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Denmark: No aid for companies which pay out dividends or are reg. in tax havens

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Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#181

Post by 0xff00ffee »

yalogin wrote: post #69

I keep saying over and over but the economic policy is something trump fucked up big time. He gave away the corporate tax breaks in times of prosperity when there was no need and the companies just made bank. He was dealt a great hand, a strong economy that would chug along no matter who the president was. Those are the times to focus on the poor and lift people up. Instead he wasted his opportunity on the tax cuts.…

Similarly: I don't understand the Oregon Kicker: if there is a surplus, it is sent back to the people.

DUH! The point of a surplus is to save for emergencies! Sure, if there is more than, hm, let's use Chase bank: Six months savings, then send the rest back. But running a state with no emergency savings seems asinine, no?

Unless... maybe a state can just go way into debt immediately if they need to in case of emergency? I don't know how this works, but I'll quote Chase bank, when they berated millennials for not having 6 months savings in case of emergency.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#182

Post by barkingcat »

netcan wrote: post #130
flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

What is the positive criteria? Who gets aid, and how is the amount calculated? It's somewhat surprising that foreign company would be eligible at all. Also, I'm skeptical of "common sense rules" being effectively implementable. Company A1 owns intellectual property like trademarks and patents, registered in a tax haven. Company A2 manufactures & markets products in the consumer country. A2 could be paying licence fee…

If you think at all about why a company was registered in a tax haven to begin with, then it's clear that they shouldn't even be in a line to get bailouts from "foreign entities" (from the point of view of the company) at all.

If a company wants to be eligible for benefits inside a country, they have to follow all the laws.

No ifs, buts, ands.

If you feel that the company is "doing good work" why not ask them to be registered in the country to begin with? OR better - move headquarters into the country being discussed (or have that be a condition for receiving bailout funds).

All this said, I think it's up to the government of the Tax Havens themselves to support these companies. These tax havens derive significant benefit from being used in this way. It's time for the tax haven to step up and provide funding for support during this challenging time.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#183

Post by dehrmann »

flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

> Why should tax payers bail out a tax avoiding company?

Tax avoidance also tends to be on profits. A lot of companies in the US have done corporate inversions, but they're still paying local payroll, property, and sales taxes. Freezing dividends and buybacks punishes the people who benefited from the tax avoidance, but you have to be careful not to do this at the expense of workers.

The other argument, and this is from a US perspective, is you're pushing 20% unemployment, why are you wasting your time promoting your political passion project? Spend the money, ask questions later.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#184

Post by flexie »

caseysoftware wrote: post #173
flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

> The government should take a small ownership stake in companies that receive that kind of money. I'm only familiar with US law, not Danish so question for you here. Under US law, when a company closes (bankruptcy, acquired, etc), the common shareholders are last in line for payments after debt holders and preferred shareholders. Does Danish law have a similar provision? If so, wouldn't being a debtor be a stronger…

Yes, if we look at the bankruptcy scenario only (and provided the debt is not secured). But the shareholder is typically better off if there is an upside. What we saw in the last financial crisis is that large corporations quickly paid off their loans and the government - the taxpayers - missed out on the upside.

The natural way to give government ownership would be through convertibles so they could chose whether to convert.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#185

Post by Mikeb85 »

wsc981 wrote: post #107
tonyedgecombe wrote: post #79

Earlier quoted context omitted.

Companies that pay dividends What’s the point of a company that never pays a dividend.

The stock value can still rise. Apple didn't pay dividends for a large part of its existence, yet especially after the year 2000 it would have been a great stock to own. > Apple's long stretch of not paying any dividends reflected Jobs' opposition to them. During Jobs' second tenure at Apple from 1997 to 2012, the tech giant didn't pay a single dividend, even as its cash hoard ballooned to over $50 billion in 2011. "…

Literally the point of markets is for companies to eventually pay back investors. A market without buybacks or dividends is a ponzi scheme.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#186

Post by gruez »

bigfudge wrote: post #136
bzbarsky wrote: post #63

Earlier quoted context omitted.

Almost no one keeps 12 months of cash reserves. Apple, with is famous cash hoard, is around that mark.... I can't think of other large companies offhand that are.

Perhaps this should be a cost of doing business in the future? We all pay for this anyway, so why should taxpayers face all the risk and none of the reward.

>so why should taxpayers face all the risk and none of the reward.

Simple, bail the companies out (thus saving all the jobs), but wipe out (or significantly dilute) existing shareholders.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#187

Post by arethuza »

d0100 wrote: post #124
flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

> The government should take a small ownership stake in companies that receive that kind of money. This sounds absolutely reasonable. Bail them out by being some sort of "angel investor" and get a piece of the company

That's what the UK government did with some of the banks here in 2008 - although in the case of RBS, HMG ended up with a 58% stake.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#188

Post by LatteLazy »

Leaving aside the misleading title...

I hate crappy poorly thought out measures like this.

Is this a loan? If so, no dividends should be paid (or buybacks offered) until it's repaid. Otherwise companies just need to hold fire for 18m and it's free money!?

And if it is a loan, there should be interest and compulsory payments after (say) 6 months. Otherwise you're bailing out companies that SHOULD go bankrupt and penalizing ones that don't.

This is like when my country (the UK) bailed out banks. We got equity in exchange (smart). Then we decided to ban bonuses because politics. So we got sued and lost and had to pay them and legal costs. Then we said no more bonuses, so the good bankers, the ones that made a profit and who were not involved in the BS mortgage crap all moved to private banks. And we were left with hollow shells of companies we'd paid a fortune for.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#189

Post by throwawaysea »

Isn't paying out a dividend similar to just paying employees and those who should rightfully earn an income from any enterprise? I understand the need for meaningful checks and controls here, but why would this be singled out?

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#190

Post by dev_tty01 »

barkingcat wrote: post #182
netcan wrote: post #130

Earlier quoted context omitted.

What is the positive criteria? Who gets aid, and how is the amount calculated? It's somewhat surprising that foreign company would be eligible at all. Also, I'm skeptical of "common sense rules" being effectively implementable. Company A1 owns intellectual property like trademarks and patents, registered in a tax haven. Company A2 manufactures & markets products in the consumer country. A2 could be paying licence fee…

If you think at all about why a company was registered in a tax haven to begin with, then it's clear that they shouldn't even be in a line to get bailouts from "foreign entities" (from the point of view of the company) at all. If a company wants to be eligible for benefits inside a country, they have to follow all the laws. No ifs, buts, ands. If you feel that the company is "doing good work" why not ask them to be r…

>>If a company wants to be eligible for benefits inside a country, they have to follow all the laws.

Minimizing tax liability is not necessarily doing anything outside the law.

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