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The public has a right to know how companies that pay no taxes pull it off

larrysummers.com

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Re: The public has a right to know how companies that pay no taxes pull it off

#341

Post by rayiner »

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

Your intuition is incorrect. Almost nobody goes to jail for tax related crimes. The ones that do are folks like Wesley Snipes who just refuse to pay taxes period.

Re: The public has a right to know how companies that pay no taxes pull it off

#342

Post by rayiner »

chewz wrote: post #130
harry8 wrote: post #109

Earlier quoted context omitted.

>this is why it makes sense that companies can walk a fine line on taxes, save tons of money, and you and I cannot. Nope, these are the reasons that cause the situation. This outcome does /not/ make sense nobody sane without a huge vested interest would design a system to achieve less tax paid when you earn more. It's entirely contrary to the intent and spirit of the tax code. This is not sensible. How to fix it? Tha…

> How to fix it? Make a tax code as simple as possible. So simple there is no room for interpretation.

The complexity doesn’t come from the tax code per se. It comes from accounting rules which are reflected in the tax code.

Re: The public has a right to know how companies that pay no taxes pull it off

#343

Post by iguy »

FartyMcFarter wrote: post #211
iguy wrote: post #171

Earlier quoted context omitted.

I know this isn't exactly parallel to the digital service tax, but for the larger debate: The huge obvious revenue tax is VAT. On (almost) anything sold in France they get 20%, and it's very hard to dodge. It does not depend on where you claim your headquarters to be. All these arguments about which country gets to collect a few percent tax, of a few percent profit, are dwarfed by this much larger slice. Which every…

VAT is not a tax on business revenue. Only end-customers pay tax, that's why it's called "value-added" tax.

Well, who pays tax is kind-of a complicated question. VAT is collected at many points along the supply chain (and sales tax typically at just one). But who pays economically depends on a bunch of elasticities: if the consumers will buy X at any price, then the tax lands on them, whereas if they will only pay at maximum Y (otherwise they go without) then the tax lands on the seller. (But in reality, nothing is at either endpoint.)

Re: The public has a right to know how companies that pay no taxes pull it off

#344

Post by gnicholas »

costcopizza wrote: post #220
gnicholas wrote: post #32

Earlier quoted context omitted.

This is a case of economies of scale. A fairly wealthy person could save maybe $50,000 per year with the advice of the smartest tax lawyers and accountants in the world. But it would cost them $500,000 per year to pay for the structure to be created/updated. When I worked as a tax lawyer, we created structures and defended cases that saved our clients hundreds of millions of dollars. At this scale, paying for our ser…

Out of curiosity, what kind of disability tools?

My startup’s tech makes reading on screen easier. It is used by all types of readers, but is especially helpful popular among people with dyslexia, ADHD, vision impairment, and various chronic conditions.

http://www.beelinereader.com

Re: The public has a right to know how companies that pay no taxes pull it off

#345

Post by exabrial »

exabrial wrote: post #254

The problem isn't "who's not paying taxes", the problem is "taxes". In the USA we pay extraordinary taxes for extraordinarily small returns. If the US government was on charity navigator, it would have a no-star rating. This money is best left to the distributed wisdom of thousands of companies in millions of individuals who will look after every dollar and see to it's use rather than waste. When I see headlines like…

Oh the internet is not without irony. On second page of HN today:

https://tunnelingonline.com/why-tunnels-in-the-us-cost-much-...

Re: The public has a right to know how companies that pay no taxes pull it off

#346

Post by Nasrudith »

JoeAltmaier wrote: post #269
sokoloff wrote: post #267

Earlier quoted context omitted.

It's unpopular in some circles to praise Bezos, but during this pandemic, I sure am glad that they had built such an expansive and performant logistics supply chain to help people get the goods they needed without having to go to the (often closed) malls. That's a 2020 benefit to an entire society that arose from 25 years of effort to grow in a sustainable way.

It'd have been little different if there were a dozen of these companies, instead of a near-monopoly?

Is there a single market which has remained with a dozen of those companies which didn't have a cartel or preapportioned monopoly? Just with random variance I would expect three at most still around at the "traditional international size" level even if we started with a dozen Jeff Bezos Clones all told they were the real one with the goal of Amazon given identical starting funds (all too stubborn to merge).

Re: The public has a right to know how companies that pay no taxes pull it off

#347

Post by currymj »

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

they'd let you get away with it, you wouldn't go to prison. i'm pretty sure individuals used to take way more weird writeoffs. but mostly these have been closed over the years for individuals.

the laws are generally enforced the problem is various companies and nations working very hard to make sure that loopholes in the tax code are preserved.

Re: The public has a right to know how companies that pay no taxes pull it off

#348

Post by Nasrudith »

whiddershins wrote: post #116

I don’t fully understand why corporations are taxed in the first place. All the money the corporation takes in ultimately gets spent on operating expenses, or is profit that is then distributed to shareholders who then owe taxes on that income. If it’s annoying and counter intuitive that corporations are in some legal senses considered people, it is even more confusing that they pay taxes. This sets up a crazy situat…

> This sets up a crazy situation where employees of the corporations start lobbying and messing with policy and regulations so it favors the organization.

How is that part crazy? It isn't ideal certainly but the same thing held for farmers, fishermen, and tradesmen back when it was cottage industry. That is fundamentally a result of representative government and them being able to vote. Everybody has interests of some sort.

Re: The public has a right to know how companies that pay no taxes pull it off

#349

Post by disgruntledphd2 »

croon wrote: post #340
a3camero wrote: post #274

Earlier quoted context omitted.

Companies buy a combination of goods and IP (patents and trademarks). The goods come from a developed country and the IP is licensed from a tax haven. The goods are sold at near cost with the markup being in the IP. The result is a supply of goods between countries that causes a significant diversion of the revenue to the tax haven. This is used by most big companies in tech, pharma, etc. The government can’t challen…

Sure, but this was a discussion about taxing revenue produced within a country. What you are describing is avoiding for example profit tax, is it not? I'm still not seeing how it applies to the proposed example.

So, the reason that people want to tax revenue is to negate the benefits of transfer pricing.

For instance, Google France makes 1bn euro in revenue, but purchases Google services from Google Ireland for 999mn, thus almost no profit and thus no tax. Google Ireland make 20bn but pay 19.99bn to Google Bermuda, which is the exclusive licensee of Google IP worldwide (even though the IP is almost exclusively produced in the US).

Taxing revenue means that these shenanigans do not reduce the tax paid in a particular country to zero.

Re: The public has a right to know how companies that pay no taxes pull it off

#350

Post by [deleted] »

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

[deleted]
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