Facebook Tax Bill Over Ireland Move Could Cost $5B

Post by refurb » Sat, Jul 30, 2016, 5:41 PM UTC

samfisher83 wrote: post #5

maaaats wrote: post #2

How can countries avoid the spiral of death with taxing? I hate how google, facebook etc. makes hundreds of millions in my country, but barely pay taxes. While local companies do.

Companies want to pay no taxes, but they want protection from the legal system infrastructure etc. that allows a company to be successful.

Post by revelation » Sat, Jul 30, 2016, 5:42 PM UTC

ryanhuff wrote: post #10

drcross wrote: post #6

I cannot understand the indignation, the system is working exactly as designed- board members have responsibilities to the shareholders to maximise profits, it would be imprudent if they didn't move to reduce tax burden. The miles of column inches written on this topic is being tediuos. Solutions are simple, anyone telling you otherwise are the same people who hold economists in high regard- 1. Reduce your local tax…

Wouldn't #1 result in a race to the bottom? Why wouldn't a foreign country use tax policy to lower their corp rates towards zero in order to attract foreign tax revenue? After all, some tax is better than no tax.

Post by refurb » Sat, Jul 30, 2016, 5:44 PM UTC

lukateake wrote: post #22

tn13 wrote: post #17

Earlier quoted context omitted.

Why do you think paying taxes is a virtue ? Why does US government need 40% of our hard earned money ? May be American politicians should stop the war on drugs, wars in far off countries and medicare and reduce tax levels to 20%. Facebook, Google, Apple and push the frontiers of human knowledge at rapid rate if they can spend that money themselves. In case of government it will be used to by some junk airforce planes…

Serious question: who pays an effective rate of 40 percent? Many of these huge corporate entities are in the single or negative digits.

Post by billyhoffman » Sat, Jul 30, 2016, 5:45 PM UTC

wyager wrote: post #31

rm999 wrote: post #3

>The IRS claims Facebook’s tax adviser Ernst & Young LLP undervalued the company’s property as it was transferred to Facebook Ireland Holdings Ltd. by evaluating pieces of the online platform separately, according to court filings ... “I don’t think Facebook is necessarily hiding anything, but it’s a fight over pricing,” said Stephen Hamilton, a tax lawyer in Philadelphia. “This is what companies do when they transfe…

I'm not sure why you put value in scare quotes. By avoiding excessive US taxes, Facebook is now a more efficient company. That is how taxes work. The government introduces friction into economic transactions, which sucks up some amount of productivity from those who produce value, which the government can then use for its own ends. By moving to a country with more reasonable taxes, Facebook's economic interactions no…

Post by refurb » Sat, Jul 30, 2016, 5:48 PM UTC

gooserock wrote: post #29

tvanantwerp wrote: post #11

Earlier quoted context omitted.

I don't know of anyone choosing #2, but #1 and #3 are extremely common. The US surprisingly has one of the highest corporate tax rates in the OECD and is one of very very few countries with a worldwide rather than territorial tax system. Those two points taken together are why US tech firms transfer their IP to Ireland in the first place. It's also why so many US companies (at least pre-Brexit) would merge with Europ…

But this whole game is inherently one where some governments will lose. If countries are free to set their own corporate tax rates, you'll get some with high rates and some with lower, and corporations - which can relocate in a way that a state cannot - will just gravitate from the high end to the low end, screwing over those at the high end. That is the problem: we live in a world where business can be global, but o…