France Plans 5% Digital Tax as Governments Chase Internet Giants • Hacker News Board

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

#241

Post by BartBoch » Mon, Mar 04, 2019, 2:10 AM UTC

AnthonyMouse wrote: post #237

BartBoch wrote: post #233

Earlier quoted context omitted.

The idea is to support small companies. I don't see how this would punish small companies at all. Those companies, due to the inability to avoid/reclaim taxes pay more than 10% now (even with an accountant). I know a lot of companies (a few people large) to pay that much.

> Those companies, due to the inability to avoid/reclaim taxes pay more than 10% now (even with an accountant). I know a lot of companies (a few people large) to pay that much. And a 1.5% rate isn't enough to replace those taxes, so it would be paid on top of them . Moreover, revenue taxes disproportionately impact non-vertically integrated smaller companies. Megacorp is vertically integrated, they pay 1.5%. A supply…

Actually, it is. The 1.5% tax rates will bring more than the current system. This is not something made up. This was well researched and whole armies of economists are behind it. More and more countries are considering it.

Now megacorps don't pay taxes at all, so what's better?

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

#242

Post by NicoJuicy » Mon, Mar 04, 2019, 2:12 AM UTC

sbacic wrote: post #208

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…

There would be no race to the bottom if there was a real, tangible benefit to being established in a high tax country - ie, better public services, a more educated workforce, more business friendly environment, etc. As it is right now, very few countries justify their tax rates and that prompts people and businesses to do the rational thing and go where they pay less for the same thing. I think it's very concerning t…

You are pretty wrong. Taxes aren't about limiting market access, tariffs are.

Taxes are ways to keep the money in the country, reinvest it so it ripples back to the civilians.

Tech companies are avoiding this.

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

#243

Post by AnthonyMouse » Mon, Mar 04, 2019, 2:22 AM UTC

BartBoch wrote: post #241

AnthonyMouse wrote: post #237

Earlier quoted context omitted.

> Those companies, due to the inability to avoid/reclaim taxes pay more than 10% now (even with an accountant). I know a lot of companies (a few people large) to pay that much. And a 1.5% rate isn't enough to replace those taxes, so it would be paid on top of them . Moreover, revenue taxes disproportionately impact non-vertically integrated smaller companies. Megacorp is vertically integrated, they pay 1.5%. A supply…

Actually, it is. The 1.5% tax rates will bring more than the current system. This is not something made up. This was well researched and whole armies of economists are behind it. More and more countries are considering it. Now megacorps don't pay taxes at all, so what's better?

> The 1.5% tax rates will bring more than the current system.

Under your current economic structure, surely. But once you make it so that companies can reduce their supply chain's tax burden from ~20% to 1.5% by becoming vertically integrated, what do you expect to happen next?

> Now megacorps don't pay taxes at all, so what's better?

Option one is income tax at e.g. 20%, local companies pay 20% while megacorps pay ~0%.

Option two is revenue tax at e.g. 1.5%, non-vertically integrated companies cumulatively pay ~20% while megacorps pay 1.5%.

Option three is something like 20% DBCFT, so that everyone who sells domestically pays 20%. This is the better option.

Arguing that two is better than one is a false dichotomy that preserves most of the bad consequences of existing system (multinational megacorps pay less than others) while introducing some new ones (highly advantageous to become a vertically integrated conglomerate).

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

#244

Post by Apocryphon » Mon, Mar 04, 2019, 2:22 AM UTC

adventured wrote: post #211

thoughtstheseus wrote: post #165

Earlier quoted context omitted.

A VAT tax makes a lot of sense. It would reduce the incentive for large market quasi-monopoly seeking companies to optimize for no profits to avoid taxes. The current dynamic is- why pay taxes when you can spend it to expand your market share?

VAT taxes are extraordinarily regressive. Next to lowering taxes on the rich, it's among the worst possible options. Increasing the income tax and taxing capital gains at regular income rates, along with bolstering estate taxes on the rich, are the ideal near-term solutions to the US budget problem. The US still has a lot of slack taxing capacity on the wealthy. That should be maxed out long before we look at a VAT.

What if they're only imposed on corporations?

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

#245

Post by fosk » Mon, Mar 04, 2019, 2:31 AM UTC

As usual, highly inefficient governments trying to expand into every wallet in their sight, in order to keep funding their inefficiency with no accountability.

We need market de-regulation. End of government-sponsored monopolies. Accountability on budget spending. Enablement of profit-oriented policies that generate surpluses. Enabling equal opportunities to people of all social classes, and performance reviews to keep everybody accountable.

Then, and only then, equal and fair taxation that promotes social wellness and stability.

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

#246

Post by stordoff » Mon, Mar 04, 2019, 2:32 AM UTC

sparkie wrote: post #183

infinity0 wrote: post #152

Earlier quoted context omitted.

why are corporations such parasites? benefiting from the citizens in a country like France that are supported by its social services and infrastructure like roads, healthcare, a justice system that prevents the corporation's property from being stolen, but not contributing their fair share of the tax back and even arrogantly denying that they are benefiting from the infrastructure that they are taking advantage of fo…

A corporation is a person, but it's a legal fiction. The corporation is simply a gathering of non fictitious people who come together to collaborate and earn revenue as a collective. Each of those people pays taxes from their salaries like anyone else - they pay their fair share. So what is a tax levied on a corporation? It's simply an additional tax levied on the human people who make up the corporation. They're alr…

> Money the government is taking out of the corporation is money that could potentially be added to your paycheck if the corporation prospers and you play your role.

And ultimately be taxed _anyway_, as the country needs a certain revenue. Taking a percentage out of profits that _might_ be passed down to employees, rather than from people where it definitely has, seems to make sense (especially if those profits are moving out of country so aren't providing any local benefit anyway).

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

#247

Post by jlebar » Mon, Mar 04, 2019, 2:36 AM UTC

fosk wrote: post #245

As usual, highly inefficient governments trying to expand into every wallet in their sight, in order to keep funding their inefficiency with no accountability. We need market de-regulation. End of government-sponsored monopolies. Accountability on budget spending. Enablement of profit-oriented policies that generate surpluses. Enabling equal opportunities to people of all social classes, and performance reviews to ke…

What would you say is an example of a country that -- more or less -- follows these principles?

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

#248

Post by dfilppi » Mon, Mar 04, 2019, 2:46 AM UTC

jsty wrote: post #111

r00fus wrote: post #103

Earlier quoted context omitted.

Wouldn’t it be more accurate to say that it’s correcting an imbalance? Google operates in France but is able to undercut France businesses for digital content sold to French people ( merchandise is traceable ) because it happens to have an Ireland operation?

IIRC, under EU VAT regs Google Ireland will charge and remit French VAT rates to the French treasury for digital content sold to consumers in France, so there's no imbalance there. The big issue is that digital services, particularly advertising, are so insanely profitable that most governments would also like to get their hands on a proportion of the profits accruing from sales of digital services in their country.…

IOW, they see some loot to grab.

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

#249

Post by dsfyu404ed » Mon, Mar 04, 2019, 2:56 AM UTC

jlebar wrote: post #247

fosk wrote: post #245

As usual, highly inefficient governments trying to expand into every wallet in their sight, in order to keep funding their inefficiency with no accountability. We need market de-regulation. End of government-sponsored monopolies. Accountability on budget spending. Enablement of profit-oriented policies that generate surpluses. Enabling equal opportunities to people of all social classes, and performance reviews to ke…

What would you say is an example of a country that -- more or less -- follows these principles?

Different governments do different parts of that well. If there was any government that did it all perfectly we would be saying "we should do things like X" not describing policy in the abstract.

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

#250

Post by JimmyAustin » Mon, Mar 04, 2019, 3:49 AM UTC

ttoinou wrote: post #187

icebraining wrote: post #168

Earlier quoted context omitted.

That incentivizes the creation of vertically-integrated conglomerates over small companies, in order to reduce the number of transactions; is that what you want to foster?

You need to take into account all the simplification it would imply in tax collection / paperwork / regulations etc. The cost of our current ways of taxing wealth and profits is huge

In the US, the IRS collected $3.33 trillion in revenue in 2018, with a total budget of 11.5 billion (2017). Thats 0.3453%, or 35c per $100 of tax revenue. Fairly minor in the scheme of things.