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Czech Republic proposes the highest digital tax rate in Europe

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Re: Czech Republic proposes the highest digital tax rate in Europe

#71

Post by chungleong »

sokoloff wrote: post #23
protomyth wrote: post #20

Intermediary platforms such as Airbnb and Uber exacerbate cities’ housing problems and weaken worker protections. Its interesting that this line has no support and just treated as fact for this article. Is there a source to explain the reasoning?

Full time AirBnB rentals almost certainly exacerbate any housing shortages that might exist. A tourist in general is willing to pay far more (maybe 5-10x) per night of temporary lodging than a resident is willing/able to pay for 365 days per year. This is especially true in beautiful but inexpensive, tourist magnet cities like Prague, Vienna, Budapest, and the like. Taking otherwise available rentals off the full-tim…

AirBnb also makes real estate investments more liquid. You can sell a property on short notice. No need to wait for tenants to move out. That drives speculation and influx of foreign capital.

Re: Czech Republic proposes the highest digital tax rate in Europe

#72

Post by JumpCrisscross »

sasasassy wrote: post #62
evanriley wrote: post #61

Earlier quoted context omitted.

Surely there is a balance between overly taxing and letting them get away without paying them?

I'm guessing a 2-7% tax is on the low side of such balance.

> 2-7% tax is on the low side of such balance

A 7% tax on revenues is a 50% tax on a business with a 14% margin. It's even more damaging when one considers start-ups, who run negative profits in their early years. (Seven percent is thus eleven months of runway in the Czech Republic for every 12 months a German competitor gets.)

Seven percent is generally prohibitive to low-gross margin business, e.g. any tech company producing physical devices or doing anything next to retail. It thus compresses an economy's accessible tech sector to enterprise businesses.

If these taxes remain confined to ad-driven businesses, that's a fair tradeoff. But given Europe's penchant for over-encroachment, it could very easily be over-applied.

TL; DR Top-line taxes transfer wealth to high-margin businesses over low-margin businesses and from start-ups to incumbents.

Re: Czech Republic proposes the highest digital tax rate in Europe

#73

Post by nerdponx »

Shivetya wrote: post #50
protomyth wrote: post #20

Intermediary platforms such as Airbnb and Uber exacerbate cities’ housing problems and weaken worker protections. Its interesting that this line has no support and just treated as fact for this article. Is there a source to explain the reasoning?

the uber one is certainly a lie. the simple fact is these companies have money, can very easily be portrayed as the bogeyman, bonus points because they are not companies to country that will tax them, and simply because most of the populace won't care because its not them. talk to any of the uber drivers where I work, so take it as you will, and many will tell you of passengers who use uber/lyft because the drivers a…

There are plenty of articles and literature (including here on HN) to support the hypothesis that "gig economy" jobs subvert worker protections.

Re: Czech Republic proposes the highest digital tax rate in Europe

#74

Post by microcolonel »

sasasassy wrote: post #62
evanriley wrote: post #61

Earlier quoted context omitted.

Surely there is a balance between overly taxing and letting them get away without paying them?

I'm guessing a 2-7% tax is on the low side of such balance.

The tax is on revenue, so the thinner your margins, the more extreme the tax. Another reply here says that a 7% revenue tax is a 50% tax on a 14% margin transaction, but it's even worse than that, since the tax is on the whole revenue, including your margins.

Re: Czech Republic proposes the highest digital tax rate in Europe

#75

Post by microcolonel »

muckrakerz wrote: post #33

Once again the former eastern block is implementing smart reforms that are pro-market and anti-globalist.

How is prejudicially taking money directly out of the market "pro-market"? Anti-globalist I'd maybe grant, but since the tax is universal, I think it's pretty globalist as well.

Re: Czech Republic proposes the highest digital tax rate in Europe

#76

Post by save_ferris »

protomyth wrote: post #20

Intermediary platforms such as Airbnb and Uber exacerbate cities’ housing problems and weaken worker protections. Its interesting that this line has no support and just treated as fact for this article. Is there a source to explain the reasoning?

The New Yorker had an interesting piece on the effect that Airbnb had in Barcelona[0] recently.

tldr: residential population in the more attractive parts of town have decreased as much as 45% in the last 12 years. Activists staged protests of illegal Airbnb's by renting them, occupying them, and refusing to leave, all while filming their interactions.

0: https://www.newyorker.com/magazine/2019/04/29/the-airbnb-inv...

Re: Czech Republic proposes the highest digital tax rate in Europe

#77

Post by microcolonel »

mc32 wrote: post #54
gok wrote: post #53

Earlier quoted context omitted.

The pricing out of existing residents isn't caused (much) by local taxes either.

So if AB&B are reducing the supply of housing to locals who don’t own, then this tax could be used to build or subsidize housing costs for those who because of the reduced inventory and commensurate price increase can’t afford the housing they were once able to.

AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly normally (AirBnB or no).

The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as they should perhaps be allowed to be, so they do not put any pressure on politicians to stop this gambit.

Re: Czech Republic proposes the highest digital tax rate in Europe

#78

Post by pkaye »

AlexTWithBeard wrote: post #16
gok wrote: post #12

Earlier quoted context omitted.

What? Corporations absolutely have an AMT.

Hmm... Looks like you're right. How do they manage to pay zero taxes then? I thought AMT assumes that once you're beyond a certain level of income, your lose most deductions and essentially pay a certain percent of the income.

Through subsidiary companies and assigning IP rights, they move their income to a low tax country like Ireland. Its kind of like movie studio accounting. Take Ikea for example. It doesn't make much money because all the profits are sent to a charity that owns the Ikea name.

Re: Czech Republic proposes the highest digital tax rate in Europe

#79

Post by peteretep »

pjc50 wrote: post #26
ShorsHammer wrote: post #25

Earlier quoted context omitted.

Airbnb is highlighting a zoning problem that governments are unwilling to admit to themselves. Sublets and short term rentals existed long before before and most cities on Earth didn't care, but once a frictionless platform came along it suddenly was a problem. My landlord kicked us out to run an airbnb fulltime after seeing how much a neighbour was earning. (Around New Years /Christmas you could easily bring in 2 mo…

People say "zoning problem", but should we really solve the problem that 1 in 6 residences in Edinburgh is an airbnb by building skyscrapers in a World Heritage Site? I suppose it would repel the tourists.

Skyscrapers on the royal mile? No. Sky scrapers in shitty nearby suburbs? Absolutely. In London, the whole Isle of Dogs is being slowly eaten up by high rises, and nothing of value will be lost.

Re: Czech Republic proposes the highest digital tax rate in Europe

#80

Post by tmefq »

megous wrote: post #68
bitL wrote: post #51

Earlier quoted context omitted.

I've heard that in Prague due to explosion of AirBnB rentals it's difficult even for software developers to rent reasonably priced apartments. I guess this is a counter reaction meant for a city that hosts >10% of country's population.

The rise in prices for new rentals is real. ~70-100% over last few years. How much of that is caused by AirBnB is debatable.

Not sure about the situation in Czechia but in Spain (where I live) I'd say most of it is caused by the fact that jobs have moved to the big cities to the point where there's nothing left to do in small/mid-sized towns. Personally I blame shopping centres (which have destroyed most small stores in every town they've settled in, and don't require as many active people) and cheap production in Eastern Europe and China (which has destroyed the secondary sector).
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