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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

#91

Post by shaki-dora »

antidesitter wrote: post #22
gaius wrote: post #17

A company that leverages the favourable infrastructure and institutions of a country without paying its fair share is quite simply siphoning money from the taxpayers of that country into the pockets of its shareholders, the money that maintains that infra and those institutions. Politicians need to take a step back and realize that whatever jobs these companies bring, they are still a net loss to the country as a who…

> 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 comment is obviously wrong, proven easily by taking the extreme case of the policy applying to all employers: none of them paying taxes would quickly ruin any country, yes. But everyone being unemployed would get you to the same miserable state even faster.

But the argument doesn't have to be as extreme as that to support enforcement of some sort of equitable taxation: Take, again, the extreme case of the policy applying to all employers. That's broadly equivalent to abolishing corporate taxation PLUS that corporate windfall accumulating not in the countries they operate in, but whatever happens to be the go-to tax haven.

This being taxes on profits, there's zero effect on the company's activity (i. e. investment, hiring etc.) in the country. That's because Facebook will let someone in, say, Brasil, spend $5000 on ads irregardless of them having to give half of that to the local government. It's either $2500 or $5000 in profits, produced with 0 marginal costs.

Net result therefore is a zero-sum game between that government, and Facebook's shareholders. Even ignoring the geographic aspect (very little of Facebook's shareholders being likely to spend that money in Brasil), it seems rather intuitive that the public is better served by the money taking another lap paying for some school, rather than allowing some retired VC to improve the decorations on his next yacht.

Re: Three European Countries Block Tax on Tech Giants

#92

Post by Skrillex »

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…

>Individual people's income taxes cannot be treated this way, because the closest analogy to "business expenses" for a person's lifestyle is their cost of living. If cost of living were deductible it would be highly gameable and ripe for abuse by numerous parties.

That is the thing. Maybe a person could do that if the rules let them, but businesses are already doing it, at scale. I think that either businesses should not be able to do it, or normal people should be able to do it. As for the "low margin business" example, I see no reason for the government to support any particular kind of business over another under a capitalist system.

Re: Three European Countries Block Tax on Tech Giants

#94

Post by oliwarner »

nradov wrote: post #74
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%.

Why would a sovereign state even need permission from others about purely internal matters such as corporate income tax rates?

Because it's not just internal.

The EU allows for free cross boarder trade and movement of assets within the EU. Having a lower corporate tax rate in one country means businesses operating in the EU put their revenue through there. It's an automatic incentive.

There are rules here because otherwise it would be a race to the bottom. Each country wants Amazon, Google, etc for their employees' income tax.

The whole EU loses out from one state giving multinationals preferential treatment.

Re: Three European Countries Block Tax on Tech Giants

#95

Post by icebraining »

rusk wrote: post #56
CompelTechnic wrote: post #49

Earlier quoted context omitted.

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 ...

That's kind of the purpose of deductions; it's common for housing (particularly mortgage), education and health costs to be deductible on one's income tax, much like a business deducts its expenses to calculate profit.

Taxing only your disposable income would mean that a person living in a mansion would pay much less than someone living in a small home, which is weird; arguably, the extra niceness of the house is "profit", whereas the shareholders don't usually benefit from paying more for their inputs (some exceptions notwithstanding).

Re: Three European Countries Block Tax on Tech Giants

#96

Post by oarsinsync »

rusk wrote: post #70
vetinari wrote: post #62

Earlier quoted context omitted.

The difference is, that the Irish rate applies to any business taxing its income in Ireland. It doesn't have to be a megacorp, they do not have to have special relations to get subsidies or tax breaks. It may be your company, if your registered and operate it there. That's not the case in other EU countries.

The difference is, that the Irish rate applies Speaking as an Irish resident, I can tell you that this is effectively untrue. Indigenous businesses, or even businesses small enough to not get the sweetheart treatment of the relevant authorities definitely do not get equal treatment. The difference is vast .

Are you suggesting that indigenous and/or small businesses are taxed at a higher rate than the published standard 12.5%, or that they don't qualify for even better exemptions and thus lower effective rates than 12.5%?

GP was indicating that Ireland has one of the lowest standard corporation taxes at 12.5% available to everyone, not that there aren't even better effective rates offered to larger corps & multinationals.

Re: Three European Countries Block Tax on Tech Giants

#97

Post by shaki-dora »

0xfaded wrote: post #29

Apple and Facebook are currently building massive datacentres in Denmark, and Google has bought two plots for future datacentres. They have definitely been wooed to denmark, labour and consumer electricity prices are some of the highest in the world. https://facebook.com/OdenseDataCenter/ https://www.reuters.com/article/us-apple-denmark/apple-to-bu... https://stateofgreen.com/en/partners/state-of-green/news/goo...

I doubt that some data centers make much of a difference. Those tend to be employ maybe two cleaners, one depressed robot and one or two jaded administrators, plus their pot dealer.

They also don't buy anything locally, except electricity at negotiated prices close to or below the costs of production. Maybe they lead to some earnings/profits to be at their location? Considering the issue discussed here, I doubt that.

Re: Three European Countries Block Tax on Tech Giants

#98

Post by nradov »

foepys wrote: post #76
nradov wrote: post #74

Earlier quoted context omitted.

Why would a sovereign state even need permission from others about purely internal matters such as corporate income tax rates?

Because they are a member of the EU, a trade union that evolved into much more. They can choose to leave and also lose all their tech HQs that are only located there because Ireland is part of the EU.

That's simply false. The current EU membership terms don't grant it oversight of member state corporate tax rates.

Re: Three European Countries Block Tax on Tech Giants

#99

Post by kachurovskiy »

bsaul wrote: post #82

As a french, seing french government officials trying to impose their knee-jerk « let’s tax it » reaction to any kind of problem makes me absolutely sick. They’re just a bunch of jealous incompetent insufferable pompous politicians than don’t understand a thing about the private sector and so instead of trying to fix the numerous reason why we don’t have any competitor to google / facebook etc ( such as our best engi…

Please help me understand why is it okay to tax people on income but not corporations?

Re: Three European Countries Block Tax on Tech Giants

#100

Post by nradov »

ionised wrote: post #84
nradov wrote: post #74

Earlier quoted context omitted.

Why would a sovereign state even need permission from others about purely internal matters such as corporate income tax rates?

because that sovereign state agreed to an economic union with other nations.

That's a non sequitur. One matter has nothing to do with the other.
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