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Paradise Papers: Dear Tim Cook

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Re: Paradise Papers: Dear Tim Cook

#601

Post by qznc »

ben_w wrote: post #551
qznc wrote: post #526

Earlier quoted context omitted.

My (ultra-simplistic) idea would to only tax land and VAT. Abolish all other taxes. Unfortunately, governments like fine-grained taxes because it gives them the illusion of control.

That’ll work great if every nation simultaneously agrees to it, but is potentially catastrophic if they don’t: all the tax-dodgers move to your country for tax purposes while continuing to make and sell everything else exactly as before. And if every nation agreed to have identical tax laws, we wouldn’t have a problem with lawful multinational tax minimisation in the first place, because there would be no advantage t…

Sounds good. It forces all countries to unify VAT.

It begs the question why it does not happen already?

Re: Paradise Papers: Dear Tim Cook

#602

Post by ravitation »

qznc wrote: post #526
simonh wrote: post #519

Earlier quoted context omitted.

>The fix can certainly involve appealing to morals and human responsibility... Are you really suggesting the management and board of every major company in the world should meet to decide how much tax they should choose to pay each year? Even if they did, where should they choose to pay it? Should Apple Pay more tax in China where the phones are assembled? In America where they are designed? In the countries where th…

My (ultra-simplistic) idea would to only tax land and VAT. Abolish all other taxes. Unfortunately, governments like fine-grained taxes because it gives them the illusion of control.

That would be a horrendously regressive taxation system.

"Fine-grain taxes" are what let a government tax people equivalently to their ability to pay. Income tax being one of the easiest ways to do that...

Re: Paradise Papers: Dear Tim Cook

#603

Post by ravitation »

0xffff2 wrote: post #584
qznc wrote: post #526

Earlier quoted context omitted.

My (ultra-simplistic) idea would to only tax land and VAT. Abolish all other taxes. Unfortunately, governments like fine-grained taxes because it gives them the illusion of control.

I'm American, and thus not terribly familiar with the details of VAT. Is there anything about how it works that makes it less regressive than a simple sales tax? Sales tax as it exists in most US states is just about the most regressive tax scheme imaginable.

VAT is also a regressive. It's comparable to sales tax.

Re: Paradise Papers: Dear Tim Cook

#604

Post by unabst »

styx31 wrote: post #80

What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate. But there are these big companies which can afford to create offshore companies/holding just to evade some tax system, and lower their tax rate. So, what? The tax rate of a country is now "artificial", because it will never be applied to all revenues from all companies, because th…

These companies will follow the law. When Ireland changed theirs, Apple moved.

This problem can be fixed with laws. What's difficult is changing those laws, because the rich pay off those that write them.

Think sales tax. Apple can't avoid sales tax. But they don't care, because it's not them being taxed.

But then again, Amazon did avoid sales tax, and used the internet loophole to compete with local smaller businesses using their "no sales tax" discount. And they kept pushing for special treatment in ways no small businesses could. Now the laws have been adjusted, and they collect sales tax.

If profit had to be taxed within the country or even district of sale, it's over.

There is no "if laws are changed we will be screwed" mechanism. The laws are designed to screw and unscrew. Attention should be directed to those writing them, because they know exactly what they're doing, because they are succeeding.

Re: Paradise Papers: Dear Tim Cook

#605

Post by gonehome »

tyingq wrote: post #240
loceng wrote: post #188

Earlier quoted context omitted.

These companies evading taxes are responsible for increased hardship and suffering of a society as well, leeching off of the nations they exist in, and being able to outcompete the honest organizations and people in them. The damages are far greater than the tax avoided. "They are doing it too" isn't a valid excuse either.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

I think this issue is hard to fix without a United Human Government. This is an incentive and coordination problem and global companies take advantage of it.

To really fix you'd have to have all countries coordinate on tax law which makes this a really hard problem to solve in our current world especially when a lot of companies with a lot of money are able to push for legislation that's in their best short-term interest, but not necessarily the best interest of the group.

Outside of that you get what we have currently which is a stable equilibrium of governments trying to write laws to create the incentives they want and companies hiring armies of accountants to avoid paying taxes (as well as pushing for legislation changes that benefit themselves).

http://slatestarcodex.com/2014/07/30/meditations-on-moloch/

Re: Paradise Papers: Dear Tim Cook

#606

Post by hota_mazi »

loceng wrote: post #188
styx31 wrote: post #80

What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate. But there are these big companies which can afford to create offshore companies/holding just to evade some tax system, and lower their tax rate. So, what? The tax rate of a country is now "artificial", because it will never be applied to all revenues from all companies, because th…

These companies evading taxes are responsible for increased hardship and suffering of a society as well, leeching off of the nations they exist in, and being able to outcompete the honest organizations and people in them. The damages are far greater than the tax avoided. "They are doing it too" isn't a valid excuse either.

Just a nitpick but they are not "evading" taxes, which would be illegal.

The correct term would be "tax avoidance", which is legal (albeit ethically questionable).

Re: Paradise Papers: Dear Tim Cook

#607

Post by pmoriarty »

tyingq wrote: post #240
loceng wrote: post #188

Earlier quoted context omitted.

These companies evading taxes are responsible for increased hardship and suffering of a society as well, leeching off of the nations they exist in, and being able to outcompete the honest organizations and people in them. The damages are far greater than the tax avoided. "They are doing it too" isn't a valid excuse either.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

"They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage."

They and their cronies write the laws.

Where governments aren't amazingly corrupt and can just bribed outright, corporations spend millions of dollars on lobbyists to get favorable legislation, and corporate exec and government official positions are revolving doors where the one goes to work for the other all the time and the one serves the interests of the other.

When government officials retire they regularly get cushy, high paying jobs at the very companies they favored while in office. They also regularly invest in the very companies their laws and policies favor.

Not to mention that high government positions and corporate executive positions are both staffed by the wealthy who look after the interests of the wealthy: to stay wealthy and become even wealthier.

As Alan Moore observed recently, "while in the West after many years of arduous struggle we are now allowed to elect women, non-white people and even, surely at least in theory, people of openly alternative sexualities, I am relatively certain that we will never be allowed to elect a man or woman of any race or persuasion who is poor."[1]

[1] - https://slovobooks.wordpress.com/2014/01/09/last-alan-moore-...

Re: Paradise Papers: Dear Tim Cook

#608

Post by saalweachter »

0xffff2 wrote: post #584
qznc wrote: post #526

Earlier quoted context omitted.

My (ultra-simplistic) idea would to only tax land and VAT. Abolish all other taxes. Unfortunately, governments like fine-grained taxes because it gives them the illusion of control.

I'm American, and thus not terribly familiar with the details of VAT. Is there anything about how it works that makes it less regressive than a simple sales tax? Sales tax as it exists in most US states is just about the most regressive tax scheme imaginable.

The basic answer is that the progressive European countries primarily funded through VAT are indeed using a regressive taxation system, but countering it with progressive spending.

The US system is a moderately progressive tax system but less progressive spending (not no progressive spending, but not nearly as much).

The argument is that you "buy off" the wealthy interests (both wealthy individuals and corporations) by using a regressive tax system, so they are happier to let you spend the money progressively, while in the US they are constantly fighting any progressive spending, because any tax cut will benefit them greatly.

Re: Paradise Papers: Dear Tim Cook

#609

Post by mikeash »

0xffff2 wrote: post #584
qznc wrote: post #526

Earlier quoted context omitted.

My (ultra-simplistic) idea would to only tax land and VAT. Abolish all other taxes. Unfortunately, governments like fine-grained taxes because it gives them the illusion of control.

I'm American, and thus not terribly familiar with the details of VAT. Is there anything about how it works that makes it less regressive than a simple sales tax? Sales tax as it exists in most US states is just about the most regressive tax scheme imaginable.

The only difference between sales tax and VAT is that VAT is applied at each stage of the production/sales chain, but only on the incremental value added at each stage, whereas sales tax is applied only at the very end of the chain on the entire value. The advantage of sales tax is that only the retail seller needs to worry about collecting it, and the advantage of VAT is that you don't need rules to figure out which stage along the chain is supposed to be the "final" one. (Consider small businesses buying product from a place like Costco. They either get double-taxed, or have to get some sort of exemption.)

In terms of the actual money collected, the two are the same. An X% tax rate results in the retail buyer paying X% more.

Re: Paradise Papers: Dear Tim Cook

#610

Post by mikeash »

Clanan wrote: post #281
tyingq wrote: post #240

Earlier quoted context omitted.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

The fix can certainly involve appealing to morals and human responsibility. A company is, after all, just a group of people. This should be a very strong tactic considering how liberal Silicon Valley is. The major players preach constantly about progressive ideals, yet fail to do more than the minimum when push comes to shove. My business partner and I purposefully pay normal taxes, avoiding accountants' crazy tax re…

If all the air molecules in a box spontaneously moved to one side of it at the same time, you could defeat entropy. This is no more likely to happen than the big players making it the norm to avoid tax reduction schemes.

In a box filled with air, molecules moving to one side leave a gap which results in increased pressure for molecules to move the other way. The same is true of big companies and taxes. You might be able to find some companies who would do this, and investors who prefer money to vague morality (and there's a lot of them) would abandon those companies and put more money into companies who avoid taxes as much as legally possible.

If we want to stop this behavior, the solution must be to make it illegal. Appealing to morality isn't going to get it done.

Consider that many industries literally kill people by poisoning the air or water. Not killing people as a moral principle is a lot more universally held than the idea of paying more tax than you're legally required to, but moral pressure didn't work there. Laws did.

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