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Three European Countries Block Tax on Tech Giants

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Re: Three European Countries Block Tax on Tech Giants

#51

Post by rusk »

digianarchist wrote: post #45
tyu1000 wrote: post #21

Earlier quoted context omitted.

Good for them. France and Germany take endless steps to protect their domestic economic interests regardless of what any EU legislation or sense of fairness says, Ireland is well within their rights to do the same.

Ireland have already been given some lucky charms by the EU. For example, they were given permission to set their corporate taxes to a ridiculously low 12.5%.

Spoken like somebody who knows very little about the topic.

The effective tax rate is far lower than this, but also, most countries have an effective tax rate for megacorps far lower than what they advertise once exemptions, subsidies and tax-breaks come into play.

Re: Three European Countries Block Tax on Tech Giants

#52

Post by gaius »

antidesitter wrote: post #41
gaius wrote: post #32

Earlier quoted context omitted.

That’s quite the claim. Got anything to back it up? Pretty easy really. Multiply the cost of unemployment benefits * number of company employees in that country. Then look at the tax evaded by the company. "You do the math". JSA in the UK is £73/week, or £3796/year. Let's say a company dodges £1Bn/year in taxes. How many people would they need to employ before the country breaks even?

Uh, what? Stop being vague and describe exactly what you mean. Response to edit: Please describe the full calculation (with factual numbers) of "national wealth", and then we'll talk.

LOL if you wish to disprove me do your own research! But I'll give you a hint, if tax evasion was good for a country, why would that country have taxes at all...?

Re: Three European Countries Block Tax on Tech Giants

#53

Post by xoa »

klez wrote: post #28
friedman23 wrote: post #25

Earlier quoted context omitted.

I'm so happy the people of Sweden are sane, my biggest problem with these taxes is that they are on revenue which essentially makes all low margin internet businesses unprofitable. How does that benefit consumers?

Honest question: why should I as a person be taxed on income (the closest I guess I can get to the concept of revenue) but a business should be taxed on profit? Can anyone explain to me the basis for such a distinction?

>the closest I guess I can get to the concept of revenue

I don't think that is actually the closest you could get, even ignoring that you're asserting two wildly different things should necessary be equivalent. But even so: Do you literally never take any deductions at all? Never expense anything? No mortgage or whatever? Have zero capital gains income of any kind an in turn never have any losses of any kind there? You just add up all income sources and simply pay the top rate off the sticker price and ignore all the rest? I mean, it's not impossible or illegal to do such a thing and pay more if you want to, but I think you'd be somewhat in the minority there. Even personal income taxes at least haltingly, imperfectly and politically try to take somewhat into account that there are certain expenses necessary for humans to live or that further societal goals and that if after paying those someone has little left over then the tax system should take that into account.

>why should I as a person be taxed...[differently from business]

Humans and businesses aren't the same thing, businesses (like government) are a tool composed of and serving humans. It is a structure for dealing with and directing flows of capital towards human decided ends, and all money that goes through it ultimately ends up in the hands of humans as income upon which it is taxed there too anyway. A "business" has direct societal costs in terms of corporate law and such, but it does not need to ever use an ambulance or get housing or food support or whatever. Taxes on business, separate from the humans that compose said business, should be for dealing with business specific requirements, cost internalization, and so on. It makes absolutely no sense to simply tax a business the same as a human, not even if you are simultaneously proposing not taxing any of the humans involved. If it's done be prepared for perverse consequences. If a business has high revenue with genuinely 3% margins that still represents a huge amount of money flowing from and too various humans (including all the employees, all suppliers and contractors, their employees, and on), "revenue" is still taxed somewhere. But if you then simply slap a tax on the revenue again and make the margin go negative now the business dies, simple as that, and all the flows cease. Is that actually your intention? Why not just seize it then and take it all for the government directly?

If you want to argue that the income flows going to humans are themselves ultimately not taxed fairly, that is not merely doable but I think fairly widely agreed at this point. And if you want to argue that specifically and properly assessed business income taxes should not be possible to evade as so many do sure, that too happily seems to be inching forward. But you seem to be going a lot more radical and just throwing out everything.

Re: Three European Countries Block Tax on Tech Giants

#54

Post by amarant »

gaius wrote: post #32
antidesitter wrote: post #22

Earlier quoted context omitted.

> whatever jobs these companies bring, they are still a net loss to the country as a whole, the country would literally be better off if those people were unemployed! That’s quite the claim. Got anything to back it up?

That’s quite the claim. Got anything to back it up? Pretty easy really. Multiply the cost of unemployment benefits * number of company employees in that country. Then look at the tax evaded by the company. "You do the math". JSA in the UK is £73/week, or £3796/year. Let's say a company dodges £1Bn/year in taxes. How many people would they need to employ before the country breaks even?

nah, replace unemployment benefits with the summed salaries of the employees, since it's probably fair to assume employees spend most of their salaries in the country where they live.

also, you seem to imply a scenario where the company is kicked out of the country. That does not recoup any taxmoney to the state. It also likely doesn't make the infrastructure cheaper to maintain or any less desired, so the correct equation is just that you'd loose whatever taxes they do pay (surely they don't dodge all of them),and the sum of the salaries of their employees, plus whatever service the company provides, and you gain nothing.

"you do the math"

edit: missing "don't"

Re: Three European Countries Block Tax on Tech Giants

#55

Post by richardwhiuk »

friedman23 wrote: post #47
pjc50 wrote: post #43

Earlier quoted context omitted.

The margins of businesses like Amazon are largely a matter of fiction, since the subsidiaries can make arbitary charges among themselves: https://www.theguardian.com/technology/2012/apr/04/amazon-fu...

A better solution would be to implement stricter accounting standards across the EU so that such tax dodges wouldn't be possible. This would solve the actual problem.

So they setup a business outside of the EU's jurisdiction and move the profit their? So all of the business in the EU is done at net no revenue (sales - costs - 'licensing fees' == 0).

What accounting standard means that business is making a profit in the EU?

Re: Three European Countries Block Tax on Tech Giants

#56

Post by rusk »

CompelTechnic wrote: post #49
klez wrote: post #28

Earlier quoted context omitted.

Honest question: why should I as a person be taxed on income (the closest I guess I can get to the concept of revenue) but a business should be taxed on profit? Can anyone explain to me the basis for such a distinction?

Let's say you operate a low margin business, such as a gas station. All numbers are before tax. For the year, you spend $1,000,000 paying for fuel, convenience store supplies, electricity, wages, etc. You get $1,050,000 in revenue from your customers, for a fairly realistic margin of 5%. Now let's say you run a software business. You pay $500,000 in electric bills, computers, wages, etc, and collect $1,000,000 in rev…

By this reasoning I should only be taxed on income once food, fuel and housing costs are taken into account, or am I missing something? I end up paying VAT on a lot of these things as well ...

I do get tax credits for some essentials but it's relatively speaking a miniscule amount.

There's an interesting formula for a progressive tax regime if anybody wants to take it up ...

Re: Three European Countries Block Tax on Tech Giants

#57

Post by patd »

CompelTechnic wrote: post #49
klez wrote: post #28

Earlier quoted context omitted.

Honest question: why should I as a person be taxed on income (the closest I guess I can get to the concept of revenue) but a business should be taxed on profit? Can anyone explain to me the basis for such a distinction?

Let's say you operate a low margin business, such as a gas station. All numbers are before tax. For the year, you spend $1,000,000 paying for fuel, convenience store supplies, electricity, wages, etc. You get $1,050,000 in revenue from your customers, for a fairly realistic margin of 5%. Now let's say you run a software business. You pay $500,000 in electric bills, computers, wages, etc, and collect $1,000,000 in rev…

I think his argument was that, as you said, it would be highly gameable. But it's also the case for companies and they're (ab)using it to the point of paying little to no taxes in some countries.

Re: Three European Countries Block Tax on Tech Giants

#58

Post by shaki-dora »

logifail wrote: post #23
shaki-dora wrote: post #18

Earlier quoted context omitted.

The decision-making process has mostly moved to the so-called "double majority" (half + 1 of member states, comprising 50%(?) of the population). Only some areas still require unanimous consent. And even those have historically not been insurmountable. What usually happens is a bundling of issues until you get an overall package that's net positive for everyone. What helped, historically, was a fundamental willingnes…

>> What usually happens is a bundling of issues until you get an overall package that's net positive for everyone. That sounds too good to be true, can you give examples?

It's just basic horse-trading. A somewhat extreme yet very basic example would "all of the law" (for some specific jurisdiction). Assuming this isn't North Korea, you will probably find an overwhelming majority considering the status quo to be better than completely lawless anarchy, even though every single individual can probably point at some individual law that they would rather abolish.

International trade agreements make good examples: People often decry their incredible size, with thousands of pages and topics ranging from the legal system to GMO to copyright to cheese. Yet the size is the natural result of requiring the package to contain every signing country's pet issues. If Canada is mildly opposed to adopting US standards for turn signal frequency, just add a provision defining minute details for maple syrup classification and they'll be happy again. And on to Japan... etc.

Another example from US law would be the "sequester" that put caps on both military as well as civilian spending. If you want something broader, it's how the budget process used to work, and to some extend still does. Yes, these examples from the US require only majorities (or 60-vote supermajorites in the Senate), not unanimity. But the mechanism is identical.

That mechanism is, by the way, why there have been calls to once again allow "pork", i. e. specific grants of money to projects in individual congressional districts. While those payments had an incredibly bad reputation as being wasteful and borderline corrupt, they allowed for "bundles" of legislation to be tailor-made to get exactly the quorum required. Money happens to be perfect in that context as it is in others: it's fungible, meaning you don't have to start researching each districts' current needs when you want to make an offer. It's divisible, allowing the sum to be just right to get the vote without "overpaying" as often happens if you only have the crude instrument of actual policy.

And there's one advantage of money that's unique to this use: Nobody actually cares that much about spending. While yes, overall spending levels are somewhat significant, giving some 12-term Republican from East Nowhere, MI a million $ for whatever idiotic pet project they care about carries far less of a risk of losing you support on the other side of the spectrum as implementing their favorite policy (slightly exaggerated: vegan-only school lunches; or required heterosexual target practice in preschool) would.

Re: Three European Countries Block Tax on Tech Giants

#59

Post by clairity »

klez wrote: post #28
friedman23 wrote: post #25

Earlier quoted context omitted.

I'm so happy the people of Sweden are sane, my biggest problem with these taxes is that they are on revenue which essentially makes all low margin internet businesses unprofitable. How does that benefit consumers?

Honest question: why should I as a person be taxed on income (the closest I guess I can get to the concept of revenue) but a business should be taxed on profit? Can anyone explain to me the basis for such a distinction?

because in the age of paper receipts, it was an undue burden on taxpayers to impose the detailed accounting needed to figure out your legitimate cost of living as an individual or family.

with our lives now largely tracked electronically, that’s becoming less true (but is still at least an undue burden for the ~40% of the population who are poor or near poor).

Re: Three European Countries Block Tax on Tech Giants

#60

Post by dbdjfjrjvebd »

rusk wrote: post #51
digianarchist wrote: post #45

Earlier quoted context omitted.

Ireland have already been given some lucky charms by the EU. For example, they were given permission to set their corporate taxes to a ridiculously low 12.5%.

Spoken like somebody who knows very little about the topic. The effective tax rate is far lower than this, but also, most countries have an effective tax rate for megacorps far lower than what they advertise once exemptions, subsidies and tax-breaks come into play.

Yes but a lot of that is done by allowing large companies to offshore their profits.
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