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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

#411

Post by neycoda »

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.

LOL the simpler tax code or laws are, the more open they are to interpretation. You've got things backwards here.

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

#412

Post by robertlagrant »

LudwigNagasena wrote: post #406
robertlagrant wrote: post #358

Earlier quoted context omitted.

The base problem being that tax law is gameable. That's what the article and comments are about.

My reply was inside a thread on direct subsidies. I still don’t understand what’s your problem.

I don't have a problem, but if you're phrasing things like that then perhaps you're seeing an exchange like this as the equivalent to squaring up outside a pub. Disengaging.

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

#413

Post by apta »

apexalpha wrote: post #160
chewz wrote: post #130

Earlier quoted context omitted.

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

Or do like Europe is finally starting: just tax revenue. They can suppress their 'profit' whichever way they want, they can't suppress their revenue in a given country. The digital services tax is imposed at a rate of 3% on the gross revenues derived from digital activities of which French “users” are deemed to play a major role in value creation. The law not only affects digital companies but, more generally, digita…

And end up with a situation where you can owe taxes and be in the negative even without making profit? No thanks.

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

#414

Post by Spearchucker »

MereInterest wrote: post #321
Spearchucker wrote: post #110

Earlier quoted context omitted.

Somewhat oversimplified, you don't need a herd of corporations to do this - simply sell your house to a trust fund of which you or someone you trust is the primary beneficiary. In Jersey, Luxembourg or the like. You pay a lawyer who already does this for many funds to administer yours. You then either rent the house from the trust for a minimal amount, or the trust lets you stay there rent-free as a guest. This is al…

I was under the impression that living somewhere rent-free, or renting at under the market rate for a typical location, was still taxable income that needed to be declared.

Not in any country I've lived, but I imagine there'll be inevitable outliers. Rent is rent though, no? I'd love to know which country penalises you for finding a place to live with low rent...

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

#415

Post by CaptainMarvel »

DebtDeflation wrote: post #182
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…

>I don’t fully understand why corporations are taxed in the first place. Because as economically inefficient as a corporate income tax is, without it you would create an enormous incentive for individuals to incorporate, filter all their income through the corporation, have the corporation pay all their expenses as business expenses, purchase their assets for them as business assets, and compensate them in the form o…

The UK has laws that prevent all of these things AND still has corporation tax.

Expensing anything is difficult as it must be solely for the business purposes and not personal use.

For example, you cannot generally expense food, clothes, housing, education etc. (You can probably expense an insignificant part of that though under some circumstances.) It’s not possible to take loans for extended periods of time without them actually counting as income for individuals (and being subject to income tax).

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

#416

Post by mhaymo »

harry8 wrote: post #398
mhaymo wrote: post #147

Earlier quoted context omitted.

There are legitimate reasons for a valuable company to make little to no profits. Namely re-investment in growth. Your proposal would make it impossible for businesses to spend todays profits on growth for tomorrow, and would thereby dramatically slow economic growth.

This is actually incorrect. Investment is not tax deductable. Invest all your salary in an S&P500 index fund as a tax deduction? Business expenses are tax deductable. Investment is not. Yes I'm completely aware that this is one of Amazon's stated defences for tax dodging. Tax dodging is their core competency. I hate that.

No you're incorrect, and drawing a false distinction between spending company money on growth instead of profits, and other business expenses. There is no distinction for tax purposes, nor should there be.

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

#417

Post by b20000 »

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…

Anyone can learn how accounting and taxes work and anyone can set up a company wherever they want in the world. IMHO a lot of these "they don't pay any taxes" statements come from not understanding how accounting and taxes work. There is nothing illegal about setting up a company to manage your IP and license it to your other companies and I don't see what's wrong with that, sorry.

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

#418

Post by disgruntledphd2 »

croon wrote: post #404
disgruntledphd2 wrote: post #349

Earlier quoted context omitted.

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 th…

Right, and I know you're not GP, but isn't that exactly what I said? That they would pay French taxes on that €1bn, and the French wouldn't care what they did after that.

Yeah, but it seemed that someone else in the thread didn't get it, so I explained with an example.

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

#419

Post by Ntrails »

silexia wrote: post #408
TheKarateKid wrote: post #372

Earlier quoted context omitted.

I don't think so. I interpreted the comment the same way probably because the comment was replying to one disputing the morality of it, not the feasibility of it.

What would happen if we did away with the income tax, sales tax, estate tax, property tax, and all other taxes? The government could simply finance itself by printing money / inflation. Let’s say the government total expenditures were 5% of GDP each year, then you would simply have 5% inflation. This would solve all the problems we have with income inequality, worthless heirs of the wealthy hoarding riches, and of ve…

Why would anyone invest in your currency? Why would anyone hold your currency? What would your interest rates be? What would that do to businesses making decisions on borrowing for CapEx etc etc.

I've said that paying for CoronaVirus will probaby be done by inflation rather than taxes, but I'm not sure that as the only source of revenue it makes any sense

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

#420

Post by dwighttk »

Firadeoclus wrote: post #175
dwighttk wrote: post #152

Earlier quoted context omitted.

It is more efficient to let people keep money than it is to take it from them and give it back. Even if the laws that allow the former would (/might) be simpler.

I don't think we can take that as a given. Moving money has its overheads, of course, but so does every added complexity in law.

Ok let’s do away with withholding then. Instead of just letting the government keep the money we will all take it from the government and give it back at one time on tax day. Much simpler.
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