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The missing profits of nations

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Re: The missing profits of nations

#81

Post by ucaetano »

leetcrew wrote: post #72
ucaetano wrote: post #57

Earlier quoted context omitted.

The problem is that sales taxes are regressive, disproportionally impacting those for whom consumption is a large % of their total income. Particularly poor people. And sales taxes (vs. VAT) is a terrible idea overall, it is a tax on consumers, not on companies, as it only applies on the final sale to consumer.

> And sales taxes (vs. VAT) is a terrible idea overall, it is a tax on consumers, not on companies, as it only applies on the final sale to consumer. you are correct that sales tax is almost always regressive, but please be careful making this kind of "just so" argument regarding taxes. the place in the production pipeline where taxes are collected has almost nothing to do with who ultimately bears the burden of the…

Oh, I know, all the splitting up on price-elasticity of demand and so on.

But the issue with sales taxes is that it is applied on the final sale, which generate distortions when the products are being imported, or have a long supply chain spread across a country, as it is a tax on the consumer, the value is only capture at the consumer location, not along the supply chain (that's what I meant as a terrible idea).

Re: The missing profits of nations

#82

Post by ucaetano »

NeedMoreTea wrote: post #60
ucaetano wrote: post #57

Earlier quoted context omitted.

The problem is that sales taxes are regressive, disproportionally impacting those for whom consumption is a large % of their total income. Particularly poor people. And sales taxes (vs. VAT) is a terrible idea overall, it is a tax on consumers, not on companies, as it only applies on the final sale to consumer.

OK I admit I was thinking of VAT when I made the comment (I'm in the UK), and also the typical exclusions from VAT for food, books etc and partial liability on businesses (sales minus allowable purchases). Undoubtedly a sales tax can be regressive but don't those exceptions move it far enough into being a tax on discretionary purchases? There doesn't seem much anti-VAT feeling in the UK outside of occasional axe-grin…

Europeans have a more friendly relationship with taxes than Americans. But VAT, despite being regressive, is still required, as today we have very complex businesses and you want to prevent gaming, where corporations optimize for allocating their value into a certain channel that is untaxed.

For example, by placing their operations in a separate country with lower taxes and shipping from there. So you need income tax, sales/vat tax, and corporate taxes to prevent any gaps.

Re: The missing profits of nations

#83

Post by Retric »

candiodari wrote: post #77
Retric wrote: post #76

Earlier quoted context omitted.

You don’t add percentages that way. 20% tax on a 20% tax on a 20% tax = 48.8% tax not 60% tax.

I did calculate them like that, actually.

Write down the calculation that hits 81% tax using a specific location and actual taxes for a single company.

Re: The missing profits of nations

#84

Post by megy »

ucaetano wrote: post #57
NeedMoreTea wrote: post #10

Earlier quoted context omitted.

Nothing wrong with a sales tax being part of a possible solution.

The problem is that sales taxes are regressive, disproportionally impacting those for whom consumption is a large % of their total income. Particularly poor people. And sales taxes (vs. VAT) is a terrible idea overall, it is a tax on consumers, not on companies, as it only applies on the final sale to consumer.

> The problem is that sales taxes are regressive, disproportionally impacting those for whom consumption is a large % of their total income.

So? That is a problem for necessities like food, housing. But not for advertising, phones and computers, gas, cars, etc...

Re: The missing profits of nations

#85

Post by ralusek »

eecc wrote: post #51
dang wrote: post #2

Editorializing titles like this is against HN's guidelines ( https://news.ycombinator.com/newsguidelines.html ). When accounts do this, they eventually lose submission privileges. If you'd read the guidelines and follow them when posting here, we'd appreciate it. (Submitted title was 'Don't be taxpayer – Google Alphabet made $19.2B in revenue in Bermuda'.)

Also because the original title is a smug pun on “the wealth of nations”, Adam Smith’s essay that (neo)liberists trump around like Mao’s Red Book... Smith argued that letting capitalism loose would benefit us all - the wealth in his title - yet there seems to be quite a bit of it missing ;)

Are you suggesting that capitalism has not benefitted us all?

Re: The missing profits of nations

#86

Post by dang »

ralusek wrote: post #85
eecc wrote: post #51

Earlier quoted context omitted.

Also because the original title is a smug pun on “the wealth of nations”, Adam Smith’s essay that (neo)liberists trump around like Mao’s Red Book... Smith argued that letting capitalism loose would benefit us all - the wealth in his title - yet there seems to be quite a bit of it missing ;)

Are you suggesting that capitalism has not benefitted us all?

Please don't do generic ideological arguments on HN. There's nothing new in them.

https://news.ycombinator.com/newsguidelines.html

Edit: also, could you stop posting unsubstantive comments generally?

Re: The missing profits of nations

#87

Post by marcosdumay »

digi_owl wrote: post #79
marcosdumay wrote: post #78

Earlier quoted context omitted.

What is stopping countries from taxing the importation of services?

I'm no accountant, but i have the impression that there are various international agreements in place that basically says that earnings are to be taxed where they are made. This is why there has been a bunch of hoopla over Irish tax incentives for example, as it allowed the likes of Microsoft, Apple and Google to claim all sales inside EU was done by their Irish office. The rest simple earned just enough to cover exp…

It's a tax on import, not on earnings. The buyer would pay it, not the seller.

Re: The missing profits of nations

#90

Post by tomp »

jaredklewis wrote: post #80
tomp wrote: post #70

Earlier quoted context omitted.

> I assume you are referring to the recent tariffs, in which case we gave China an ultimatum No, I'm referring to the fact that foreign (Western) companies cannot sell in China unless part of the products are made there, and can't own Chinese companies without Chinese co-ownership. It all resulted in a massive transfer of IP to China, simply because for most companies, the tradeoff still made sense (short-term at lea…

Interesting. Comment makes more sense now. The amount of law and international agreements that would be overturned by such a change is truly staggering, so I’d still say this is the antithesis of simple. Further, I’m not sure China’s model, and protectionism in general, is a better strategy. No way to know, but I expect China’s economy would be stronger if it didn’t have these protections. Like I said, there are a hu…

I’d apply the same logic to everything. I’d also forbid money transfers to/from tax havens and ownership of property/companies by entities in tax havens or other countries that don’t reveal beneficial owners... There’s a lot of abuse happening, and it mostly involves the same few countries. The rest of us (i.e. employees and small business owners) end up paying so much more.

(By “forbid” I of course mean “tax so heavily it just doesn’t make any economic sense”.)

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