around for the
| cheapest taxation rate.
| disposekinetics wrote:
| But isn't it good that companies shop around for the cheapest
| tax rate?
| whazor wrote:
| Now they can still shop around, but probably on all the
| benefits they will receive.
| jhrmnn wrote:
| In what sense is it good that a company can make profit
| through a business activity in some country, but instead of
| paying the tax there, it pays it somewhere else?
| jeofken wrote:
| Competition in economics is the incentive that has
| brought the majority of westerners from <$1/day to what
| we are today - with washing machines, cars, and water
| toilets no king could previously dream of.
|
| Companies compete for shareholders by satisfying as many
| customers as possible. If states can compete for the best
| deal for international business, companies can better
| serve people, and those states can house centres of
| international trade.
|
| It's not just abstract talk, but incentives that drive us
| to live different everyday lives than people in guild-
| economy medieval times, or past slave economies, or how
| people lived in the GDR or other eastern bloc countries.
| jhrmnn wrote:
| > serve people
|
| You wanted to write "shareholders", right?
| 3pt14159 wrote:
| The corporation that uses the roads and operates under
| the safety of the police and military of a country should
| not be paying some other country, it barely has anything
| to do with, a lower tax due to some accounting
| shenanigans.
| disposekinetics wrote:
| It minimizes the amount of taxes paid overall, which
| weakens the state.
| ginko wrote:
| How is weakening the state a good thing?
| jeofken wrote:
| State leaders have no incentive to create value, but
| rather to keep power.
|
| Companies must create valuable things people want, or be
| out of business in a very short time.
| ginko wrote:
| State leaders have an incentive to get reelected.
| Companies are only beholden to their shareholders which
| represent a tiny fraction of the population.
| [deleted]
| gmadsen wrote:
| this is a benefit only international corporations get to
| enjoy, which gives them an unfair advantage in the
| market.
|
| if your goal is to have a few conglomerates rule the
| world, then this is a good way to do it. Not sure how
| that is much different from a powerful "state" though
| jimbob45 wrote:
| Not sure why you're getting downvoted. Not only are you
| right, you're right even without speaking hypothetically
| because we can actively see this happening with companies
| moving to Ireland, Switzerland, and others.
| djbebs wrote:
| What's wrong with that?
| coryrc wrote:
| Gee, it's almost like taxing corporate profits twice has
| caused massive distortions everywhere: biggest stock price
| bubble, tax residency shopping, etc
|
| Tax the wealthy. Don't let them take "charitable" deductions
| or use tax-exempt IRAs. 100% inheritance tax above $4
| million.
| thaumasiotes wrote:
| > Gee, it's almost like taxing corporate profits twice has
| caused massive distortions everywhere:
|
| Sure.
|
| > 100% inheritance tax above $4 million.
|
| If you don't think this would cause "massive distortions
| everywhere", I have some bad news...
| riversflow wrote:
| >Tax the wealthy. Don't let them take "charitable"
| deductions or use tax-exempt IRAs. 100% inheritance tax
| above $4 million.
|
| Agree. especially about inheritance[1]. However, as I've
| said before corporate taxes are double taxation,
| corporation are paying their dues as every person involved
| with the corporation is freed from the liability of the
| business's actions by way of the state allowing liability
| limiting corporate entities to exist. When the business
| assumes liability from the owners, it also assumes tax
| responsibility.
|
| >has caused massive distortions everywhere:
|
| yeah, like in the global level of CO2, or the amount of
| plastic in the ocean, or the amount of mercury in fish,
| or....
| derefr wrote:
| That's what taxing corporate income (or more targeted,
| corporate _assets_ ) attempts to do: tax the wealthy.
| Because by-and-large, wealthy people don't accomplish the
| things they want to do by drawing an income and then
| spending it; but rather by setting up corporate vehicles
| that have their goal as the corporate mission statement,
| and then getting other corporations to fund its treasury
| (as negotiated compensation in deals) rather than funding
| them personally.
|
| Think about it like this: when I want to buy a house, I buy
| a house. When a billionaire wants to buy a house, they
| create a property management company (as a subsidiary of
| their existing business interests) that buys and rents out
| the house, negotiate for their existing business interests
| to fund it, and then they rent the house from that PMC.
|
| Excess liquid assets sitting in a large corporation's
| treasury, are essentially sitting in the wallets of its
| directors. They're left there only because the tax
| implications are better if they're moved toward their
| purpose-build vehicles at the last moment possible.
| asteroidbelt wrote:
| > That's what taxing corporate income does: tax the
| wealthy.
|
| No it doesn't. It equally affects both large shareholders
| and small shareholders. E. g. pension funds will get
| lower gains, and regular dudes 401k (or whatever they are
| called in your country) will get smaller yields.
|
| I don't have numbers, but I suspect the richest people
| get only small percent of large corporations income.
| asteroidbelt wrote:
| > Tax the wealthy.
|
| Please don't tax the wealthy. I have a couple friends who
| are in top 0.1%. They have enough money for the rest of
| their lives. If you start taking money from them, they will
| simply stop working and start spending more time with
| friends and family.
|
| The correct goal is not to take money from the rich (which
| can be achieved by taxing them; this is what Bolsheviks did
| and it resulted in millions of deaths from starvation), but
| to get rid of poverty.
|
| Taxing the rich won't help with poverty. Because if even if
| top 1% will be paying 100% taxes and still continue to
| work, total government tax income will be increased by 20%
| or so (that's from richest 1% get 30% of income). That's
| not a lot, and these money will be spent inefficiently by
| the government (as government always does).
|
| The government already has more than enough money, but it
| spends it inefficiently, and this issue need to be
| addressed (by fixing the system), for example:
|
| * fix gerrymandering
|
| * replace FPTP voting with some variant of ranked choice
| voting
|
| * increase the limits of the candidate money collection
| (currently they are very limited for the candidates, but
| unlimited for parties)
|
| So when more independent or less dependent on parties
| candidates are elected, more issues can be fixed, for
| example:
|
| * fix many regulations which drives hospital prices up
|
| * fix regulations which makes lives of ISP monopolies too
| easy
|
| and so on.
| ineptech wrote:
| > If you start taking money from them, they will simply
| stop working and start spending more time with friends
| and family.
|
| This model of the world assumes that "rich person" means
| someone with high income and "raise taxes on the rich"
| means raising the top marginal income tax rate. I don't
| think either is true and I struggle to imagine how you
| could be familiar with the financial details of the .1%
| and think otherwise. This model cannot survive much
| contact with actual rich people.
|
| People rich enough to be included in "tax the rich"
| mostly get their money from capital gains, and I don't
| believe that any rich person anywhere would ever decide
| not to invest their capital because the capital gains
| rate is too high. Even if capital gains were taxed at
| 90%, what else would you do with capital? Dollars sitting
| in a checking account cannot "spend more time with
| friends and family".
| asteroidbelt wrote:
| > People rich enough to be included in "tax the rich"
| mostly get their money from capital gains
|
| OK, so we are talking now not about income tax, but about
| capital gains tax? That's quite a different topic.
|
| But, also, no, capital gains tax should not be increased.
|
| Because you cannot become rich by investing into index.
|
| You become rich by founding a company while working 16
| hours a day and getting a large share of it. And after
| many years of that work with lots of failures and a lot
| of personal losses, you become rich.
|
| Some people try this path, many fail. If you tell them
| you can continue doing that, but in the end you will get
| slightly more than a regular dude working 8/5, they will
| think, why bother.
|
| Alternatively, you can become more rich by investing your
| personal money into something risky (like buy a share of
| your friend garage startup). Again, if cap gains tax will
| eat your gains, you won't do it next time. Why bother,
| better buy a condo and wait for it to grow.
|
| Increase cap gains tax, and you won't have new trillion
| cap companies in the US.
| pope_meat wrote:
| Tell your 0.1 friends to focus on all those points you
| made, and quick, because they will be the scapegoat for
| the mob.
|
| Things are getting bad enough to where "cutting ones nose
| to spite the face" starts to make sense, redistributing
| the misery the rich have insulated themselves from.
|
| Just my feeling on the situation.
| asteroidbelt wrote:
| > Tell your 0.1 friends to focus on all those points you
| made
|
| They know it already, most of my friends are classical
| liberals/conservatives.
|
| > they will be the scapegoat for the mob
|
| You are probably in the top 10% (as most people here on
| HN), so a lot of people here might become the same
| scapegoat.
|
| > Things are getting bad enough to where "cutting ones
| nose to spite the face"
|
| I'm not sure things are getting bad. Poorest people now
| are more rich than poorest people 30 years ago.
|
| Like in the US now average electrician makes 70K a year.
| That's a lot of money. And anyone can be electrician.
|
| They say income inequality raises, which is bad, but it
| might be not that bad, because common inequality measures
| do not includes the costs of free stuff given to poorest
| people from the government, like better free hospitals
| which they can use in case of emergency.
|
| > starts to make sense redistributing the misery the rich
| have insulated themselves from.
|
| As I said, taxing the wealthiest (especially with
| extremely high taxes like proposed by certain "liberal"
| activists) will not make poor people more rich. It will
| make poor people even more poor because of economic
| recession.
|
| Different measures are needed.
| kelnos wrote:
| > _I 'm not sure things are getting bad. Poorest people
| now are more rich than poorest people 30 years ago._
|
| > _Like in the US now average electrician makes 70K a
| year. That 's a lot of money. And anyone can be
| electrician._
|
| I would not consider electricians as an example of poor
| people. And no, not anyone can be an electrician. It
| takes training and licensing, and many people can't jump
| those hurdles. (Not to mention the fact that if everyone
| became an electrician, very few of them would get any
| work.)
| pope_meat wrote:
| I'm in the bottom 50% of the population money wise, but
| you're right, HN is definitely full of people in the top
| 10%, and so literally shortwire in their brains when I
| say something like "it's bad enough to where cutting ones
| nose to spite the face is starting to make sense"
|
| Because from your position it seems absurd.
|
| From mine it seems like the only move left to make.
| asteroidbelt wrote:
| > it's bad enough to where cutting ones nose to spite the
| face is starting to make sense
|
| What is the evidence that now is worse than say 30 years
| ago for the bottom 50%?
|
| It is perceived that it is worse now. But is it
| objectively worse?
| pope_meat wrote:
| Cost of education Cost of housing Cost of healthcare
|
| went up.
|
| Income
|
| went down.
|
| So I guess you're right, objectively things are much
| better, it's just my perception of paying 80% of my
| income to rent that's the problem.
| asteroidbelt wrote:
| > Cost of education went up
|
| If you need high education, you just take credit, and pay
| for it with your salary which is much higher than it was
| 30 years ago.
|
| And if you think that you won't be able to pay for credit
| because it's not possible to find a decent job with
| liberal arts degree, then probably you don't need that
| education.
|
| > Cost of housing went up
|
| I suspect that's because construction workers are paid
| well now. So instead of studying classical literature in
| high school, maybe study bricklaying.
|
| > Cost of healthcare went up
|
| This is the issue, but "taxing the rich" won't solve it.
| It need to be properly regulated. The fact that insulin
| costs $100 has nothing to do with taxes for the rich
| people.
|
| > Income went down
|
| Seems like it is not true. There's a chart: inflation
| adjusted median household income.
|
| https://fred.stlouisfed.org/series/MEHOINUSA672N
|
| It goes up.
|
| > perception of paying 80% of my income to rent that's
| the problem
|
| Man, I don't know your situation.
|
| Sometimes people pay for something they shouldn't.
|
| Like buying a shiny new car while old car only need
| occasional repairs, or buying top new iphones while
| cheapest android is 1/10 of that.
|
| When I was young I rented a flat which costed me about
| 70% of income, while I could rent a room for 30% of my
| income, or a flat for 30% of income and two hours
| commute. But it didn't matter because I was young, and I
| would not do that now. If that's your case, you may need
| to reconsider your worldview. If it's not, than I don't
| really know your situation to comment on that.
| pope_meat wrote:
| https://www.marketwatch.com/story/income-share-of-
| bottom-50-...
| asteroidbelt wrote:
| Why is that a problem?
|
| Looks like the issue is not that "I want to get rid of
| poverty" but rather "I want to get rid of rich people".
| sokoloff wrote:
| > Income went down.
|
| I'm having a hard time finding where in the chart that
| happened across the last 30 years. https://en.wikipedia.o
| rg/wiki/Real_wages#/media/File:United_...
| pope_meat wrote:
| https://www.marketwatch.com/story/income-share-of-
| bottom-50-...
| vlovich123 wrote:
| I think you've just described all trade treaties. Typically
| Congress still has to ratify. There's no anathema to democratic
| principles in my view. You've elected these leaders to
| represent the interests of the USA. Something you disagree with
| at some level will always be accomplished because that's the
| nature of democracy. In a dictatorship, you have perfect
| agreement provided that you are in the small group that holds
| meaningful power.
| ineptech wrote:
| I think you're misunderstanding the concept here, this has
| nothing to do with dodging responsibility for unpopular
| policies. If you think countries shouldn't tax corporate
| profits at all, great, but that's a separate discussion; this
| is predicated on the assumption that all countries desire a
| non-zero corporate tax, and just need a way to get there.
|
| The point of this measure is to avoid a coordination trap that
| leads to corp tax rates converging on zero even though each
| country does not want that. Such scenarios are well studied,
| and a mutually agreed upon enforcement mechanism is the optimal
| solution. If that resembles a conspiracy theory to someone,
| well, hopefully they can read the wikipedia page on the
| Prisoners' Dilemma and learn something new.
| doomroot wrote:
| Low Corporate tax rates invite corporations into your
| country. This benefits poor countries more.
| boredpeter wrote:
| How does turning the poorest people in a country into wage
| slaves "benefit" those poor countries? Those poor people
| would be better off just being self sufficient farmers at
| that point. Workers at foxconn were literally killing
| themselves because of how bad the conditions were. When do
| we as a society decide that industrialization makes life
| worse for a huge percentage of the population? These
| multinationals go into poor countries with no worker
| protection laws specifically to exploit people. That only
| benefits those multinationals and their owners.
| sokoloff wrote:
| Would the workers at Foxconn be better off if we took
| away their option to work at Foxconn? In general, if they
| thought that was their best option, it's hard for me to
| accept at that step an argument that providing them that
| option is making their life worse [than it would
| otherwise be]. Maybe there are a few more steps in the
| argument that make that position stronger?
| ineptech wrote:
| ...until a poorer country adopts a lower rate, and the
| corporation leaves. That's the trap this avoids.
| robertlagrant wrote:
| It's not a trap. The money will just never go to those
| countries now.
| thescriptkiddie wrote:
| https://en.wikipedia.org/wiki/Prisoner%27s_dilemma
| ineptech wrote:
| "trap" in this context means "coordination trap" which is
| a scenario in which competition forces individual actors
| to adopt policies they don't want, but can't avoid.
|
| Imagine you and I are neighboring farmers who irrigate
| our fields from the same river. Our farms grow, as does
| our water use, until we're each using half the water. I
| buy a bigger water pump and start sucking up most of the
| water, leaving you with dying crops. So you go out and
| buy an even bigger pump; now you're getting most of the
| water, and some of my crops are dying.
|
| What's the result? There are only two outcomes here:
| either we agree to split the water, or we spend more and
| more money on larger and larger pumps until neither of us
| has any profit left over. The latter outcome is the
| "trap" - neither of us wants to spend every spare dollar
| on pumps, but unless we come up with some agreement,
| that's what will happen.
| heurisko wrote:
| Joseph Stiglitz has written some interesting books on
| corporate behaviour in developing countries, such as
| "Globalization and its Discontents".
|
| The argument is, is that poorer countries, especially
| those with natural resources, would do better nurturing
| their own corporations, rather than creating policies to
| attract foreign corporations.
|
| The end result of preferring foreign corporations is a
| race-to-the-bottom where the end result is that
| corporations become a law unto themselves, operating as
| if they miniature states within the host state.
| CrazyStat wrote:
| Raising corporate taxes is generally popular, not "wildly
| unpopular." For example, in a recent poll 65% of Americans
| support raising corporate taxes [1]. This number has been
| fairly steady over time. It's even higher when you ask about
| closing loopholes that allow international tax havens, as this
| 15% minimum tax agreement is trying to do--70-85% support [2].
|
| The only terrible shame here is you laundering your opinion on
| corporate taxes by making false claims about them being wildly
| unpopular.
|
| [1] https://morningconsult.com/2021/04/07/infrastructure-
| corpora...
|
| [2] https://americansfortaxfairness.org/files/Polling-
| Questions-...
| conanbatt wrote:
| 65% is not enough to justify a loss of sovereignty. Once many
| countries agree to a treaty like this one, some country wont
| and becomes a tax haven and suddenly the target of sanctions
| and political pressure.
|
| This is the case with the OCDE literally calling countries
| with favorable taxation "tax paradises".
| la6471 wrote:
| Ye we support raising taxes on the overlords.... Let's vote
| on that.
| mbostleman wrote:
| I wonder what percentage of that 65% would claim to be
| against taxation that is regressive without realizing that
| corporate tax is exactly that.
| robomartin wrote:
| 65% of Americans have no clue what it takes to run a business
| of any scale. They can barely calculate a tip at the
| restaurant, yet they think they are qualified to make
| decisions on taxation.
|
| The flavor of democracy we practice has been good. However,
| we must be honest enough to admit it can degenerate into mob
| rule, which generally means decisions are made by the most
| gullible and ignorant among us on any specific topic.
|
| Simple example: There is no way my vote on a whole range of
| medical issues should have the same value as that of a
| medical professional, such as my wife. While I have a
| reasonable understanding of biology, the difference in
| knowledge and understanding in this area of knowledge is
| massive.
|
| In other words, I am as ignorant about medical matters as she
| is about engineering. It isn't an insult to classify me as
| ignorant in this category. It's the truth. Why do our votes
| have the same value?
|
| So, yes, 65% of Americans want to raise business taxes. They
| are ignorant fools being led by the nose by politicians using
| this ignorance to gain votes at their expense.
|
| The most important reality to understand us that politicians
| are never negatively affected by some of the nonsense they
| push. They don't lose their jobs, careers or level of pay. On
| the other hand, the fools who buy their nonsense very often
| end-up with the short end of the stick.
|
| Raise business taxes? No problem. More businesses will go to
| China if they are able to. If they can't, they'll reduce
| costs through automation. Some will do both.
|
| In a globalized economy we need lower taxes. Zero would be an
| even better number. Anyone who thinks otherwise suffers from
| a serious deficiency in perspective.
| amznthrwaway wrote:
| It is absolute nonsense to claim that taxing profits would
| encourage accelerated automation. These aren't just
| uncorrelated trends, but more automation will mean higher
| profit margins, which will mean more taxes....
|
| This sort of lie is common amongst a certain class of
| exceptionally dishonest right-wing shill who wishes to
| pretend that something inevitable (automation costs keep
| going down wildly) is actually the fault of the government.
|
| It's a shame that people like you insist on making such
| dishonest bad-faith arguments.
| realityking wrote:
| > In a globalized economy we need lower taxes. Zero would
| be an even better number.
|
| Isn't that point precisely addressed by the Biden
| administrations of setting a global minimum tax rate? If
| every country, or at least every country without signify
| the trade barriers (who cares what happens in North Korea)
| has the same tax rate than there's no incentive for
| companies to move their profits - or the entire company -
| abroad to save on taxes.
| kelnos wrote:
| I don't really see the point to all of this. There will
| always be loopholes that allow multi-national companies
| to avoid tax to some extent.
|
| Wouldn't it be simpler to just set corporate tax rates to
| zero, and instead raise taxes on income and -- especially
| -- capital gains? And the US already has a personal tax
| system where it doesn't matter where you earn income: if
| you're a US citizen, you have to consider US income
| taxes, period. So the problem where people try to push
| their personal income out of the country to avoid tax
| just doesn't crop up as much.
| zapdrive wrote:
| That's what the OP is saying. If the US had 0 corporate
| tax, no company would ever have to move out.
| robomartin wrote:
| If you think China and others will abide by this nonsense
| you might need to review how business is supported by
| government in China.
|
| Did you know they can export products at cost and still
| make up to 15% on their international sales? The world is
| not a level playing field.
|
| Did you know it costs them darn near zero dollars to ship
| products within the US, while US companies have to pay
| full fare?
|
| The ONLY way the US and Europe could rebuild a solid
| industrial base lost to China is to be so pro-business it
| would make most of the uninformed projectile vomit. If we
| can do that and maintain it for 25 to 50 years we might
| have a shot at it. Nothing else will work.
|
| Either we are a nation of pro-business entrepreneurs to
| the core or we resign ourselves to living in outsourced
| utopia. That's how bad it has gotten.
|
| Pick any product and try to source all of its components
| and manufacturing in the US or Europe. You won't get far.
| In most cases it is simply impossible.
|
| If we want a solid future we need to stop vilifying
| business. The 65% who don't have a clue will learn this
| only when it is too late to do anything about it.
|
| Perspective: We couldn't make PPE, the materials they
| require and the machines we would need to make them.
| Leherenn wrote:
| It seems to me China would generally be in favour of
| this. They're a large country with large internal
| consumption, and they would rather some of this money
| goes into their coffers than somewhere else. Generally,
| fiscal paradise are small countries which have little to
| lose by lowering taxes (to local business), and a lot to
| gain by attracting revenues from bigger countries.
|
| China's corporate taxes are much higher than 15%, so it's
| not like they would be directly affected by this. They
| might oppose the plan (I have no idea), but it's unlikely
| to be on an economical aspect of that's the case.
| tomp wrote:
| > There is no way my vote on a whole range of medical
| issues should have the same value as that of a medical
| professional, such as my wife.
|
| In June last year, the medical _creme de la creme_ were
| proclaiming that COVID antibodies last 3 months. I (an
| engineer with no formal biology training past high school)
| read some obscure studies that past Sars-Cov-1 infection
| seems to _still_ provide protection against severe Sars-
| Cov-2 infection, and it was also what my understanding
| about the mechanics of the immune system suggested ( _why_
| would antibodies only last 3 months? _how_ could the human
| race survive?!)
|
| Lo and behold, I was right, the "medical professionals"
| were wrong. TL;DR: common sense is worth at least as much
| as a medical degree. Also, never trust people whose
| incentives aren't aligned with yours.
| [deleted]
| GoodJokes wrote:
| This is so disconnected from reality that I fear you commented
| on the wrong article.
| nickpp wrote:
| It's a cartel of violence monopolies putting together a deal to
| raise their protection tax.
| weatherlight wrote:
| International corporations are not citizens. That premise is
| absurd.
| ginko wrote:
| Anyone got a list of the countries? I tried googling around a bit
| to try to find it. At least other articles[1] mention all G20
| countries are on board. That would include India, Russia and most
| importantly China.
|
| [1] https://www.bbc.com/news/business-57573380
| [deleted]
| AnimalMuppet wrote:
| I worry about a place like Russia. I could easily see them
| signing on to this. 15% of profit, just like everywhere else.
| But the reality might turn out to be that, for 1% of profit,
| under the table to the right person, they'd only take 5% of
| profit, but supply you with the paperwork saying that they took
| 15%.
|
| You know that someone will do that. If not Russia, someone
| else. There's too much money for it not to happen.
| foota wrote:
| Big companies would avoid this like the plague.
| mikeha wrote:
| https://www.oecd.org/tax/beps/oecd-g20-inclusive-framework-m...
| balsamiq wrote:
| Notably absent from the list: Ireland.
| Mortiffer wrote:
| Low corpate tax countries not on the list: Ireland 12.5%,
| Kuwait 0%, Hungary 9%, Kosovo 10%, kyrgystan 10%,
| Lichtenstein 12.5%, Moldova12%, Sark 0%(UK related but only
| had 1 active bank so perhaps they did not need it on the
| list )
|
| I am surprised that they managed to get most of the typical
| island states on the list to convert. And it will be super
| interesting if Kuwait and Sark can stay strong or if new
| companies will take the opportunity to address this market.
|
| https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_ra
| t...
| maverick-iceman wrote:
| Will this include rebate schemes?
|
| Also Africa and countries with low enforcement (either willing
| low enforcement or caused by scarce public sector resources) will
| have capital flowing in. Once the law is there the next race to
| the bottom will happen on odds of enforcement of such law.
|
| Russia, Ukraine, Georgia, Uruguay, Belize, Panama, UAE, Liberia ,
| the Caribbean.
|
| The usual suspects will continue to dominate the transfer pricing
| business, only they'd house foundations and 501c3 type vehicles,
| as well as private companies which are normally not in the
| authority watchlist. Such as the Trump Organization before he
| decided to run for President
| notsureaboutpg wrote:
| What corporation wants to do all the paperwork to spend all the
| money to establish all the shells to reside in a country where
| they technically legally owe the same tax but the government is
| just lax in collecting it?
|
| The government can change its mind any time and start enforcing
| and you will owe tax and have no way out of it. Moving again
| won't erase history if they claim back taxes.
| jcrites wrote:
| Honest question: what is the reason for there to be a corporate
| tax at all? When corporations distribute profit to their
| owners/shareholders, those people must pay income tax on it. Why
| not have the government get its share from income tax?
|
| Corporate tax seems like double taxation, and its existence
| seemingly means that all companies have a lower margin than they
| would otherwise, meaning that they need to charge higher prices
| to be equally profitable. For companies that sell products to
| consumers, one would presume this would result in higher prices
| for everyday items.
|
| In other words, isn't a corporate tax ultimately regressive
| because it causes companies that sell products to consumers to
| have higher prices? Companies that sell everyday items like food
| and essentials will pass on that corporate tax through higher
| prices to consumers. Meanwhile, any business owners/shareholders
| who receive substantial income pay income tax in the highest tax
| bracket for any income received from the company.
|
| Corporate taxes just seem to hurt margins, resulting in a
| regressive effect on the economy through higher prices, and
| discourage companies from conducting research and development, by
| again hurting their margins. Why not eliminate corporate tax and
| rely on income tax, or better yet a model like sales tax/VAT?
|
| There will be exceptions like business owners who start a
| business from nothing, see the net value of their shares rise
| into a billion dollar valuation, yet pay little in taxes --
| however they haven't necessarily sold those shares to receive
| income yet, and when they do they'll be taxed at the capital
| gains rate.
|
| You could argue that the capital gains tax (or qualified dividend
| tax) should be higher, which is an entirely separate matter from
| the corporate tax, but if you raise that rate then you discourage
| prospective business owners from starting businesses, and you
| discourage investors from investing and holding shares in
| companies for the long term.
|
| The top 1% of people by income already pay 40% of all taxes.
| Meanwhile, the top 2-5% pay the next 20% of all taxes; so the top
| 5% of earners collectively pay 60% of income tax. Given this fact
| it surprises me that people say that the rich need to pay their
| "fair share". https://www.heritage.org/taxes/commentary/1-chart-
| how-much-t... (Note that this is considering income, not wealth.
| We don't tax wealth, and I don't personally think we should while
| people live, beyond generally taxing real estate to pay for the
| services provided near that real estate, such as roads, police,
| schools, etc. I have mixed feelings about the estate tax i.e.
| taxes paid on inheritances at death).
| dane-pgp wrote:
| > The top 1% of people by income already pay 40% of all taxes.
|
| I believe that this famous misleading statistic is only true if
| you specifically limit it to federal income tax, not "all
| taxes".[0]
|
| Less misleading is to compare total taxes against total income,
| which is shown in a chart[1] included in the linked article. It
| shows that the top 1% earn 21% of the income, and pay 24% of
| all taxes.
|
| The real question is, why are the top 1% only paying 24% of the
| taxes when they own 39% of the wealth?[2]
|
| [0] https://theintercept.com/2019/04/13/tax-day-taxes-
| statistics...
|
| [1] https://theintercept.imgix.net/wp-
| uploads/sites/1/2019/04/ch...
|
| [2] https://jacobinmag.com/2017/10/wealth-inequality-united-
| stat...
| sand_castles wrote:
| So you are saying that the South Korean government will stop
| providing special subsidies to their Chaebol ?
|
| Low tax can be in the form of premium land grant, or govt
| provided healthcare for workers.
| krupan wrote:
| "For decades, the United States has participated in a self-
| defeating international tax competition, lowering our corporate
| tax rates only to watch other nations lower theirs in response.
| The result was a global race to the bottom: Who could lower their
| corporate rate further and faster? No nation has won this race,"
|
| Translation, "We want to have these corporations in our country
| so badly that we keep paying more and more for them in order to
| compete with the other countries that also want them. We now want
| to collude with these other countries to keep our costs lower."
|
| Sounds an awful lot like price or salary fixing. Who is actually
| going to pay for this in the end?
| runarberg wrote:
| > Who is actually going to pay for this in the end?
|
| The companies them selfs I presume. If tax evasion is a
| necessary requirement for the existence of multinational
| companies, or--in other words--if multinational companies need
| government subsidies to stay afloat, perhaps they can just die
| in bankruptcy.
|
| More realistically, the companies will do just fine paying
| their fare share of their profits back to the states that
| provide them with infrastructure and skilled workers. I mean it
| is not like a multi-million dollar yacht for your CEO is
| necessary for the company to continue its operation.
| repsilat wrote:
| Isn't it a consensus position among economists that corporate
| taxation is inefficient and badly targeted? That taxes on
| individuals (wages, goods&services, capital gains) and on land
| are easier to collect and better at providing desired
| incentives?
|
| Really, isn't a "race to the bottom" a virtuous cycle here?
|
| Kinda weird to see Yellen -- Treasury Secretary and former Fed
| Chair -- making this kind of statement.
| nonameiguess wrote:
| Actually a common reason given for having corporate taxes is
| they're easier to collect since you collect from fewer
| payers.
|
| The biggest problem is they obscure tax burden. All tax
| burden is ultimately born by individuals. If you levy on the
| corporation instead of the individual directly, then the
| burden just gets divided between clients, suppliers, owners,
| and employees, and how it get divides ends up depending upon
| the relative price elasticity of demand for each of their
| services. When taxes are levied on individuals directly, how
| the burden gets distributed can instead be codified in law.
|
| At least in that sense, corporate taxes are somewhat anti-
| democratic. Politicians and voters are out for blood on this,
| but what they really want is for the owners to pay more tax.
| That can be better accomplished by just taxing capital gains
| and carried interest.
|
| There is, of course, also tremendous deadweight loss in that
| business decisions are often dictated by what results in the
| best tax treatment rather than what is economically optimal.
| The fact that it actually makes financial sense to entirely
| relocate operations to other countries is itself a pretty big
| indictment of taxes like this. That's a huge amount of
| resources being allocated in a way that does not result in
| any improvement to the goods and services.
|
| But, to the point of this treaty, if they're not going to
| eliminate corporate taxes and tax owners directly instead,
| the next best thing is at least make the taxes the same
| everywhere so the relative change in rates will stop
| dictating business decisions.
| dantheman wrote:
| Seems like it's easier to eliminate corporate taxes - no
| coordination needed at all.
| ericffr wrote:
| Her point is that no country can survive with zero tax.
| Everyone knows that. In order to have roads, schools,
| hospitals, parks, police, you need everyone to chip in,
| specially huge corporations who know how to subvert the
| system for their own benefit (meaning their shareholders)
| dantheman wrote:
| Why not just have property tax and pay everything off that?
| bronzeage wrote:
| When the majority of wealth is held by billionaire corporate
| owners, and the only tax they pay is corporate tax, not even
| selling their shares, what other option do you have to tax
| them?
| throwaway34241 wrote:
| The corporate profits that are being taxed normally would get
| distributed to shareholders via share buybacks or dividends
| (so will appear to them as capital gains or income).
|
| Taxing this is basically taxing money earned from owning
| things vs money earned from working.
|
| I'm not aware of a consensus that one is always better than
| the other. I would imagine it would depend on the
| circumstances of the economy and what the current tax rates
| are. If you tax income from owning things too much, that
| would probably discourage saving and investing money, but of
| course taxing wages discourages working (and lowers the
| after-tax income of workers).
|
| I would say that in the current environment, the cost of
| money (interest rate) for companies that want to make
| investments (building housing, factories, etc), is already
| pretty low by historical standards.
|
| One of the common problems with the corporate tax is that
| it's hard to say which country the profits belong to (global
| companies can shift the profits around very easily by
| changing the prices their international subsidiaries charge
| each other). The article is an attempt to address the profit-
| shifting issue. There are also other ways to address that,
| but they might be harder to implement since they would
| involve more substantial changes to the tax code.
| [deleted]
| beprogrammed wrote:
| International solutions, for international problems of
| international corporations.
| patrickaljord wrote:
| Next year the US will spend $715 billion on military budget
| alone, a $10 billion increase from last year. Shouldn't the
| government try to cut spending before thinking of how it could
| increase tax revenue?
|
| It's like an obese person wanting to lose weight while eating
| more each year and thinking of increasing time spent at the gym
| to make up for it, shouldn't they try eating less if they want to
| lose weight?
| akvadrako wrote:
| The military budget is a red herring. If the budget was reduced
| to zero it would barely effect the deficit, yet over the long
| term it would probably cost more, since a weak nation invites
| war.
| naveen99 wrote:
| USA has about a 100 trillion in wealth. Spending 1% of it to
| insure its safety seems about right. How much would you spend ?
| standardUser wrote:
| This is not about increasing tax revenue it is about preventing
| multinationals from evading taxes. It's similar in concept to
| the Alternative Minimum Tax, which was designed to prevent an
| ever-increasing web of exemptions and loopholes from allowing
| some people to pay little-to-no taxes.
| dantheman wrote:
| Taxes aren't a virtue - they're a necessary evil. They're
| coercion, only paid on the threat of violence. We should be
| aiming to minimize taxes and fund programs through other
| voluntary means. So where the money is being spent should be
| considered when talking about how much should be raised,
| since it the cause.
| samsonradu wrote:
| No. Losing weight might read as being weaker. Why would any gov
| want that?
| mustafa_pasi wrote:
| This is a new kind of imperialism. The G7 makes up the rules,
| under the guise of fighting tax evasion or financing of terrorist
| activities. Then they make all the less powerful countries comply
| to those rules. If they do not, they get greylisted or
| blacklisted by some "international" watchdog, making it much
| harder for those countries to participate in the global economy.
| Of course only the poorer less influential countries will suffer
| under such arbitrary rules dictated by the G7. Nobody is going to
| greylist the US or Germany.
|
| It is effectively a new mechanism for the G7 to encroach on the
| sovereignty of other countries.
|
| And if you tell me, taxing international corporations is a good
| thing, I agree, but it is just a pretense. Just a setup. The G7
| can also just tell those international corporations to fess up
| the money. They have enough influence to do just that. There is
| no reason to include Poland, Sri Lanka or Botwana or Bolivia in
| this agreement. The reason those countries are included is so
| that later on, the same agreement can be used to blackmail those
| countries.
| jhrmnn wrote:
| Do you actually have any backing for these claims, or is this
| all pure speculation?
| xster wrote:
| Also interesting (secret TPP) bit: "The deal also reportedly
| includes a framework to eliminate digital services taxes, which
| targeted the biggest American tech companies."
|
| In other words, if you sell to us, we'll call it dumping, but
| in areas we monopolize, sovereign governments must have no role
| in the free market.
|
| Up next, countries in the system must respect human rights as
| defined by Radio Free Europe.
| reeealloc wrote:
| https://en.wikipedia.org/wiki/Slippery_slope
| asdfasgasdgasdg wrote:
| It does seem like e.g. the US could impose this unilaterally.
| You, a company, have to make two tax returns: one on all the
| money you made here, and one on all the money you and/or your
| relevant "parent" corporation made elsewhere. Same rules to
| calculate taxes in both cases. On the latter return, you can
| subtract the sum of the taxes you paid elsewhere from the tax
| owed. The rest belongs to the US government.
|
| At that point there'd be no point in a country offering cut-
| rate taxes to any corporation that does substantial business in
| the US, because taxes on any profit realized internationally
| will still be collected. It's just that the US is taking them
| rather than the country that's offering the cut-rate tax deal.
| So that country (Ireland or whoever) no longer benefits from
| having low corporate taxes, and they might as well have taxes
| at least as high as those in the US.
|
| It seems like any sufficiently important country or union could
| impose a rule like this if they wanted to. There must be some
| facet of international law that prevents it, or some other
| complexity to the idea that I'm missing.
| asteroidbelt wrote:
| Yes, this is exactly what the US does with US citizens: they
| pay the maximum of the US income taxes and the residence
| country income taxes.
| heavyset_go wrote:
| > _they pay the maximum of the US income taxes and the
| residence country income taxes._
|
| The IRS collects on income over $108k/year, and income over
| that amount is taxed at that bracket and higher. Foreign
| Tax Credit also prevents double dipping by the IRS.
| realityking wrote:
| I'm neither a lawyer nor an accountant but I'd expect it to
| run counter to all existing double taxation agreements. All
| those agreement would have to be cancelled or renegotiated -
| that's a lot of work.
| eecc wrote:
| Why? The parent suggested to discount the tax paid abroad
| from the taxes to be paid in the US. It _is_ the double-
| taxation prevention agreement.
|
| Me being a cynical bastard will expect countries rallying
| to offer themselves _to the US_ and reduce their cut to buy
| political favor.
| throwkeep wrote:
| You'll own nothing, and you'll be happy.
|
| https://www.youtube.com/watch?v=lBBxWtKKQiA
| ceejayoz wrote:
| Sounds scary out of context, but it's hardly a silly
| prediction.
|
| Uber, AirBnB, clothing rental, device upgrade plans...
| asteroidbelt wrote:
| It is not bad as long as you own stocks, which you can
| exchange into material goods.
|
| Like some of my friends can afford a decent house, but
| prefer renting because it gives greater flexibility (they
| can rent a small flat in the center of the city in a
| walking distance to the office and meet with friends often
| while they don't have children instead of investing into
| big house in the suburbs with empty rooms they don't use).
|
| But if you own nothing and don't save, this is bad.
|
| The UK did a great thing last year, they increased to
| minimum payment to private pension (equivalent of US 401k)
| to 8% of salary, so even irresponsible people will have
| some savings at retirement age. And I think the UK should
| continue gradually increasing these contributions.
| clusterfish wrote:
| Is the whole concept of international agreements offensive to
| you? I don't see how this one is special. Bigger countries
| always have more influence, such is life.
|
| Sovereignty goes both ways. No country is obligated to deal
| (allow trade or capital flows) with any other country they
| don't want to. If this agreement will even have such
| enforcement.
| jessaustin wrote:
| Two-thirds of humanity, which makes sense because one wouldn't
| expect much overlap with the third of humanity who suffer USA
| economic sanctions. Different methods for accomplishing the same
| goals...
|
| https://sanctionskill.org/wp-content/uploads/2020/03/39Sanct...
| midjji wrote:
| It would also require a global consensus on tax incentives.
| Which... well if you thought the global minimum corporate tax was
| unlikely...
| neil_s wrote:
| Surprised to see the negative comments, despite HN comments'
| usual bent. As someone that moved around multiple countries, I
| was impressed by the US' tax by citizenship on global income.
| About time we apply the same to corporations as we do to
| individuals, given how much easier it is for corporations to move
| their income around.
| LatteLazy wrote:
| Does anyone know at what point the tax is paid? I ask because
| publicly traded companies avoid it by doing share buy backs. So
| Apple technically makes no profit. 1% or 15% or 100% of
| technically nothing is nothing...
|
| >The deal also reportedly includes a framework to eliminate
| digital services taxes, which targeted the biggest American tech
| companies.
|
| Quid Pro quo Clarice!
| goodcanadian wrote:
| Share buybacks are not a business expense. They are paid out of
| after tax income; they are not tax deductible.
| jacobr1 wrote:
| The classic offshore approach is that Apple USA doesn't make
| any profit because they find a way to make the accounting work
| such that Apple Ireland actually made the profit. It only
| becomes income or dividends when it gets transferred back to
| the USA.
|
| An example might be to assign the patent ownership for the new
| M1 chips to the Ireland subsidiary. Sell them for $1. Then
| charge the USA based firm $1 billion in licensing costs. Make
| $1 billion in income selling the chips. Boom $0 profit. Except
| now there is massive profit in the Ireland subsidiary, which
| can pay very low taxes. The problem is that the money is stuck
| there. If they give it back the parent company as a dividend,
| then that is income to the parent.
| mwint wrote:
| Apple might make no profit, but wouldn't the shareholders
| selling their stock back to Apple have to report the sale as
| capital gains? So (at least some) taxes would be paid on that
| money, just not by Apple directly.
| LatteLazy wrote:
| So, if they paid a dividend apple would pay Corp tax AND the
| share holder would pay cap gains. A buy back avoids the Corp
| tax and let's the shareholder delay paying (until they sell)
| and also pay a lower rate if they're careful (long term
| holdings I think get a lower rate, 10% I think?).
|
| There is another reply here saying Corp tax is still due. I
| didn't think it was but I'll check after dinner.
| ClumsyPilot wrote:
| If my shares are handled by an LTD I'll never pay tax
| because i will keep reinvesting that monet.
| LatteLazy wrote:
| You'd pay once you took the money out right?
| CryptoPunk wrote:
| This alone:
|
| >>The deal also reportedly includes a framework to eliminate
| digital services taxes, which targeted the biggest American tech
| companies.
|
| >>In their place, officials agreed to a new tax plan that would
| be linked to the places where multinationals are actually doing
| business, rather than where they are headquartered.
|
| Was enough to address this concern:
|
| >>If widely enacted, the GMT would effectively end the practice
| of global corporations seeking out low-tax jurisdictions like
| Ireland and the British Virgin Islands to move their headquarters
| to, even though their customers, operations and executives are
| located elsewhere.
|
| Not only can the concerns that are being used to justify a global
| minimum tax be addressed through other means, the tax agreement
| itself is a terrible policy, because it freezes the evolution of
| tax policy for the whole world, presupposing that an income tax,
| and specifically a corporate income tax, is ideal.
|
| There are structural problems with the corporate income tax, and
| many economists argue for eliminating it altogether, and
| replacing it with other types of taxes (e.g. a transaction tax, a
| carbon tax, a land tax, etc). But this locks it in place as a
| constant for all countries.
|
| It's exactly this kind of homogenization of governance that
| Europe had to get past to prosper:
|
| https://aeon.co/amp/essays/how-the-fall-of-the-roman-empire-...
| onlyrealcuzzo wrote:
| Corporate tax has only been evolving recently to the benefit of
| the largest companies primarily benefit the richest individuals
| in the world.
|
| It's fine if you want it to continue evolving, but I don't.
| jessaustin wrote:
| As if "locking it in" weren't bad enough, the billionaires also
| propose to lock in the USA system that they have already
| completely reconstructed to their own benefit.
| blhack wrote:
| The US will immediately leave this compact as soon as a fiscal
| libertarian takes office.
| bgorman wrote:
| What fiscal libertarian has a reasonable chance at becoming
| president? I'm not aware of any
| DevX101 wrote:
| Did a quick cross ref for the non-signatories ranked by GDP:
| https://pastebin.com/YyYTV65i
|
| I'd predict corporations to move to countries on this list that
| are non-sanctioned, high rule of law index, and easy to do
| business in.
|
| Ireland and Estonia in particular come to mind.
| purple_ferret wrote:
| signing on to this should be a requirement to stay in the EU
| novok wrote:
| I'm surprised %0 taxes on everything UAE is implicitly a
| signatory! The list of countries:
| https://www.oecd.org/tax/beps/oecd-g20-inclusive-framework-m...
| lordnacho wrote:
| That made me wonder, what's to stop a country from having a
| high rate but also offering a tax credit? Or some sort of
| disguised give-back?
|
| If you Google the Malta Corp tax rate, you find 35%. You need
| to dig a big more to read that actually you can get 30%
| refunded. Haven't tried it myself.
| r00fus wrote:
| Ireland is a big hole. Many corps have huge nexus there simply
| to avoid corporate tax. Would the Dutch-Irish double-sandwich
| still work - maybe with another country?
| NoboruWataya wrote:
| It doesn't even work right now - the rules that enabled that
| structure have already been phased out.
| patrickaljord wrote:
| Do you have a link to the list of signatories?
| RPaaS wrote:
| https://trumpwon.biz/
| okareaman wrote:
| Instead of trying to change the behavior of other countries, why
| not implement an alternative minimum tax for companies that do
| business in the United States?
| cryptoz wrote:
| Corporations should be taxed on revenue, not profit.
| brobinson wrote:
| Restaurants and other low margin businesses would cease to
| exist under this plan.
| [deleted]
| Retric wrote:
| That's a common misunderstanding, restaurants are low margin
| due to competition. As long as the industry moves in lockstep
| with cost increases the margins stay the same.
|
| Sales taxes for example vary widely yet have minimal impact
| on low margin business. Lower them and customers save money
| but restaurants margins stay the same.
| lordnacho wrote:
| So what you're saying is this tax is effectively going to
| be paid by the consumers?
| jacobr1 wrote:
| For the same reason though, complementary goods don't
| necessarily have the same tax burden or margins. So the
| distribution of purchases might shift. Restaurant-goers
| might just eat at home more, or maybe even just go out to
| more expensive places that can operate with lower margins.
| rootusrootus wrote:
| Why? If it were applied across the board, then every business
| would just treat it like any other business expense and price
| accordingly. On a theoretical zero-margin business it would
| translate dollar-for-dollar right to the customer, yes?
| Aunche wrote:
| The problem is that you're incentivizing the creation of
| vertical monopolies. A small restaurant is forced to rely
| on suppliers who would pass the revenue tax onto the
| restaurant. Meanwhile, McDonald's can afford to buy their
| own suppliers. McDonald's suppliers would technically not
| make any revenue, so they get to pay less in tax.
| permo-w wrote:
| that's a big oversimplification
| bpodgursky wrote:
| Of all the arguments to be made about corporate taxation, this
| one makes the absolute least sense.
| advisedwang wrote:
| Taxing revenue does shut off many tax loopholes. Accounting
| can play lots of games with profit/loss, but revenue is much
| harder to obfuscate.
|
| However this basically just seems like a Sales Tax to me,
| which we already have in most countries.
| evanrich wrote:
| And would kill a lot of low margin businesses right?
| bpodgursky wrote:
| Right, it is crazy to treat the revenue of 2% margin
| grocery stores the same as 50% margin SaaS products. I
| don't know what kind of economy these people are trying
| to build.
| jacobr1 wrote:
| Which is why this thinking morphs from sales-tax to VAT, so
| it captures the revenue across the supply-chain.
| njarboe wrote:
| I would say that most of the problems with wealthy people not
| paying their "fair" share (what ever that might be) is the
| fact that people are taxed on income and corporations are
| taxed on profit. Many wealthy people do what they want to do
| with companies (taxed only on profits) or non-profits (not
| taxed at all!), while the average Joe is taxed on their
| income. It would be a good idea to have both people and
| companies taxed the same way.
|
| Personally I think it would be good to get rid of income and
| corporate taxes all together and replace it with a land value
| tax. So much more freedom, less regulation, and crazy tax
| loopholes.
| jacobr1 wrote:
| The answer seems to be that we should tax capital gains and
| income at the same level. This would disincentive
| investment on the margin, but it seems like it might be the
| better tradeoff. Alternatively you can go the other rough
| and tax consumption (progressively) which would benefit
| accumulation.
| lordnacho wrote:
| Why not just consider every person a corporation? If it
| make 100K and it costs you 90K to run your family (yes
| there will be special rules) you pay tax on the 10K.
|
| If you make 1M and it costs you 400K to run your family,
| you pay on the 600K.
|
| If you spend more than you earn, you carry forward the
| loss.
|
| Land value tax makes sense on paper, but implementation is
| a huge question. Who decides the price, how often is it
| revised, how do you make it transparent? Maybe "solve" that
| issue with a trick: everyone decides their own value and
| thus their own tax, but whatever value they decide is a an
| offer to the market: if you think the person is
| underpricing their land, you can buy it from them at that
| price.
| b3kart wrote:
| Would the land tax work well with, say, tech companies
| though? To me it seems those take advantage of completely
| different resources. Internet infrastructure, data,
| attention, you name it.
| petermcneeley wrote:
| In the limit of free flowing capital and goods this minimum is
| likely to also be the maximum. This will lead to a more
| homogenous and uniform financial situation across all countries.
|
| A much better idea would be tarrifs. A country can tax each
| corporation as they see fit and what is in line with their
| values. They can also then have corporate or other taxes in line
| with their values. This would lead to a diverse menagerie of
| various governments and various kinds of financing. I would argue
| this is healthier than every country becoming the USA.
| handrous wrote:
| Why would this put downward pressure on the _maximum_ corporate
| tax? The current minimum is 0%. Why isn 't 0% also the _de
| facto_ maximum, right now? Why would _raising_ the minimum
| force it to (tend to) equal the maximum?
| petermcneeley wrote:
| ~0% is what many pay right now because various mechanisms are
| used to pay the tax of the lowest country tax rate. So if you
| enforce a minimum then likely they will pay ~min%.
|
| This is a game theory problem not an economic or political
| one.
| handrous wrote:
| Ah, so you'd propose that 0% is the current _de facto_
| minimum _and_ maximum, and that raising the minimum is bad
| _per se_? I took your original post to mean that states
| would not, practically speaking, have the liberty to impose
| even higher rates if a _de jure_ minimum were imposed,
| while currently they _do_ , but... rather you seem to
| disagree with the direct point of the move itself, which is
| to prevent under-cutting some minimum above 0%? Or am I
| misunderstanding you?
| petermcneeley wrote:
| If the point is for every country to have the same tax
| rate then yes this solves that problem. Each country
| cannot impose a higher rate de jure for the same reason
| why now the effective rate is 0%.
| handrous wrote:
| ... but they all have (effectively) the same rate either
| way, no? The point isn't for them all to have the same
| rate, it's for that _existing_ same rate to be higher,
| right? That it would be, in effect, the same, isn 't an
| outcome of this move. That that same rate would be non-
| zero is the outcome.
| petermcneeley wrote:
| Well no they dont need to have the same rate they just
| need to implement tariffs.
|
| With tariffs one could choose to tax with prejudice. You
| could tax specific corporations higher or lower or
| specific industries (gas/coal). Or even give tax breaks
| to specific industries.
|
| This move is a move towards uniformity and specifically
| uniformity with the USA. I dont think the USA is the
| model of fiscal governance that much of the world wants
| to emulate. If one really cared to one could probably
| find the various loopholes of the powerful in this new
| minimum as well. However this is just investing time and
| effort into thinking about a bad idea.
| jbaudanza wrote:
| Imposing taxes on a legal entity always seemed fishy to me.
|
| Politically, it sounds great to say, "Make the corporations pay
| their share!", but who exactly are we targeting with these taxes?
| Is it the rich executives? Why not just raise taxes on the rich
| directly?
|
| I suspect in most cases the tax burden is just shifted onto the
| lower-income workers or the customers somehow.
| UnpossibleJim wrote:
| One of the even bigger issues with this bill is the lack of
| accountability in government spending. This does nothing to
| tackle military spending or riders tacked on to bills that have
| nothing to do with the proposed spending bill.
|
| If politicians _really_ wanted to make people happy and get
| things under control, it would be transparency in spending and
| no riders on spending bills. This is just another way to wring
| more money out of a populace with a better sales pitch by
| saying, "Make the corporations pay their share!", knowing full
| well that people don't consider the down stream effects on
| middle and lower class economic systems.
| PoignardAzur wrote:
| I mean, I don't disagree that governments can spend their
| money in undesirable ways, but in general increasing
| government revenue is a good thing.
|
| Maybe this bill doesn't stop oversized military spending, but
| it at least puts a damper on the race to the bottom of
| countries offering low taxes to gigantic corporations.
| dougmwne wrote:
| What stops a person from creating a legal entity to funnel your
| activities through to personally avoid taxes? If the corporate
| tax rate is 0% and the individual tax rate tops out at 40%, the
| incentives to practice this kind of avoidance are strong.
| magila wrote:
| Existing tax law already covers this. If you use a corp to
| fund personal activities that is a benefit-in-kind and
| subject to income tax same as if you received the money
| directly.
| handrous wrote:
| > Politically, it sounds great to say, "Make the corporations
| pay their share!", but who exactly are we targeting with these
| taxes?
|
| I just think of it as forced public ownership of a fraction of
| the shares of companies chartered & granted special privileges
| by the public's government, but with extra steps.
| bradford wrote:
| > it sounds great to say, "Make the corporations pay their
| share!"
|
| the Global minimum tax rate is only tangentially related to the
| 'make corporations pay their share' problem. The real problem
| is a 'race to the bottom' where corporations will shop around
| and put tax headquarters in the country with the smallest tax
| rate (i.e., Ireland).
|
| > I suspect in most cases the tax burden is just shifted
|
| The big question for me is: is it _really_ a significant tax
| burden? or do the companies choose nations with the lowest tax
| rate because they are seeking a competitive advantage, and
| thereby inducing all their competitors to make a similiar
| choice?
|
| the minimum tax rate is trying to level the playing field in
| this regard.
| novok wrote:
| It's a collusion agreement amongst the government industry to
| not compete with each other on this one aspect.
| Mordisquitos wrote:
| Yes, I agree. I myself have always wondered about the opposite
| strategy: literally _zero_ corporation tax, compensated by an
| overarching income-agnostic personal income tax which would go
| up to stupidly high percents in the stupidly high income
| brackets, say for the sake of the argument 80% above 1 million
| EUR /$/PS, 90% above 10 million, 95% above 100 million etc. I
| don't necessarily mean these specific values, but you get the
| idea.
|
| This income tax wouldn't care if the individual's income is
| salaried, or dividends, or stocks, or real estate, or
| whathaveyou. Any transfer of wealth from an un-taxed business
| to a taxable individual would count equally. Of course, the
| zero corporation tax would be conditional on _all_ of a
| corporation 's profits being distributed to individuals in
| states subject to the zero-corporate-hardcore-income tax
| agreement. I'm sure it would be extremely difficult to
| implement correctly, and to avoid tax avoidance schemes it
| would also require strong levels of capital controls with non-
| participant nations.
|
| I may be a bit naive, but intuitively I feel that erasing
| corporation tax altogether but highly taxing all individuals'
| personal profits may encourage innovation and reinvestment, and
| perhaps even make UBI a feasible option.
| chalcolithic wrote:
| Don't own, rent everything. How will you handle that?
| handrous wrote:
| How's that relevant? I'm not weighing in on the broader
| wisdom of the parent post, but I don't see how that affects
| anything.
| lordnacho wrote:
| If we did that, rich people would keep a corp as a piggy bank
| and only pay taxes on whatever they took out. Most of the
| money would stay in the corp and be use on various
| investments.
|
| To a degree this is already what people do (eg contractors),
| except they have to pay some corp tax each year on what they
| made.
| magila wrote:
| How is that any different from having money invested in
| stocks/real estate/etc today? Unrealized capital gains
| aren't taxed regardless of whether the asset is held by a
| corp or individual. In any case it's when the person
| realizes the gains that a taxable event is triggered.
| lordnacho wrote:
| The difference is it can be a realised gain that you'd
| then not pay tax on. Eg the Corp makes 100 in profits but
| at zero it doesn't pay out anything.
|
| For unrealised gains you're right, there's no difference.
| magila wrote:
| Ok, but corp owner still can't benefit from the gain
| without generating a taxable event. Either they pull the
| money out directly or receive a benefit in kind. In
| either case it gets taxed as regular income so in that
| sense the person would actually be in a worse tax
| situation assuming capital gains is taxed at a reduced
| rate.
| 3pt14159 wrote:
| Most things that wealthy people want that has to be
| purchased with after tax dollars, like I don't know a
| flight to visit a family member, they can pay for just
| fine out of the pittance they pay themselves in salary.
|
| The real trick they pull is making everything a company.
| A man building a model rocket at home? That's with after
| taxed dollars. A man building a rocket to the moon?
| That's a business. Goes for all sorts of things. At some
| point you have to say, no, corporations please pay tax as
| you make it.
| tick_tock_tick wrote:
| It's much easier to force a corp to pay dividends or do a
| share buyback than it is to chase them around the world
| with some horrible tax policy. A 0% corporate tax with law
| to prevent excessive hoarding of cash in the corporation is
| the only sane solution.
| lordnacho wrote:
| The law to prevent cash hoarding is just a tax, no?
| jcrites wrote:
| How much cash a corporation holds should be a matter for
| the corporation's CEO, board, and shareholders to decide.
|
| If the shareholders are comfortable with the company
| sitting a on large amount of cash as a rainy day fund, or
| a reserve that can be used for large acquisitions,
| significant new research efforts (maybe Apple wants to
| build cars, and self-driving ones) etc., then who's
| complaining?
|
| With $195 billion in cash reserves, Apple couldn't e.g.
| buy a semiconductor company like TSMC outright (market
| cap $623B), but one could imagine that there are plenty
| of companies that Apple might like to have the ability to
| buy that are in the several-to-ten billion dollar range.
|
| If a substantial number of shareholders are unhappy with
| Apple's cash hoard then a large enough coalition could
| force a vote to distribute a portion of the cash as
| dividends, or use it for a stock buyback; or pressure
| management changes at the company, etc.
|
| So far, the fact that Apple investors appear to be
| comfortable with its cash reserves suggests that Apple
| investors believe that Apple will either (1) lobby for
| policy changes that enable it to bring the cash back to
| the US without paying considerable taxes, at which point
| it will distribute them as dividends or stock buybacks;
| or (2) they believe Apple will use that cash for
| investments/acquisitions that will generate more returns
| than the investors themselves would generate if the same
| cash were distributed immediately to shareholders.
| tick_tock_tick wrote:
| > How much cash a corporation holds should be a matter
| for the corporation's CEO, board, and shareholders to
| decide.
|
| Or whatever the law says.... I don't particular care that
| Apples investors have no issues with them building cash
| reserves.
|
| The TSMC example is actually a very good point that
| allowing corporations to build huge cash reserves allows
| incumbents too much power in the market.
| runarberg wrote:
| I think you'll find hints of the answer in the fact that most
| countries are pretty bad at collecting taxes from the rich
| already. It is fairly easy if you are rich to hide your wealth
| and evade taxes. I suspect it might be a little more difficult
| for a publicly traded company to hide its wealth the same way.
| mullingitover wrote:
| > Politically, it sounds great to say, "Make the corporations
| pay their share!", but who exactly are we targeting with these
| taxes? Is it the rich executives? Why not just raise taxes on
| the rich directly?
|
| Pretty basic megarich person accounting: You realize zero
| income, you just hold a lot of valuable assets, and you pay no
| taxes.
|
| "But surely they must have some income to live on!" you argue.
|
| Nope, you get a $10 million loan backed by your assets. You
| spend that loan, _which is not income_ , tax free. When the
| time comes to pay back that loan, obviously the next move is to
| get a $20 million loan. You can keep rolling these loans tax-
| free until you die. "Aha, now the estate pays the taxes!"
| except there are a multitude of other loopholes for evading
| inheritance taxes.
|
| On paper and at first glance it seems like everything is fair
| (which is the goal, to _seem_ fair), but only the most
| incompetent ultra-wealthy person is pulling anything close to
| their own weight when it comes to taxes.
| dantheman wrote:
| Except that doesn't happen?
|
| Bezos paid 973 Million in taxes [1], note that article
| conflates income and wealth in a truly economic illiterate
| way.
|
| https://www.seattletimes.com/business/irs-records-show-
| wealt...
| mullingitover wrote:
| Bezos is playing it pretty straight, but then again 973
| million is basically pocket change for him, also let's not
| forget about the year he paid zero taxes and got a _refund_
| :
|
| > Bezos filed a tax return in 2011 reporting he lost money
| because of bad investments, allowing him to claim and
| receive a $4,000 tax credit for his children, according to
| ProPublica.
|
| Anway Bezos is far from the only mega-rich person, for
| example from that article you cite:
|
| > Another wealthy person whose tax data ProPublica obtained
| was Carl Icahn, the activist investor who built his wealth
| through corporate takeovers. He paid zero income taxes in
| 2016 and 2017, partly because he was able to deduct
| interest expenses on loans from his "adjusted gross
| income," ProPublica said.
| dantheman wrote:
| When looking at a single year for people who have losses
| and expenses it can paint quite a misleading picture.
| Over 10 years how much did they pay, is a much better
| question.
| mullingitover wrote:
| How about not paying taxes 10 out of 15 years[1]?
|
| Honestly I get it, and I can argue both sides of this
| debate. However, for the regular working person who pays
| taxes year in and year out to hear that people who live
| in stratospheric luxury aren't paying taxes: it looks
| like a duck, walks like a duck, quacks like a duck, and
| by duck I mean rigged system.
|
| [1] https://www.cnn.com/2020/09/27/politics/trump-income-
| taxes-n...
| throwaway34241 wrote:
| It's basically the shareholders that pay this tax - the
| corporate tax being described here only on applies to the
| profits, so salaries for example would be counted as an expense
| and not included in that.
|
| There's also not a lot of reason for this to be passed on to
| the consumer - if raising prices would let the company make
| more profit, it would make sense for them to do that anyway
| regardless of the specific tax rate they pay on those profits.
|
| As for taxing the shareholders directly, they of course do do
| that in addition to the corporate tax. One way the corporate
| tax is a little bit different is that it's paid before income
| is distributed to the shareholders, so if a company accumulates
| a huge cash balance but doesn't do any share buybacks /
| dividends, it will still pay the corporate tax even though the
| shareholders won't pay any tax (unless the company starts
| distributing the profits).
| djrogers wrote:
| Shareholders tend not to wind up holding the bag - higher
| corporate taxes result in higher prices at the consumer
| level.
| svachalek wrote:
| No one ever wants to argue the opposite -- "but if you tax
| consumers, they won't spend as much, and corporations won't
| make as much money!" Although personally if I had to bet on
| one way or the other, I would say this reversal is easier
| to prove.
| eunos wrote:
| > who exactly are we targeting with these taxes? Is it the rich
| executives?
|
| Lot of times the money were not handed to the employee,
| executives included. They just stay at the company or paid to
| the financial company that owned the companies.
| harikb wrote:
| At least from my eyes, recent trends are exact opposite.
| Stock buyback returns the money to investors (by raising
| stock price). Huge bonuses to executives. The company itself
| is managed on a very thin buffer so that
|
| a) When things go south, they can always ask the government
| for bail-out. Too big to fail & all that.
|
| b) Anything affecting the company, in terms of regulations,
| can be shown to directly affect the employees and their job.
|
| This may be a cynical take, but this is what I see.
| ClumsyPilot wrote:
| But investors keep their money in honding companies and
| trusts, sometimes registered in panama. The billions never
| actually have a physical person as their official owner
| bitL wrote:
| How are developing countries going to catch up with developed
| ones if they agree on the same tax policies?
| sbacic wrote:
| They won't and I'd argue that that is part of the plan.
| onlyrealcuzzo wrote:
| China didn't need to have ridiculously attractive taxes to
| catch up.
|
| Corporate taxes in China were ~33% when it was growing the
| fastest.
|
| Just having a low-cost labor force and scale and global
| politics not being anti-offshoring was enough.
|
| As China becomes more expensive, I'm not sure why Indonesia,
| Nigeria, Pakistan, Egypt, and/or Vietnam couldn't do something
| similar.
|
| India seems to be in that process.
|
| Unfortunately, if you're a small, poor country like Western
| Sahara - I don't think tax policies are enough to move the
| needle.
| doomroot wrote:
| China should be the exception in all cases. The don't exactly
| act in a democratic or open way.
| nicoburns wrote:
| Protectionism.
| hartator wrote:
| I rather we all agree to stop printing money.
| timbit42 wrote:
| But then the house of cards would collapse.
| asteroidbelt wrote:
| The comment is correct: printing the money is actually taxing
| the poorest: because government spends money inefficiently, and
| printed money end up in the richest (and worse than that,
| corrupt and counterproductive) people pockets.
|
| Like if you tax a next Bezos, you will have no next Amazon.
|
| But if you stop printing money, you will take money from some
| government contractor, who is a friend of a senator.
| natvert wrote:
| When the benefits of creating a new country outweigh the costs
| (to shareholders), does it fall within the fiduciary duty of
| corporate leaders to form a new country?
| fotta wrote:
| I'm curious if the world-at-large would recognize a corporate
| country though. A country is only a country if other countries
| recognize it as such.
| josefx wrote:
| I wouldn't be surprised if you only needed one country to do
| it and then could funnel all your taxes through that
| complicit country. If that happened we would be back at the
| double Irish with an extra step. Forcing all participants to
| recognize the same countries could have all kinds of good or
| bad side effects especially when you consider China and
| Taiwan.
| gruez wrote:
| I thought part of the plan is that non-complying countries get
| sanctions/tarrifs applied so your plan wouldn't be viable?
| natvert wrote:
| It's not my plan, nor am I advocating for it. I just think
| it's a potential in the logical progression of events.
|
| To your point though, what if a few or even all Fortune n
| companies formed countries (or one country together). Who
| would the sanctions really hurt/benefit? I doubt it would
| hurt the corporate nation states as much as the others.
| newsclues wrote:
| Why would a corporation want a country?
|
| If you don't control the planet you're just waiting for your
| competitors to crush you.
| rio_de_mierda wrote:
| Corporate motives can usually be reduced to one of three
| things: cheap (ideally free/forced) labor, cheap resources,
| and limits on liability.
| newsclues wrote:
| Monopolize markets.
| evilsetg wrote:
| A corporate country. Is that a dictatorship of the
| shareholders?
| svachalek wrote:
| It seems at some point, it's in shareholder interest to run
| wars and black ops against foreign corponations. And then we've
| gone full cyberpunk.
| gorjusborg wrote:
| How many days until I'm a tax-paying citizen of Amazon.com
| Inc.?
| fy20 wrote:
| The many perks of a Prime membership!
| ClumsyPilot wrote:
| Hahaha, and then be saddled with paying for defence
| infrastructure and education?"
| patrickaljord wrote:
| Plenty of tiny nations already solved this problem by
| contracting other nations instead of building their own
| defense infrastructure. Granted it's not free either but much
| cheaper than building your own.
| WalterBright wrote:
| There's no way one can get 130 nations to agree on anything
| without a stick.
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