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France Plans 5% Digital Tax as Governments Chase Internet Giants

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Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#191

Post by ttoinou »

tonyedgecombe wrote: post #160
ttoinou wrote: post #158

Earlier quoted context omitted.

> Or stop taxing "profits" By "profits" I meant to stop business being able to claim expenses and reduce the tax. We could replace complex taxation scheme only-on-positive-profit with a simple 1% (for example) tax on all transfers, on the total amount, no matter what is the purpose of the money transfer

The trouble with that is it will penalise low margin businesses, Apple could easily afford it on their 30% margin but a budget PC maker with a 3% margin would struggle.

Small businesses are already penalized by our current laws and ways of taxing profits. I believe the alternative I am proposing (that will never come to reality) is easier for everyone

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#192

Post by ip26 »

AlexTWithBeard wrote: post #172
tonyedgecombe wrote: post #127

Earlier quoted context omitted.

The obvious solution is to eliminate corporation tax and shift it to areas that are harder to avoid such as dividends, capital gains and land value.

Sounds very reasonable. I'm sure there's a catch, but I don't see where it is. Taxing a business looks like a weird thing to do: a business can only spend money on business-related stuff pretty much by definition. In order for money to be spent on non-busines things, it should be paid out as a salary, dividends or something like that which we know how to tax pretty well. I'm certainly missing something, but what?

Not an economist so I don't know the official reason. But a corporation can theoretically accumulate profits indefinitely without making a payout, while governments need stable yearly revenue.

Maybe more material from a public policy point of view is that we like to tax different things at different rates, to favor or disfavor spending on various things. Hard to tax a salary based on what the employer spent their money on.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#193

Post by IanCal »

ttoinou wrote: post #157
markdown wrote: post #148

Earlier quoted context omitted.

You mean like VAT/GST.

Not like GST : it would be on all transactions in the legal currency, including B2B. There wouldn't be an artificial difference between "businesses" and "customers" Not like VAT : VAT is way more complex and expenses are deducted at each step

So cheaper for large integrated companies? Sounds like it'd really hurt competitors starting up.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#194

Post by infinity0 »

sparkie wrote: post #189
infinity0 wrote: post #185

Earlier quoted context omitted.

"A government is a legal entity, but it's also a legal fiction. [..] So what is a tax that governments collect? It's simply an additional income that human people benefit from. [..] If you're just a lowly citizen with no control or insight into a government's bureacracy [..]" etc etc Sorry, you can't have it both ways - pretend that corporations and governments are somehow different. The cognitive dissonance here is…

Governments and corporations are very different. A corporation needs to generate profit. If they don't profit, their shareholders don't get paid! If they continually don't profit, they go out of business and lose the investments they put into the corporation. Government has no obligation to profit. Quite the opposite. Government enterprises simply spend (other people's) money. If government worked on a profit motive…

You're grasping onto ideological straws. Both governments and corporations have to manage their finances, together with non-financial aspects of reality, in order to survive. Smart corporations don't only look at the bottom line on their account sheets.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#195

Post by sparkie »

infinity0 wrote: post #194
sparkie wrote: post #189

Earlier quoted context omitted.

Governments and corporations are very different. A corporation needs to generate profit. If they don't profit, their shareholders don't get paid! If they continually don't profit, they go out of business and lose the investments they put into the corporation. Government has no obligation to profit. Quite the opposite. Government enterprises simply spend (other people's) money. If government worked on a profit motive…

You're grasping onto ideological straws. Both governments and corporations have to manage their finances, together with non-financial aspects of reality, in order to survive. Smart corporations don't only look at the bottom line on their account sheets.

They both have to manage finances, but governments are spending other people's money. A corporation is people risking their own money on profitable ventures. How you can think they are in any way similar is beyond me. Governments have little accountability because they are so large, and they can't "go out of buisiness" because they don't have competition. They merely have a quadrennial theatrical show where two "directors" appear to compete for business, but where the shareholders (the taxpayers) ability to actually influence those "business" decisions are almost zero.

If there were a free market for most of the services government takes it upon themselves to provide (by their force on monopoly), the government would be out of business in nearly every area because there would be better competitors offering better services at lower costs.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#196

Post by infinity0 »

sparkie wrote: post #195
infinity0 wrote: post #194

Earlier quoted context omitted.

You're grasping onto ideological straws. Both governments and corporations have to manage their finances, together with non-financial aspects of reality, in order to survive. Smart corporations don't only look at the bottom line on their account sheets.

They both have to manage finances, but governments are spending other people's money. A corporation is people risking their own money on profitable ventures. How you can think they are in any way similar is beyond me. Governments have little accountability because they are so large, and they can't "go out of buisiness" because they don't have competition. They merely have a quadrennial theatrical show where two "dire…

> governments are spending other people's money. A corporation is people risking their own money on profitable ventures

This is what you choose to believe, to maintain your internal consistency in your own ideology. From the point of view of the law, it is the government's money after they tax you, and the government believes that it is their money, in order to maintain their internal consistency of their ideology that justifies their legitimacy. They "risk" their money on various government / societal ventures and their "profit" is their continual acceptance by the citizens.

In both cases, forgetting about the ideology, what happens in reality is a transfer of wealth. I have to pay a government in order to live on land that they have physical control of, I have to pay a corporation in order to eat food that they have physical control of, or obtain other essential life resources from them.

Some governments and corporations are so large they can't "go out of business" because they don't have competition indeed. Some are smaller and they have to cater to individual customer / citizen demands more readily.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#197

Post by tonyedgecombe »

ip26 wrote: post #192
AlexTWithBeard wrote: post #172

Earlier quoted context omitted.

Sounds very reasonable. I'm sure there's a catch, but I don't see where it is. Taxing a business looks like a weird thing to do: a business can only spend money on business-related stuff pretty much by definition. In order for money to be spent on non-busines things, it should be paid out as a salary, dividends or something like that which we know how to tax pretty well. I'm certainly missing something, but what?

Not an economist so I don't know the official reason. But a corporation can theoretically accumulate profits indefinitely without making a payout, while governments need stable yearly revenue. Maybe more material from a public policy point of view is that we like to tax different things at different rates, to favor or disfavor spending on various things. Hard to tax a salary based on what the employer spent their mon…

A corporation could accumulate although I expect shareholders would stop that fairly quickly.

You could still implement Pigovian taxes such as fuel or alcohol duties.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#198

Post by tonyedgecombe »

IanCal wrote: post #193
ttoinou wrote: post #157

Earlier quoted context omitted.

Not like GST : it would be on all transactions in the legal currency, including B2B. There wouldn't be an artificial difference between "businesses" and "customers" Not like VAT : VAT is way more complex and expenses are deducted at each step

So cheaper for large integrated companies? Sounds like it'd really hurt competitors starting up.

It would kill any business with a long supply chain, the only manufacturers left would be the ones where ore arrives at one end of the factory and finished goods come out of the other end.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#199

Post by ttoinou »

IanCal wrote: post #193
ttoinou wrote: post #157

Earlier quoted context omitted.

Not like GST : it would be on all transactions in the legal currency, including B2B. There wouldn't be an artificial difference between "businesses" and "customers" Not like VAT : VAT is way more complex and expenses are deducted at each step

So cheaper for large integrated companies? Sounds like it'd really hurt competitors starting up.

It would be cheaper for everyone because of tax simplifications. Current system is already unfair to a lot of group of people, including small businesses. And large company also have money transfers so I am not sure to understand the example unless we go into the specifics a little bit more

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#200

Post by makapuf »

briandear wrote: post #177
BartBoch wrote: post #141

Earlier quoted context omitted.

In this case, this will be the race to the bottom and smallest countries will be able to charge 0% tax just for the sake of office space rented since their domestic market is small enough to not bring much of income tax (Luxembourg for example). The issue here is with omitting responsibilities. If a company makes hundreds of millions of income in a country, it should pay some taxes there. There is a huge push in Pola…

If a small country can afford a 0% tax, why shouldn’t they avail themselves to that competitive advantage? Unified tax rates amount to a tariff on more fiscally competitive countries.

They would have the right to do so. And other country might have the right to place a 150% tariff on this country goods. Or place those on the tax haven list. Other countries cannot stop them from applying a zero tax. But those same countries that provide all the markets, infrastructure, schools, manufacturing and support all the population to make it work can also choose not to trade with those.
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