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Tech giants face 2% UK digital services tax

bbc.com

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Re: Tech giants face 2% UK digital services tax

#81

Post by Lio »

jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

If Amazon raised their prices to cover the tax they're not currently paying High Street retail shops would at least stand a fighting chance against them.

Re: Tech giants face 2% UK digital services tax

#82

Post by tonmoy »

pastor_elm wrote: post #76
jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

>Those companies will just raise their prices to cover the tax How exactly will Facebook raise prices in a way that it will hit the average consumer?

More ad/content ratio

Re: Tech giants face 2% UK digital services tax

#83

Post by nickdothutton »

The reality is that the large US tech giants this is aimed at are essentially mercantile companies. Paying little or no UK tax on significant UK revenues, which are then remitted via tax efficient structures to the US parent. Profits are a Will-o'-the-wisp which appears and disappears in whatever tax jurisdiction is most efficient at the time. For this reason I don't see corporation tax (which is <10% of total tax receipts) being something future governments can count on (unless that government is home to the mercantile company). TLDR: Find somewhere else to get the 9%.

Re: Tech giants face 2% UK digital services tax

#84

Post by darawk »

pastor_elm wrote: post #76
jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

>Those companies will just raise their prices to cover the tax How exactly will Facebook raise prices in a way that it will hit the average consumer?

They'll raise prices on advertisers in the UK, who will subsequently raise prices on consumers.

Re: Tech giants face 2% UK digital services tax

#85

Post by dragonwriter »

pastor_elm wrote: post #76
jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

>Those companies will just raise their prices to cover the tax How exactly will Facebook raise prices in a way that it will hit the average consumer?

> How exactly will Facebook raise prices in a way that it will hit the average consumer?

The average consumer is also a worker and depends on an employer that will be paying higher advertising costs for the same benefit.

Re: Tech giants face 2% UK digital services tax

#86

Post by Lio »

mFixman wrote: post #40
dabeeeenster wrote: post #16

Ed Sheeran pays more tax in the UK than Amazon.

Ed Sheeran is a person and is taxed differently than a company. That article is manipulative clickbait. UK Amazon executives pay more taxes than Ed Sheeran.

I doubt that and I'd like to see a source to back that asertion up.

Here's one for Ed paying more than Amazon

https://www.fastcompany.com/90251523/ed-sheeran-paid-more-uk...

Re: Tech giants face 2% UK digital services tax

#87

Post by bcOpus »

tonmoy wrote: post #82
pastor_elm wrote: post #76

Earlier quoted context omitted.

>Those companies will just raise their prices to cover the tax How exactly will Facebook raise prices in a way that it will hit the average consumer?

More ad/content ratio

I’m pretty sure FB already maximizes their profit per user based on what they think the user can tolerate, and I doubt it can be arbitrarily pushed further on a whim.

Re: Tech giants face 2% UK digital services tax

#88

Post by mr_toad »

pastor_elm wrote: post #76
jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

>Those companies will just raise their prices to cover the tax How exactly will Facebook raise prices in a way that it will hit the average consumer?

More to the point, if Facebook isn’t selling anything to UK consumers, will it pay any tax?

Re: Tech giants face 2% UK digital services tax

#89

Post by duxup »

jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

" They're just using it as a point of negotiation for a new US trade deal after Brexit."

Is this really that useful in that case? Not to say the UK is irrelevant, but after leaving the EU the UK won't be as big a market, is a 2% tax on a market dominated by the US really much of a threat to, anything?

Not to say the tax has no value at all in other ways (revenue) but as a negotiating tacit, not sure what it does.

Re: Tech giants face 2% UK digital services tax

#90

Post by cma »

dragonwriter wrote: post #85
pastor_elm wrote: post #76

Earlier quoted context omitted.

>Those companies will just raise their prices to cover the tax How exactly will Facebook raise prices in a way that it will hit the average consumer?

> How exactly will Facebook raise prices in a way that it will hit the average consumer? The average consumer is also a worker and depends on an employer that will be paying higher advertising costs for the same benefit.

And now %X of that cost will return to the economy instead of going overseas. Ad costs should stay roughly the same, since they are the result of bidding. It's not like Facebook leaves $2 on the table and says we'll keep that there for you guys unless we get taxed.

When something has near zero marginal cost, it is all just about demand. The only scarcity is caused from other bidders.

Why should a country send %X margin on all of their consumer products overseas (via ad costs) to someone who is selling their own citizens' content and capturing the users/locking them in with network effects? There is a lot of innovation at Facebook et. al., but they get a massively outsized portion of the network's value when you compare what they put in vs. what users are putting in.

Where it could hurt would be a service that can barely break even using ad revenue and goes under as a result. But for big corps with network-effect lock-in in their segment, it seems like a net win for any country that does this.

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