I'd tax pollution and resource consumption, not profits.
Land is another good one to tax. It can't move or be hidden.
The missing profits of nations
91–100 of 103 posts
Re: The missing profits of nations
#92Re: The missing profits of nations
#93Earlier quoted context omitted.
You forget the effects of the "full reinvestment" policy. Amazon barely paid any tax at all. Not on sales, not on storage space, not on profits, not on ... (note: Jeff Bezos DID get enough money out of it to become the richest man on earth, but not through profit. Rather he got "capital gains on his shares", which is the same thing in practice, but a very different thing for the IRS. Oh, and since it's "paper profits…
What is the 20% subsidy that other companies couldn't also have? Other companies could reinvest all their profits and pay close to no taxes as well, right?
1) Not paying sales tax in the US due to "interstate commerce" exception
2) Ability to shop around for the cheapest jurisdiction for international sales (which means outside of the US Amazon paid low single digit tax rates on everything)
3) Ability to sell stuff from people and not being forced to prove they pay taxes or have it impounded
All 3 above are not available for brick&mortar retailers.
In case you were wondering why the CEO of Amazon, Jeff Bezos, is a Wall Street banker and not a geek.
Re: The missing profits of nations
#94Earlier 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…
At least in the EU, you pay the tax where the company is registered, or in case of individuals - where you declare your tax residency is. If you own a German construction company that occasionally drives across the border to France and builds houses there, you pay taxes on your earnings in Germany, of course. If you work for a Swedish company in Malmo, but actually commute every day from Copenhagen(I know a few people who do that) you pay taxes on your salary in Denmark, because that's where you live and where your tax residency is.
Re: The missing profits of nations
#95Earlier quoted context omitted.
> 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).
I'm not sure if you oppose sale tax only or also VAT. Both are regressive but VAT, while more complex, is based on taxing the added value so it is collected along the supply chain. In the supply chain everybody is charging VAT on their sales invoice and deduce VAT on their purchase invoice. BTW, you must pay to the tax authority the VAT your charged you client even if he/she didn't pay you.
https://tax.thomsonreuters.com/blog/onesource/sales-and-use-...
Re: The missing profits of nations
#96It seems that multinational uses price transfer to move profits from high tax country to low tax country. Would it make sense to tax trademarks, patents, goodwill from abroad to reduce this abuse?
Re: The missing profits of nations
#97Earlier 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?
Yes.
Re: The missing profits of nations
#98Earlier quoted context omitted.
> 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).
my apologies for the taxes 101 spiel, a lot of HNers don't seem to understand tax incidence. we are in complete agreement on US style sales tax.
Re: The missing profits of nations
#99Earlier quoted context omitted.
i don't intend to argue GP's point for them, but it is important to be aware of the difference between paying a tax and actually bearing the burden of that tax. if (hypothetically) you increase some tax by 5% and all the companies raise their prices by 5%, you might end up with a situation where the companies "pay" the tax, but it entirely comes from the pockets of consumers. this is called tax incidence, and you can…
Agreed. This is one of the reasons why a land-value tax is so good, in my opinion. Pretty much all of the burden of the tax is placed on landlords - if they could raise rents, they'd have already done so, so the tax pretty much entirely comes from the unearned value generated by holding the right to use a piece of land.
LVT is very appealing from the theoretical perspective. i would very much like to see it play out at scale somewhere. unfortunately, while it is fairly easy to add new taxes, you rarely see a new tax substituted for an old one.
Re: The missing profits of nations
#100Earlier quoted context omitted.
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).
my apologies for the taxes 101 spiel, a lot of HNers don't seem to understand tax incidence. we are in complete agreement on US style sales tax.
No worries, and no need to apologize, I don't take offense when people assume I don't know something (particularly economics and business topics on HN).