Facebook paid £4,327 corporation tax in the UK in 2014 • Hacker News Board

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#251

Post by joesmo » Mon, Oct 12, 2015, 2:16 PM UTC

What's the point of having a company like FB or Starbucks in your country if they're an incredible net loss to the economy? Why not stop attracting these kinds of businesses or even actively seek to kick them out? I mean, assuming that fixing the tax laws for corporations is impossible, which I think at this point is a fair assumption.

With numbers like this, it'd be easy to morally justify looting, and other otherwise criminal activities against both these types of corporations and the government that allows them existence. It'd seem to start tearing down at the social fabric in many countries, not just the UK, where the poor are actually taxed more than these corporations. With just a little more poverty and misery, I wouldn't be surprised if at some point we started seeing violence and social upheaval as people realize they have no other recourse.

And who could blame people if they reacted this way?

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#252

Post by tomelders » Mon, Oct 12, 2015, 2:17 PM UTC

refurb wrote: post #166

tomelders wrote: post #153

Earlier quoted context omitted.

Great summary, I'd like to add > while not dis-incentivising multi-nationals from doing business in each country I'd argue that the incentive to do business in several countries is the profit they're making in those countries. No company is going to walk away from a company because they're being charge x% of tax on the money they earn. They might say they will, but they may as well be saying this... "Because I don't…

Return on investment weighs heavily on most business decisions. If I invest $X, by the end of the year I'll get $X*(1+return%). Since companies can't invest everywhere at the same time, they prioritize investments. A higher tax rate might mean investing in that country later, as there are other investments than have a higher immediate return. I could see a situation where an investment was profitable, but so marginal…

The reality is - The UK has a relatively low corporation tax rate. In the UK they would still getting plenty of return on their investment if they paid corporation tax on the profits generated in the UK.

These academic arguments about tax don't hold much sway with me. 18% is a perfectly reasonable rate of corporation tax. Paying that tax ensures the long term viability of the British economy from which Facebook will earn even more profits. Not paying it is just leaching the nutrients out of the environment. It's a scorched earth policy and HMRC should be merciless in their punishment of it. And I use the word punishment intentionally.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#253

Post by afarrell » Mon, Oct 12, 2015, 2:17 PM UTC

krotton wrote: post #70

jkahn wrote: post #12

Global companies offshoring profits and not paying enough tax (in the eyes of many countries) was a hot topic at the last G20 summit in Brisbane. This isn't limited to Facebook, as the article explains. The issue and background here is that when large companies operate globally, each country has its own local subsidiary, owned by the global entity. Money is made in each country by selling goods or services. How are t…

Well, in hypothetical laissez-faire capitalism taxes would not be needed to provide infrastructure - Uber would just have to pay its fees for driving on private roads (etc.). This would drive prices up, but fairly divide the costs between the roads' users. Although I must admit I have no idea how things could look with purely digital companies like Facebook. I can think of local ISP-s charging the company for allowin…

But you still need taxes to pay for courts, police, armies, etc.

Unless you are arguing the An-Cap thesis that these functions can be conducted by private entities. If you are, then congratulations: we're already living under your preferred system! It is just that for most territory, one company has seized monopolistic control of the territory, has called itself "the government", and no other companies have been formed to challenge it. Exceptions such as the West Bank where two companies are competing do exist.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#254

Post by mlrtime » Mon, Oct 12, 2015, 2:18 PM UTC

jkahn wrote: post #45

smt88 wrote: post #34

Earlier quoted context omitted.

> provide the same level (or greater) services I don't agree with that in all cases, and I particularly don't agree related to Uber. When I lived in NYC, I often called "311" to complain about taxi-driver misconduct. This was the only outlet, and you really only did it because you wanted to feel better. There were never any direct consequences that you knew of. If you consider the decreased cost of operating the 311…

That's not what I mean. I'm talking about what the tax money collected gets spent on by government - roads, healthcare, infrastructure, aged pensions. If industry X was paying $100mm tax, and industry Y disrupts and replaces that, while paying only $20mm tax, the government needs to find $80 million to replace that tax shortfall. Nothing to do with taxi related services...

The government only needs to find $80mm if the disrupted industry consumes the same resources. If somehow the disrupted industry does not (efficiency, other tax base), government does not need the revenue. It is incomprehensible to some people that government should let go of funding.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#255

Post by throwaway2048 » Mon, Oct 12, 2015, 2:18 PM UTC

geodel wrote: post #235

coldtea wrote: post #201

Earlier quoted context omitted.

No, they use every trick in the book not to, ending up paying less than your local frozen yogurt place (exaggerating a little, but still).

So the problem is existence of the book of tricks. Apple did not write it.

except apple (and companies like it) very much do "write the book" via lobbying.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#256

Post by cardinalfang » Mon, Oct 12, 2015, 2:19 PM UTC

tcfunk wrote: post #232

> The average UK salary is £26,500 on which employees pay a total of £5,392.80 in income tax and national insurance contributions. Whoa, what? That's some hefty tax for the 26k bracket!

Half of that is national insurance which is concentrated on £8k - £35k band, counteracting the progressive income tax bands.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#257

Post by kriro » Mon, Oct 12, 2015, 2:21 PM UTC

I'd kind of like to spend a day with the people who think up these schemes and pick their brains (lawyers, accountants, CFOs, whoever works on this). Not because I want to "optimize taxes" but because I'm genuinely curious about how they tick, if they see it as a game of sorts etc.

You have a complicated legal framework and try to optimize in it. At the end of the day I'd still wonder...gee is it "ok" that we pay only that much but like I said I'd like to see how this general problem is approached.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#258

Post by saiya-jin » Mon, Oct 12, 2015, 2:21 PM UTC

caskance wrote: post #216

kmkemp wrote: post #202

Earlier quoted context omitted.

Except that the reason the loopholes exist is because of the lobbying of companies that take advantage of them.

The fact that companies are able to create loopholes via lobbying is the problem. When you accept corrupt government as an unchangeable fact of nature, you've already conceded defeat.

or... you might become a realist, and maybe try to come up with solutions applicable in real world, on real people and real situations.

I'm not claiming I know what the solutions are. But I am damn sure theoretical solutions for theoretical situations tend to fail spectacularly in reality, no matter what topic they are about.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#259

Post by laichzeit0 » Mon, Oct 12, 2015, 2:21 PM UTC

Trump's solution? Cut the U.S. corporate tax rate to 15% from the current top rate of 35%. This would make corporate inversion unnecessary. I think he also had the idea of capping tax at 10% for companies wanting to bring their money back.

At some point you have to ask yourself "why are companies doing this?" and fix the root cause.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#260

Post by caskance » Mon, Oct 12, 2015, 2:24 PM UTC

tobltobs wrote: post #249

caskance wrote: post #218

Earlier quoted context omitted.

You're not "supposed" to do anything. If you want to raise tax, raise tax. Just keep in mind that this changes incentives for anyone who has to pay that tax. That's not a threat, it's a fact.

I do not want to raise taxes. I just want that everybody pays his taxes, because than we could lower taxes.

I haven't seen anyone claim that Facebook is failing to pay all the tax they are legally obligated to pay. Did you mean something else by "everybody pays his taxes?"