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Spain planning on going ahead with ‘Google tax’ despite US tariff threats

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Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#181

Post by mrep »

the-dude wrote: post #42
bluecalm wrote: post #38

Earlier quoted context omitted.

You have to pay the VAT when you sell to EU even if you don't have presence in EU. Google pays that. The fuss is about some countries wanting more than that.

The customer pays the VAT. Google collects it and returns it to the government.

For ads at least, I'm pretty sure Google and Facebook are effectively paying 100% of that. As far as I know, their ad systems work on a bidding process and common wisdom is to bid the average profitability of a new customer * the conversion rate from those that click on your ad. Thus, as long as your bid wins out (you pay the second highest price) you will make money on each ad click.

This represents a case of perfectly elastic demand. No matter how taxes change, the price the advertiser is going to bid never changes and thus all taxes will be off burdened onto google and facebooks margin until obviously the point where the would lose money and then shut it off but that's unlikely to happen.

khan academy article on elasticity and tax revenue: https://www.khanacademy.org/economics-finance-domain/microec...

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#182

Post by pjc50 »

sbacic wrote: post #165
tim333 wrote: post #141

Earlier quoted context omitted.

There are currently a lot of ways for multinational companies to reduce their tax burden to near zero by for example Microsoft allocating most of their European profits to a DVD stamping plant in Ireland which had a near zero rate at the time. Also they are kind of expected to maximise shareholder value by taking advantage of such legal avoidance schemes. The proper way to stop this is for counties to make anti avoid…

> The proper way to stop this is for counties to make anti avoidance laws. You mean tax evasion, not tax avoidance, right? Last time I checked, avoidance was legal, evasion was not. If you actually did mean tax avoidance, then I must point out how dangerous the idea of somebody arbitrarily deciding what _legal_ option is okay or isn't okay on a case by case basis. I'd much rather have some things reclassified as tax…

No, we really do mean a "general anti-avoidance rule" (GAAR e.g. https://www.gov.uk/government/collections/tax-avoidance-gene...), because otherwise you end up in an endless loop of adjusting the rules against moving targets.

GAARs ultimately boil down to the question of "did you do this rather than a more obvious transaction structure simply to pay less tax", a sort of Occam's razor.

> dangerous the idea of somebody arbitrarily deciding what _legal_ option is okay or isn't okay on a case by case basis.

This happens all the time in precedent-based systems whenever something unclear is litigated. In some sense it's what the legal system is for, and it's the very opposite of arbitrary.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#183

Post by Cytobit »

tyzerdak wrote: post #63

I think taxes is already so high that half of person earnings goes to retards in government. Why do we pay taxes? I know many people that have close to 0 benefits from government. I would propose all governments to make taxes 5% or 10% and remove themselves from governing.

Do those people travel on public roads?

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#184

Post by melenaboija »

sbacic wrote: post #142
melenaboija wrote: post #51

Earlier quoted context omitted.

I agree with you but, what about the USA not being aware of building a strong western economy? Economic politics from USA the last years has been quite protectionist and it seems in the coming future it will have to fight against countries with literally billions of people, so my feeling is western countries better stay together. Is not about fear but working class being tired, among other things, of big corporations…

> Is not about fear but working class being tired, among other things, of big corporations avoiding taxes and they having to maintain the social structure. I should point out that this isn't a universal problem in Europe. For many countries in Europe, a bloated, inefficient and sometimes corrupt government is the reason why tax rates have to be so high and not multinationals avoiding taxes. Sure, taxing those multina…

Agree, that is the why I said among other reasons, and corruption is another one. Is more a general feeling of working class paying the bills.

I am not positioning myself about how European social system works but it seems something has to change, specially after the crisis. Also this is obviously happening in the weakest economies in Europe.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#185

Post by sbacic »

pjc50 wrote: post #182
sbacic wrote: post #165

Earlier quoted context omitted.

> The proper way to stop this is for counties to make anti avoidance laws. You mean tax evasion, not tax avoidance, right? Last time I checked, avoidance was legal, evasion was not. If you actually did mean tax avoidance, then I must point out how dangerous the idea of somebody arbitrarily deciding what _legal_ option is okay or isn't okay on a case by case basis. I'd much rather have some things reclassified as tax…

No, we really do mean a "general anti-avoidance rule" (GAAR e.g. https://www.gov.uk/government/collections/tax-avoidance-gene... ), because otherwise you end up in an endless loop of adjusting the rules against moving targets. GAARs ultimately boil down to the question of "did you do this rather than a more obvious transaction structure simply to pay less tax", a sort of Occam's razor. > dangerous the idea of somebod…

> GAARs ultimately boil down to the question of "did you do this rather than a more obvious transaction structure simply to pay less tax", a sort of Occam's razor.

Okay, so it is a "just trust us" system of deciding who is breaking the law and who isn't. In that case, I'll gladly take multinationals not paying taxes over some government official arbitrarily deciding that I am avoiding taxes and should be punished. Even more so because I live in a country where that same official might be untrained, apathetic or downright corrupt.

> This happens all the time in precedent-based systems whenever something unclear is litigated.

Which, AFAIK, the European system is not.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#186

Post by aglavine »

ixtis7 wrote: post #149
nerdponx wrote: post #75

Earlier quoted context omitted.

Probably worth keeping in mind that Russian, Chinese, and American people are not their governments. I can't speak for Russia and China, but at least in the USA plenty of people detest their government for all the reasons you've mentioned. Even the "good" years with Obama, people are looking back on that era more cynically than they did at the time.

I think this is largely a Western idea. IMO there is no dichotomy of 'evil Chinese government' and 'liberal silent majority of Chinese people'. Yes there are restrictions on what people there can say about the party, but it's not North Korea--people say what they really think in private conversations, and from what I've seen they are mostly happy with their government. Will that change if government performance chang…

Muslim massive concentration camps are Chinese, neither American or North Korea.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#187

Post by balfirevic »

kazagistar wrote: post #138
balfirevic wrote: post #85

Earlier quoted context omitted.

But Google earns it's money from selling ads. If they are selling those ads to business in EU, the mechanics (and taxation) seem to be the same as (for example) a US graphic design company selling logo design services to businesses in EU. What exactly is new here? Is it just the size (and wealth) of Google and similar companies that has encouraged the governments to try to take a larger slice of pie?

Companies are always going to find ways to avoid taxes and privatize more profits to fewer and fewer individuals. It's the responsibility of the government to find those loopholes and get them to pay a fair share to maintain the society they exploit for that profit.

Thanks, but that is barely related to the specifics of my comment and seems ideologically charged to boot.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#188

Post by AnthonyMouse »

tim333 wrote: post #93
seibelj wrote: post #82

IMO the corporate tax rate should be zero, and then everyone would be on the same playing field. Right now the only companies that pay taxes are small ones without the resources and staff to get around it. With 0% corporate tax, all of these games and shenanigans would end. Also, corporate profits are double-taxed anyway, as taxes are paid once on profits then again as dividends / capital gains by the shareholders. T…

Zero corporate tax would lead to a lot of avoidance and drops in government revenue. Say you are a consultant earning 100k a year who owns a house. You could just pay the 100k to your company and borrow against the house for living costs and pay zero tax for the time being.

> Zero corporate tax would lead to a lot of avoidance and drops in government revenue. Say you are a consultant earning 100k a year who owns a house. You could just pay the 100k to your company and borrow against the house for living costs and pay zero tax for the time being.

The issue is that you can already do this by using a corporation incorporated in a jurisdiction with no (or lower) corporate income tax -- which is what international companies and billionaires do and it gives them an unfair advantage, so we should level the playing field.

Meanwhile notice what you're really doing -- you pay no income tax only because you have no income. But that only works as long as you never want to spend the money. Which works great for Apple, because they don't have anything to spend the money on anyway, but they're already doing that.

The consultant making $100K is going to have to choose between spending the money (and so paying the tax on it) or taking a vow of poverty, because you have no equity to borrow against if it wasn't already at some point taxable income, and once you've spent that you still want to eat.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#189

Post by leakybit »

rb808 wrote: post #96
tim333 wrote: post #93

Earlier quoted context omitted.

Zero corporate tax would lead to a lot of avoidance and drops in government revenue. Say you are a consultant earning 100k a year who owns a house. You could just pay the 100k to your company and borrow against the house for living costs and pay zero tax for the time being.

Right but eventually they money has to get from the company to the consultant - either dividends or wages. Either way it'll be taxed.

Only if they needed the cash, or else the corporation would be a vehicle to store wealth.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#190

Post by squiggleblaz »

vector_rotcev wrote: post #106
dustinmoris wrote: post #88

Earlier quoted context omitted.

> The USA behaves like Russia and China, they spy on foreigners, influence their elections, start unjustified wars for oil and generally have a very low regard for freedom and liberty outside of their soil. That perfectly summarises the sentiment I get as a European in Europe, the UK and elsewhere in the world. The US is not different to any other bad actor. In fact the US looks increasingly worse to the rest of the…

I'm curious what you think of European support for/collaboration with the USA vs a more self-interested Europe (not isolationist, just not directly aligned with any of USA/Russia/China)? I haven't heard any clear views on that one way or the other, although I'm not sure the question itself makes perfect sense in terms of actual real world politics.

Europe would need to get an army to do that.
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