[HN Gopher] 136 Countries agree to minimum corporate tax rate
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136 Countries agree to minimum corporate tax rate
Author : nathanyz
Score : 92 points
Date : 2021-10-08 17:11 UTC (5 hours ago)
(HTM) web link (www.cnn.com)
(TXT) w3m dump (www.cnn.com)
| fallingfrog wrote:
| On one level, this is a good thing as there has been a race to
| the bottom going on in terms of taxes for some time.
|
| But on another level, this is very bad because national tax
| policy is now being set by unelected diplomats instead of
| congress. It's an ominous admission that western democracy is now
| unable to operate as it's meant to and set policy in a way that
| reflects the desires and interests of the citizens.
|
| I know that worrying about national sovereignty is usually a
| right wing thing, but there is some truth to it- when the economy
| is international the bodies with the most power are the
| international economic agencies and banks. For example it's well
| known that Greek government policy after the financial crisis was
| dictated to them by the European Central Bank and the IMF.
| Likewise the World Bank and the IMF set policy for a large swath
| of the global south. And none of those people are elected.
| lovich wrote:
| > It's an ominous admission that western democracy is now
| unable to operate as it's meant to and set policy in a way that
| reflects the desires and interests of the citizens.
|
| That comes off as a little hyperbolic to me. Those governments
| are supposedly already taking choices they feel reflect the
| desires and interests of their citizens which means entering
| into this tax agreement is such a reflection.
|
| There's no world government enforcing that states remain a
| member of this agreement so they can always leave them later if
| their citizens feel that way as well.
|
| It's not like this was done entirely out of altruism from
| states looking out for their fellow man. Nation states are
| pretty nakedly self interested hence the phrase "nations have
| no friends only interests". They all must feel they are getting
| something from the deal
| nescioquid wrote:
| > tax policy is now being set by unelected diplomats instead of
| congress.
|
| Each nation will have to ratify the agreement.
|
| It is nominally true that congress sets tax policy, though that
| overlooks the golden horde of lobbyists that descend upon
| Congress with ready-made bills. It is also true that a
| representative or senator ought to make decisions based on the
| best interests of their constituents, rather than donors and
| their lobbyist pals (who might land them a lucrative gig after
| office).
| tweedledee wrote:
| It could be worse; they could have taken over via conquest
| (war).
| lovich wrote:
| Did something happen to cause mutual cooperation between most of
| the planet to be viewed as a bad thing? All these countries have
| come to an agreement by negotiation instead of economic or
| martial war.
|
| Why is there such pessimism/paranoia about this deal in this
| thread?
| TechBro8615 wrote:
| Personally, I'm a strong believer that decentralized systems
| are more robust than any centralized or distributed
| alternative. I see no reason why geopolitics would differ from
| software in this case. In fact, the most effective use case for
| decentralized software occurs when centralized (geo)political
| governance creates friction or reduces optionality. For
| examples, see Napster, Bitcoin, Tor, etc. - their
| decentralization provides robustness against failure modes
| created by centralized governance and regulatory capture.
|
| So if the principles of software and politics are already so
| closely aligned, isn't it reasonable to assume that 136
| independent governing bodies would be more robust than one?
| huwnang wrote:
| HN is dominated by temporarily embarrassed billionaires.
|
| At least in the sense of loud writers and not quiet readers.
| brodouevencode wrote:
| Operating under the assumption that most replies are from US
| citizens: the people of the US have a love/hate relationship
| with taxes. Most of the time theyre fine with taxing others so
| that they could reap the benefits, they just dont want to be
| taxed themselves.
| sushid wrote:
| Isn't that like... everyone?
| lovich wrote:
| I like to think I don't make every decision with a
| sociopathic level of self interest. I hope at least some
| others do too
| I_am_tiberius wrote:
| Corporate tax in general is the wrong type of taxation.
|
| Corporate tax can be controlled by the company itself. If you
| run your business economically, you pay more corporate tax.
| This is just wrong.
| tertius wrote:
| Yes, but increased profits (by running profitably) also
| increases returns for the shareholders... A good thing.
| I_am_tiberius wrote:
| My point is that it's a bad tax because it can be
| controlled and at the same time corporate tax controls the
| business decisions. This should not be the case in my
| opinion. Think about it. I think it would be better to
| focus on sales tax. Also, it would make tax rules much
| easier to understand.
| dantheman wrote:
| But you don't increase profits, what you do is spend that
| money recklessly on R&D that has a lower ROI than if that
| money was spent outside the company. However, once taxes
| are factored in the ROI is better than paying taxes due to
| an increase in the share price.
|
| So what you incentivize is the misallocation of funds from
| their most beneficial use outside the organization to
| something in the organization.
| brodouevencode wrote:
| You, the consumer, pay the corporate tax.
| throwaway34241 wrote:
| When people talk about the "corporate tax", they're talking
| about the tax on corporate profits, which belong to the
| shareholders. You could theoretically tax the shareholders
| directly instead when they receive those profits as
| dividends etc (and there might be some advantage to doing
| so - it's more clear which country taxes should be paid in,
| and you can have a lower dividend tax rate for people with
| low incomes).
|
| There's no reason for a company to raise consumer prices in
| response to a change in the corporate tax rate - if a
| company can make more profits just by raising prices, they
| should do so anyway regardless of what the tax rate is.
| negativez wrote:
| That's true - but taxes *always* disincentivize the thing
| being taxed. If investment in a company is less
| profitable under taxation than it otherwise would be,
| there will be less investment in that company, no
| exceptions. Now the _size_ of that effect is quite likely
| to be negligible for the companies in question here. But
| it 's at least theoretically possible that taxing
| corporate profits could lead to a change in the
| marketplace, including market dropout, that might
| actually lead to consumers paying higher prices to the
| remaining members of a market with reduced competition.
|
| Further, if all companies in an already low-competition
| marketplace are equally affected by the tax, then it's
| quite possible for all of them to ~simultaneously raise
| prices to offset the tax, with or without explicitly
| illegal coordination, knowing that the others will follow
| suit.
| tertius wrote:
| Nope, the tax is paid on the profit (i.e. post consumer).
| burnafter182 wrote:
| Globalism is inherently fragile. This is part of a continued
| trend which has enough inertia to carry us to an inflection
| point where it could conceivably destroy everything human,
| either in real terms or something less tractable. We made a
| wrong turn a very long time ago, and since we've been
| extraordinarily misdirected but inextricably committed to the
| mistake we've made. We're totally in the dark, and truth
| becomes ever more indefinite as we travel down this timeline
| and the path _we_ [never] elected.
|
| You see, the way that we made exchange was translated from a
| moral domain to a material domain, which was finally transposed
| to a symbolic one. Dollar valuations of a lifetimes is an
| intrinsically abhorrent concept. A life can never be repaid,
| thus it can never be valued in real terms - yet it is, billions
| of times over. Globalism is just a long-range result of this.
| Exploitation and undervaluing of billions of lives in order to
| create increasingly competitive products to grow dollar values
| of a investments in the hands of an increasingly small
| proportion of the population. This itself founded on false
| pretense.
|
| Every move towards globalism is increasingly dangerous, this is
| no exception.
| bloodyplonker22 wrote:
| What you just wrote is a lot of verbal diarrhea without any
| examples or backing at all.
| feoren wrote:
| This is a lot of doomsaying, with no evidence and very little
| details or logic. It's like you expect your reader to already
| agree with you and nod along to "mistake" and "misdirected"
| and all the other negative language you use without any
| explanation of what you're actually talking about.
|
| > We made a wrong turn a very long time ago
|
| What, inventing agriculture? Certainly some think that.
| Otherwise: what are you talking about?
|
| > translated from a moral domain to a material domain, which
| was finally transposed to a symbolic one.
|
| _What?_ Can you explain what this is supposed to mean?
| gxt wrote:
| I don't understand the comment you replied to either. To my
| naive mind it sounds like a lot of words put together to
| make it look like something deep, but that doesn't actually
| mean something. It'd be happy to be showed wrong here with
| historical events to describe "the wrong" turns and such to
| be able to tell if it's not just a abstraction or feelings
| that went a bit to far.
|
| Could it be a lot of words to describe an interpretation of
| globalization as a perceived single point of failure across
| every subsection of civilization/humanity?
| joconde wrote:
| >> We made a wrong turn a very long time ago
|
| > What, inventing agriculture? Certainly some think that.
|
| Are there really people who believe that? I've only read it
| in Sapiens by YN Harari, and it sounded like a ridiculous
| idea written to provoke thought, not an actual opinion.
| "Yes, hunter-gatherers could starve on a bad year, and they
| _sometimes_ got eaten by tigers, but look at how un-
| alienated they were! "
|
| The author probably wouldn't have been to write his book or
| share these thoughts to more than 30 people without the
| invention of agriculture...
| throwaway34241 wrote:
| > I've only read it in Sapiens by YN Harari, and it
| sounded like a ridiculous idea written to provoke
| thought, not an actual opinion. "Yes, hunter-gatherers
| could starve on a bad year, and they sometimes got eaten
| by tigers, but look at how un-alienated they were!"
|
| The argument I saw put more emphasis on things like
| nutritional deficiencies after the switch [1], reflected
| in average male height going from 5'9" to 5'3". Obviously
| in the long run agriculture became very efficient, but he
| makes a reasonable case that in the short run individual
| quality of life went downhill, with the main advantage
| being reaching higher population densities before being
| at the limit of the food supply, and so winning any
| conflicts with hunter-gatherer societies.
|
| [1] http://www.ditext.com/diamond/mistake.html
| dragonwriter wrote:
| The idea, at least as I've seen it a number of places,
| wasn't that agriculture was a _long-run_ bad idea, but
| that for a very long time it decreased the median quality
| of life (while also greatly reducing volatility in the
| quality of life for most people, and enabling
| _extraordinary_ improvements in the quality of life for -
| again, for a very long time - an extremely narrow elite.)
| CommieBobDole wrote:
| I am as confused as you are; this reads almost like GPT-3
| generated text - there are words that resolve to sentences,
| it scans like real human writing, but there's little to no
| information communicated.
|
| The breakdown is basically:
|
| * A statement of the premise: "Globalism is bad" without
| defining 'globalism'.
|
| * Some vague ominous sentences that sound like they
| reinforce the premise but don't.
|
| * A long paragraph that basically makes the statement
| "Human lives can't be assigned a dollar value" with no real
| attempt to tie it to the premise.
|
| * Restatement of the premise.
| lovich wrote:
| > Globalism is inherently fragile > Every move towards
| globalism is increasingly dangerous, this is no exception.
|
| I don't really agree in the slightest unless you're making
| the claim that all political systems above the family level
| are inherently fragile in which case it's a moot point. The
| previous international standard was war when there were major
| disagreements. Globalism has helped make the entire planet
| relatively(relative is doing a lot of heavy lifting here but
| still counts) peaceful compared to the past
| fulafel wrote:
| Sounds good, a tax race to the bottom hurts many more counries
| than it helps, it's a negative sum game.
|
| What's the previous % been so far in major western counries,
| anyone got a link?
| sharkjacobs wrote:
| US: 21%
|
| China: 15%/25%
|
| Japan: 29.74%
|
| Germany: 29.65%
|
| UK: 19%
|
| France: 26.5%
|
| India: 15%/22%
|
| Italy: 27.9%
|
| Countries with two values listed have different rates for
| different types of companies e.g. China has a lower rate for
| "high-tech" companies
|
| https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
| glogla wrote:
| That makes this sound more like a corporate win - 15 % is
| already the lowest one, and this agreement can be used as a
| way to wiggle out from something more useful, like revenue
| tax or VAT.
| ArnoVW wrote:
| These countries were not the problem cases. If you compare
| it with Ireland however :
|
| https://en.m.wikipedia.org/wiki/Corporation_tax_in_the_Repu
| b...
|
| "Ireland's "headline" corporation tax rate is 12.5%,
| however, foreign multinationals pay an aggregate SS
| Effective tax rate (ETR) of 2.2-4.5% on global profits
| "shifted" to Ireland, via Ireland's global network of
| bilateral tax treaties."
| zw123456 wrote:
| Step 1) global harmonization of trade
|
| Step 2) common monetary system
|
| Step 3) global harmonization of tax structure
|
| Step 3) one global government (similar to EU)
|
| Is that a good thing or a bad thing ?
|
| Yes.
| ed_elliott_asc wrote:
| as long as Americans don't go mad and get another crazy elected
| Ekaros wrote:
| I think that is kinda forgone now... How many of them do they
| now have in row? Going back to at least Clinton, maybe
| further...
| tomohawk wrote:
| there's what's written, and then there's what's done.
| dantheman wrote:
| I think this type of harmonization is incredibly harmful and
| reduces experimentation among states. I personally think the
| concept of corporate taxes doesn't make sense and encourages
| reckless behavior - there are a lot of unintended consequences do
| this.
|
| We should be encouraging experimentation in governance.
|
| It's the same how inflation doesn't just devalue the currency, it
| encourages riskier behavior because investors must seek higher
| returns.
| thaumasiotes wrote:
| https://www.overcomingbias.com/2020/09/the-world-forager-eli...
| RNCTX wrote:
| I think you're in need of some further reading.
|
| 1) UN resolutions don't have any enforcement weight, which is
| why they're so popular with politicians who run on the
| statement "nothing will fundamentally change."
|
| 2) Taxes should be paid by whoever retains earnings, and in
| that case corporate taxes make a lot of sense. And yes, buying
| back your own shares to drive share values higher for current
| shareholders is "retaining earnings" and should be taxed at not
| just capital gains, but individual income levels since
| individual income is what such activity creates.
| tertius wrote:
| On #2: Buying back shares does not create individual income.
| It only creates temporary unrealized gains. Only if those
| individual shareholders sell, do they realize the gains and,
| in some cases, will they be taxed on it at income tax rates.
| vegetablepotpie wrote:
| Without collective agreements between governing bodies on what
| bare minimum standards should be on taxation what we see is
| rent seeking behavior from corporations (ah la Foxconn and
| Mount Pleasant, Amazon HQ 2).
|
| Without minimum taxation, we see a race to the bottom for
| taxation, where elites benefit and everyone else looses.
| dcgudeman wrote:
| By "elites" do you mean the people living in the countries or
| states that attract capital? Ireland's standard of living has
| increased dramatically because they adopted low taxation
| regime. It's ridiculous to pretend that forcing countries
| that don't have much in the way of resources or
| infrastructure to adopt higher taxes somehow helps them. This
| might help the U.S. or Germany keep companies "in house" but
| it certainly does not help Ireland or similar countries.
| aspenmayer wrote:
| This argument is subtly interesting, as it lays bare how
| regulatory capture of the tax system by corporations has
| caused unexpected consequences and externalities, and how
| efforts seeking to even the playing field for smaller
| corporations and countries ironically benefits those best
| able to navigate increased regulatory hurdles and scrutiny
| and higher tax burdens - the status quo elite corporations.
|
| I'm reminded of the (conspiracy?) theory that the recent
| Facebook whistleblower is a controlled opposition operative
| who deliberately seeks to increase the regularly burden on
| Facebook and other social media sites, because Facebook
| will benefit overall compared to smaller corporations who
| are not able to iterate and adapt as well.
|
| Is this new tax plan comparable to regulatory capture by
| large multinational corporations? If so, how does it deal
| with these concerns?
| booleanbetrayal wrote:
| This _is_ experimentation in governance. What better way to
| encourage that than to provide an illustration as these 136
| countries are doing?
| Glyptodon wrote:
| The thing is non-harmonization doesn't really promote
| experimentation, it promotes competitive-market-leading
| behavior. Obviously there are limits to how much it matters -
| lots more startups in CA compared to South Dakota. But I don't
| think there's a lot of evidence that non-harmonization provides
| an incentive to experiment, so much as it makes countries have
| economic incentives to treat things like a zero sum game.
| lowbloodsugar wrote:
| Sure. Let's try an experiment where all countries agree to a
| minimum tax rate, and see what that does.
|
| We've tried race-to-the-bottom. We've tried penalize-till-we-
| get-hitler. We've tried tickle-down. We've tried fascism-
| masquerading-as-communism. Let's try globally coordinated
| minimum tax!
| telotortium wrote:
| I think the tech companies will keep their headquarters in
| Ireland even after this - Ireland is still not going to raise
| it's corporate tax rate above 15%, there's inertia, and Ireland
| is now the only native English-speaking country in the EU (except
| maybe for Malta).
| asdff wrote:
| Is the language barrier really an issue when you have nations
| like Germany where half the population speaks english? When you
| consider knowledge worker germans I wouldn't be surprised if
| this jumps up to U.S. proportions where 78% of the population
| speaks english.
| crishoj wrote:
| The greater impact of the agreement as I understand it will
| come from the requirement for companies to pay taxes in the
| countries where they do business, and not just in the country
| of registration.
| ensignavenger wrote:
| Whenever some one visits Hacker News, where is Ycombinator
| "doing business" from? The country where the visitor is
| located? The country where the Hacker News
| moderators/programmers are located? The country where
| Ycombinator is headquartered? The location of the Hacker News
| servers? The location of the advertisers on HackerNews? If
| each country makes up their own tax rules to determine where
| Ycombinator is doing business, then a company may have to pay
| 200% of their total revenue in taxes to cover all the
| different locations that could claim business was being
| conducted there.
| tweedledee wrote:
| I think there is a single entity that determines
| allocation. Details TBD. It's a one liner in the following
| doc;
|
| https://www.oecd.org/tax/beps/statement-on-a-two-pillar-
| solu...
| ensignavenger wrote:
| I just now read that... a lot of details to be worked
| out, and lot of opportunity for this to fail long before
| implementation.
| tweedledee wrote:
| It's a back door federalization. Members will have to
| conform to additional TBD rules or put their tax
| allocation at risk.
| aspenmayer wrote:
| I would be surprised if double taxation was not addressed
| or considered.
| entropyneur wrote:
| Sounds like a cartel.
| ceejayoz wrote:
| Cartels are entirely legal on the international stage. See OPEC
| as a clear example.
| [deleted]
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