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Panama Papers: Mossack Fonseca leak reveals elite's tax havens

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Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#361

Post by vidarh »

StreamBright wrote: post #350
vidarh wrote: post #331

Earlier quoted context omitted.

VAT is crazily regressive because those who make the least spend far larger proportions of their income buying stuff for it. Most countries with VAT end up with complicated rules for exemptions for basic goods as a result, to try to balance it better.

It is not complicated to me: - food, books, medicine, ... -> lower VAT - cars, luxury items -> higher VAT

Now, define "luxury items", while considering e.g. that in the UK there's VAT on things like tampons (though at the reduced 5% rate), while e.g. imported luxury meat is zero-rated because its food.

It's an incredibly complicated tax to apply, because the rules tend to grow to deal with more and more corner cases.

For example: Are jaffa cakes cakes or biscuits? It took a lengthy court case to determine that they are in fact cakes for the purpose of UK VAT [1] [2].

The reason for this case was that cakes are exempt from VAT as food no matter what, while biscuits are zero-rated in the UK only if they are not covered in chocolate. In the latter case they are considered confectionery, which is standard rated. Here's more on the complexities of this classification [3].

[1] https://en.wikipedia.org/wiki/Jaffa_Cakes#Categorisation_as_...

[2] http://www.hmrc.gov.uk/manuals/vfoodmanual/VFOOD6260.htm

[3] http://www.hmrc.gov.uk/manuals/vfoodmanual/VFOOD6200.htm

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#362

Post by StreamBright »

oneeyedpigeon wrote: post #354
StreamBright wrote: post #352

Earlier quoted context omitted.

Depending on your definition of income tax you check 2 numbers: - the lower number that you as a person pay (strictly the personal income tax) - the higher number, combining what the company pays + what you pay after your income. I am a contractor so I get a breakdown how much was spent on taxes and if get 100 EUR from a company the tax deduction is 65 EUR. (Obviously, the % depends on your actual income). Combine th…

Thanks for the explanation. Are you taking into account the lower rates, though? For example, where I am, there's a personal allowance meaning one can earn £10,000 and not pay a single penny in income tax. The basic rate (which ends at a value substantially above the average salary) is only 20%. I'm guessing you're not in the UK, so it's going to be harder for me to compare situations. I don't think it's fair to comb…

You can go to different countries for having lower tax rates, in my experience it is never going to be less than 35 - 50% for the amount of money I make.

I am not sure how is it not fair to combine VAT + income tax to understand how much you are actually paying to the government. Goods I "choose" to buy includes: food and clothing, I am not sure how much it is a choice or just a necessity. Buying a flashy car is a choice, buying bread or a medicine is not so much.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#363

Post by irixusr »

deepnet wrote: post #336
StreamBright wrote: post #310

Earlier quoted context omitted.

The only "fair" tax type is VAT for humans. Buying a SUV -> You pay 10,000 USD in taxes. Buying bread -> You pay 0.01 USD in taxes. We could get rid off income tax at all and just increase the VAT to ~20 - 50% depending on the type of the product. This way it is almost impossible to cheat. Solving taxation for corporations still an issue though.

Inflation is a fair tax, it taxes money.

Actually it's a tax to being far from the central bank. The further you are the longer the price signal from the printed money will take to reach you.

Inflation is cancer.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#364

Post by oneeyedpigeon »

StreamBright wrote: post #362
oneeyedpigeon wrote: post #354

Earlier quoted context omitted.

Thanks for the explanation. Are you taking into account the lower rates, though? For example, where I am, there's a personal allowance meaning one can earn £10,000 and not pay a single penny in income tax. The basic rate (which ends at a value substantially above the average salary) is only 20%. I'm guessing you're not in the UK, so it's going to be harder for me to compare situations. I don't think it's fair to comb…

You can go to different countries for having lower tax rates, in my experience it is never going to be less than 35 - 50% for the amount of money I make. I am not sure how is it not fair to combine VAT + income tax to understand how much you are actually paying to the government. Goods I "choose" to buy includes: food and clothing, I am not sure how much it is a choice or just a necessity. Buying a flashy car is a ch…

That's why I added the "(mostly)"; where I live, most food is exempt from VAT, which is as it should be. I agree that clothing is a necessity, so should also be exempt, but only up to a reasonable limit - and then things get a bit too complicated.

VAT is definitely a problematic tax because it tends to hit the poorer harder, but that doesn't affect the fact that it would be possible to pay almost none of your income as VAT, or you could pay millions in VAT; it's very different from actual income tax.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#365

Post by StreamBright »

vidarh wrote: post #361
StreamBright wrote: post #350

Earlier quoted context omitted.

It is not complicated to me: - food, books, medicine, ... -> lower VAT - cars, luxury items -> higher VAT

Now, define "luxury items", while considering e.g. that in the UK there's VAT on things like tampons (though at the reduced 5% rate), while e.g. imported luxury meat is zero-rated because its food. It's an incredibly complicated tax to apply, because the rules tend to grow to deal with more and more corner cases. For example: Are jaffa cakes cakes or biscuits? It took a lengthy court case to determine that they are i…

I agree with you, when it comes to applying law to real life it is usually lengthy and pricey process. We should just use a better legal system where these things are not up in the air. You can complicate life with broken legislation, just to keep lawyers busy. You could also just ask: do we need a lawyer to determine that jaffa cakes are cakes or biscuits, or we can pick one and go with it.

On the other note on VAT categories: how about collecting data and letting machine learning decide what is a luxury item? We have excellent clustering algorithms that can find clusters in data human has no chance to find. Lets apply that to purchasing habits and figure out what sort of clusters we have out there, and lets decide how much VAT you pay based on that.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#366

Post by qznc »

mcphage wrote: post #267
IkmoIkmo wrote: post #181

Earlier quoted context omitted.

I'd replace wrongdoing with illegal. If you ask me, if you're a billionaire and you're not willing to pay taxes and spend 0.0001% of your wealth on the expertise to reduce your tax bill by 99%, in legal ways that 99.99% of the rest of the population doesn't engage in, then by all means that's wrongdoing to me and I think most would be with me on that. Of course it's not necessarily illegal.

> in legal ways that 99.99% of the rest of the population doesn't engage in This finally sounds like an industry that's ripe for disruption—Tax Loopholes For Everyone!

You will like this story ;)

http://www.independent.co.uk/news/uk/crickhowell-welsh-town-...

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#367

Post by qznc »

StreamBright wrote: post #350
vidarh wrote: post #331

Earlier quoted context omitted.

VAT is crazily regressive because those who make the least spend far larger proportions of their income buying stuff for it. Most countries with VAT end up with complicated rules for exemptions for basic goods as a result, to try to balance it better.

It is not complicated to me: - food, books, medicine, ... -> lower VAT - cars, luxury items -> higher VAT

Another advantage is that most people don't have to file taxes anymore. VAT is handled by companies.

Personally, I think we should also tax land owners. Likewise, this does not affect most people.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#368

Post by klunger »

tdaltonc wrote: post #307
xbryanx wrote: post #15

Planet Money did a pretty enjoyable show about setting up shell companies, that might provide some interesting context for this news: http://www.npr.org/sections/money/2012/07/27/157499893/episo... and http://www.npr.org/sections/money/2016/03/30/472452808/episo...

I wonder if they knew this was coming.

Well, they could not have known in 2012. But, they did just re-air those episodes in the last few weeks as re-runs. So, that was either a big coincidence, or they knew it was coming.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#369

Post by etherael »

oneeyedpigeon wrote: post #353
vsl wrote: post #347

Earlier quoted context omitted.

He isn’t “conflating”, he clearly said this is the total paid to the government — i.e. all sorts of taxes. That you like the sound of it is, frankly, horrible.

It's horrible that I like the sound of a high-ish top rate of income tax? We haven't even stated the terms of what income level that tax rate is applied at, so your finding it horrible is either a total misunderstanding, or you object to the progressive nature of variable income tax outright. I hope it's the former, because I find the latter truly objectionable.

I find the idea of people dressing up simple theft as something other than it is, and in the ill-fitting trappings of a global social good, despite the fact that the institutions being financed by this form of theft were the largest non natural cause of death in the preceding century truly objectionable, too.

Letalone moving onto a particularly egregious sort of theft involved in modern taxation rackets where the burden approaches three quarters of the total earnings of any given individual. If you're cool with this how about I extort you for 75% of your income and then use it to finance a private mercenary company that runs around the globe destroying lives and property for ill-defined "geopolitical objectives"?

But I guess "I find x truly objectionable" is somewhat of a content free statement, unless we're just trying to farm moral outrage from our respective in-groups.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#370

Post by miralabs »

there was a very informative episode on Planet Money with regards to setting up shell companies. A lot of info here with regards to how names are hidden etc...it is worth a listen. The hosts setup their own shell companies:

http://www.npr.org/sections/money/2016/03/30/472452808/episo...

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