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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

#191

Post by pmontra »

bluecalm wrote: post #169
dalbasal wrote: post #147

Whether this policy is good or bad will depend on the details. But generally, in Europe, this kind of priposal is a populism magnet and a dancefloor for cheap politics. "Standing up to multinational corporations and making them pay their fair share (ra! ra!)" is exactly the type of rhetoric our most generic politicians love. An American equivalent might be some "government out of your hair" initiative to reduce profe…

This is because taxing profit is a very bad idea. It leads to situations where two companies doing exactly the same thing pay different taxes because one uses less efficient (and often more polluting) technology or just chooses to buy luxury cars for the employees instead of showing profits. The tax on profits is a tax on honesty in accounting and even if accountats are honest it's still impossible to determine fair…

> If your country is nice to live in people will move and pay tax there.

Many countries apparently nice to live in are doing their best to keep people out.

Re: Three European Countries Block Tax on Tech Giants

#192

Post by bsaul »

bluecalm wrote: post #180
bsaul wrote: post #108

Earlier quoted context omitted.

Sorry, the project is actually about taxing "revenue", i fixed it, thanks. Taxing on revenue means a corporation that actually loose money because its expenses (salaries, investmenst, etc) are larger than its sales would still have to pay taxes, making it loose even more money. It doesn't make any kind of sense unless you're targeting a very particular set of companies that you know are making money. In which case yo…

It does make tons of sense. What doesn't make sense is running a business that doesn't bring profits. Taxing revenue is one idea end accounting shenanigans and unfair practices like price gauging to eliminate competition which is now tax advantages strategy. Iam not a fan of it for other reasons but it does way more sense taxing profits which is just non workable idea. EDIT: replying to child (not possible to reply d…

You do realize the whole concept of a startup is about raising money because you know you can’t both grow fast enough to conquer a new market while at the same time making profits ?

Also, some companies like industries have huge revenues but make few profits because of the enormous cost to produce what they sell.

Try thinking about the various cases and you’ll soon realize there’s actually a very good reason why corporates taxes have always been on profits, since the very beginning.

Re: Three European Countries Block Tax on Tech Giants

#193

Post by kryptiskt »

_Codemonkeyism wrote: post #117

1. I knew Ireland was on the list without reading the article 2. Sweden is lobbied by Spotify 3. Denmark tries to attract Google. Cui bono.

Sweden has a successful tech economy and doesn't want to be held back by lumbering continental countries and their fears.

Re: Three European Countries Block Tax on Tech Giants

#194

Post by purple_ducks »

residentfoam wrote: post #162

This is one of the reasons EU is never gonna fly. Countries like Ireland are allowed to offer lower corporate taxation but still benefiting of the EU common market. No wonder why most companies have/move their tax domicile in these countries (like Nederland). This is unfair competition and EU should stop this s*t show. Businesses should be taxed based on where the revenue is generated and not where their tax domicile…

> This is one of the reasons EU is never gonna fly.

You mean a single market???

> Businesses should be taxed based on where the revenue is generated and not where their tax domicile is placed.

How would that make sense? If a product is built & sold in country X to a person in country Y, then only sales tax is paid to country Y. Revenue goes back to country Y to cover the costs and then tax is paid on what remains. That's like one of the fundamental things tying EU together.

Re: Three European Countries Block Tax on Tech Giants

#195

Post by snidane »

zhengyi13 wrote: post #187
snidane wrote: post #145

You're never gonna implement an income based tax system which would be fair to both corporations and employees. Corporations are currently taxed on profit, while employees on 'revenues'. So to make it fair you would: 1. tax corporations on revenue too. Which this thread is about 2. tax employees on profit. Food, gas, utilities, ... - these are basically cost of operation of a human being, aren't they? Income taxes wi…

If any given org is a monopoly, I'd fully expect that org to pass any new costs on directly to their captive consumers. Monopolies ought to be actively broken, not worked around.

Good point, but it is wrong. That applies to sales taxes. Not to monopoly taxes.

In well functioning market with many competitors, the price of good would be determined as costs + margin. Over time given enough competition the price should converge to that sustainable minimum basically. If you introduce sales taxes into the equation, then obviously you hike up the cost, therefore you shift this minimum.

Monopoly goods prices are not determined by cost, because there is no competition which would make it go lower over time. Monopoly prices on the other hand have opposite tendency - ie. to maximize to the point where almost all disposable income of its customers gets eaten up.

That's why you get the phenomenon of rents being ever so higher. They just catch up to increases in wages and eat it all away. There is no sufficient competition to compete the price away, simply because there is not enough land to house the people, especially in cities.

House rents are the biggest of the monopolies, because everyone has to pay it and often it is significant portion of a paycheck.

Back to the point. Introducing monopoly taxes has the exact opposite effect - it lowers the prices for consumers.

Explained further here http://blog.lvrg.org.au/2011/08/why-land-tax-cant-be-shifted...

Re: Three European Countries Block Tax on Tech Giants

#196

Post by nitrogen »

leifg wrote: post #184
amelius wrote: post #174

Earlier quoted context omitted.

> This is because taxing profit is a very bad idea. Wouldn't the same argument hold for income tax then? I mean, I can evade income tax to a certain extent by making my boss buy me a nice car, computer, bicycle etc.

That is absolutely true. The reason why it's not discussed on the same level is the scale. The profit out of salary (for most people) is just not big enough to justify an accountant to optimize. There is a lot to be said about replacing income tax with a pure consumption tax (it is one possible financial model for the universal basic income).

Company cars are a benefit in kind and are taxed in the US

Re: Three European Countries Block Tax on Tech Giants

#197

Post by bsaul »

adrianN wrote: post #135
slededit wrote: post #130

Earlier quoted context omitted.

In that case the economic efficient form of taxation is an expatriation tax.

How would that work in practice? The subsidiary in country A buys all their services from HQ with the price just so happening to consume the profits. How do you tax that without essentially stopping international collaboration?

That is the core of the problem. This is the only thing that people working on gafa tax evasion schemes should be working on day and night, and i’m pretty sure they’d get some help from the US tax department.

I can’t believe there aren’t ways to detect when a subsidiary buys services from HQ at abnormal prices.

Re: Three European Countries Block Tax on Tech Giants

#198

Post by purple_ducks »

ajnin wrote: post #150
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…

> how come all those companies HQ in europe are in ireland Ireland has been busted (among others) for secretly passing sweet taxation deals with Google, Facebook, Amazon & co. According to you, that's the way to do it, right ? Tax race to the bottom, give deals to big player that no small company has hope to ever negociate, that's sure to bolster competitors. Any kind of attemp to level the playing field by applying…

> Ireland has been busted (among others) for secretly passing sweet taxation deals with Google, Facebook, Amazon & co.

That is 100% uninformed nonsense.

If you are conflating it with Apple vs EU, you can read this primer: https://en.wikipedia.org/wiki/EU_illegal_State_aid_case_agai...

Nothing to do with a country offering a multinational a deal which results in a lower effective tax rate, and is something _EVERY_ country in Europe offers.

Re: Three European Countries Block Tax on Tech Giants

#199

Post by dsfyu404ed »

moorhosj wrote: post #136
this_user wrote: post #86

Earlier quoted context omitted.

> France and Germany take endless steps to protect their domestic economic interests It's not even that in this case, because it's not like there are serious European competitors to these companies (except maybe the odd Samwer clone here and there) that could even be protected. This is purely an attempt to rip these companies off, because the governments can.

The flip side of this argument is that the companies are ripping the countries off by using myriad tax loopholes, because they can. I find it interesting that the companies are often portrayed as smart for doing this, but politicians are jealous and incompetent. Almost like we worship businesses and malign government. I wonder whose interests that viewpoint supports.

>I find it interesting that the companies are often portrayed as smart for doing this, but politicians are jealous and incompetent. Almost like we worship businesses and malign government. I wonder whose interests that viewpoint supports.

Megacorps have been systematically screwing people for several hundred years. By comparison, most of the book of Exodus is a story about government systematically screwing people. People seem to prefer the devil they don't know right now. The arc of progress is long.

Re: Three European Countries Block Tax on Tech Giants

#200

Post by woolvalley »

snidane wrote: post #142
bsaul wrote: post #110

Earlier quoted context omitted.

i meant revenue (which i think you'll understand why it's a problem if you've ever had to pay any corporate tax in your life).

I don't like income taxes either, but to be fair, all employees are paying taxes out of their 'revenues'.

Depends on how many deductions they get ;)

I get in the USA:

1. Mortgage interest deduction (controversial)

2. Property tax deduction (now limited with trump)

3. Transit & parking deduction

4. Retirement account 'deduction'

5. Medical plan deductions (controversial vs single payer)

6. Tax free company snacks, cafeteria food, t-shirts / swag and morale events. I think on site electric car charging is tax free too?

7. Reduced sales tax rates on essentials such as food, clothing depending on the state.

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