Yellen calls for global minimum corporate tax rate • Hacker News Board

Re: Yellen calls for global minimum corporate tax rate

#21

Post by newacct583 » Mon, Apr 05, 2021, 5:49 PM UTC

TechBro8615 wrote: post #13

That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.

You're confused about the incentives here, I think. Traditionally the conflict in this space has been smaller nations wanting to tax economic activity within their borders (by larger multinational corporations) and being prevented from doing so by coercive foreign policy. You really think that Ecuador or wherever wouldn't like a bigger cut of the oil they're shipping out?

The news here is that US policy seems to be moving to align with smaller powers, not the reverse.

Re: Yellen calls for global minimum corporate tax rate

#22

Post by mc32 » Mon, Apr 05, 2021, 5:49 PM UTC

TechBro8615 wrote: post #13

That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.

But it’s not global it’s whoever the allies are, which I guess is OECD and co. They’re just trying to avoid having companies move (tax jurisdiction shopping) and do reverse mergers to shirk tax responsibilities, etc.

I presume it would be via some convention which allows tit for tat reciprocity and so on.

Re: Yellen calls for global minimum corporate tax rate

#23

Post by woot482 » Mon, Apr 05, 2021, 5:49 PM UTC

macrael wrote: post #15

woot482 wrote: post #10

My theory is that inequality is simply the result of globalization and it's not necessarily a bad thing. If you had build the most successful retail business, in 1900 you would own the market in your town; in 1950 in your country; in 2020 you'd own the world (or a big part of it). The opportunity is just a lot bigger now than 50 years ago and that trickles down. Also technology enables goods and services to be produc…

You might enjoy https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

I know the book and it's an interesting theory. I guess most of the 'rich' people I know / know of are entrepreneurs and they didn't get rich from capital returns but by building a company that created an unthinkable amount of value and also many jobs and success for a lot of people.

In my mind also, the best antidote to that is not taxes but anti-trust (make sure companies don't unfairly stay dominant) and low interest rates (which has been the case for a while) so that people without capital can borrow at reasonable cost.

Taxing a company doesn't make it less dominant. it can be argued that it makes it more dominant because the cost to compete with the dominant company will be higher if corp taxes are higher.

Re: Yellen calls for global minimum corporate tax rate

#24

Post by TechBro8615 » Mon, Apr 05, 2021, 5:49 PM UTC

mvzvm wrote: post #16

TechBro8615 wrote: post #13

That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.

This is a wild misunderstanding of how the world actually works. Welcome to Realpolitik.

So Janet Yellen should have the right to tell Panama what its tax rate should be? Or China, or Russia? Good luck with that.

Re: Yellen calls for global minimum corporate tax rate

#25

Post by ineptech » Mon, Apr 05, 2021, 5:49 PM UTC

TechBro8615 wrote: post #13

That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.

I think you're missing the point here.

> "We're working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom."

The race to the bottom Yellen refers to is corporations playing one country off another, as in "lower your taxes or we'll move our profits to Ireland." The proposed solution - countries agreeing with each other not to lower the corporate tax rate below some limit - is an example of sovereign nations working together in a way that benefits both sides, not one sovereign nation dictating policy to another.

Re: Yellen calls for global minimum corporate tax rate

#26

Post by TechBro8615 » Mon, Apr 05, 2021, 5:50 PM UTC

newacct583 wrote: post #21

TechBro8615 wrote: post #13

That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.

You're confused about the incentives here, I think. Traditionally the conflict in this space has been smaller nations wanting to tax economic activity within their borders (by larger multinational corporations) and being prevented from doing so by coercive foreign policy. You really think that Ecuador or wherever wouldn't like a bigger cut of the oil they're shipping out? The news here is that US policy seems to be m…

No... countries like Ireland explicitly set lower tax rates to attract companies to open HQ there. You think Apple has an HQ in Ireland just because they like the whiskey?

Re: Yellen calls for global minimum corporate tax rate

#27

Post by [deleted] » Mon, Apr 05, 2021, 5:53 PM UTC

ghgdynb1 wrote: post #14

scsilver wrote: post #9

Earlier quoted context omitted.

Can these small countries who offer the low rates stand up the US sanctions and tarrifs apparatus. The US has alot of strings to pull to make these tax havens cooperate. Thats a nice export industry you have there, would be a shame if something were to happen to it wink nudge.

The point is that effective tax rates can be really subtle. For instance, you could have a country change what it considers to be “profit” so that you’re paying $2 on $100 of revenue, whereas in the neighboring country you’d be paying $6. Same nominal tax rate, different effective tax rates. There are even more ways to play this: “Sure, we tax you at the required 20%, but you can then direct how those funds are used…

[deleted]

Re: Yellen calls for global minimum corporate tax rate

#28

Post by newacct583 » Mon, Apr 05, 2021, 5:53 PM UTC

TechBro8615 wrote: post #26

newacct583 wrote: post #21

Earlier quoted context omitted.

You're confused about the incentives here, I think. Traditionally the conflict in this space has been smaller nations wanting to tax economic activity within their borders (by larger multinational corporations) and being prevented from doing so by coercive foreign policy. You really think that Ecuador or wherever wouldn't like a bigger cut of the oil they're shipping out? The news here is that US policy seems to be m…

No... countries like Ireland explicitly set lower tax rates to attract companies to open HQ there. You think Apple has an HQ in Ireland just because they like the whiskey?

You are imagining that Yellen is going to able to coerce a EU nation to raise taxes? How would that work?

Re: Yellen calls for global minimum corporate tax rate

#29

Post by rcMgD2BwE72F » Mon, Apr 05, 2021, 5:54 PM UTC

TechBro8615 wrote: post #13

That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.

So it is fair that one tiny country sets a near-zero capital tax, and enjoy free trade of food and services with all the big countries around it. Any corporation would move to the tiny country, of course, where nothing happens except tax and accounting.

How fair.

Re: Yellen calls for global minimum corporate tax rate

#30

Post by dnautics » Mon, Apr 05, 2021, 5:55 PM UTC

nonameiguess wrote: post #20

We need a global maximum, of 0%. I don't want to sound like some kind of hardcore Austrian fundamentalist, because I'm not. Taxes are fine, but levying them on fictitious non-person entities is just a means of obscuring to voters where the tax burden ultimately lies. All taxes are paid by individuals, either directly, or by corporations raising or lowering the prices they charge and prices they pay, to suppliers, emp…

I'm kind of the opposite. We should have 0% personal income tax and a minimum corporate income tax.

A personal income tax incentivises the state to surveil the economic activity of individuals and play games with nudging people to do X or Y, and puts the burden of tax filing and the consequences of not reporting (which some people just can't do correctly).

Contrariwise, a corporate income tax can be thought of as a "user fee" for the privilege of the corporate veil and limited liability. If you don't want your mom and pop shop to pay corporate income tax, simple: don't incorporate, and be responsible for your personally responsible for your employees' well being. And thus it becomes a driver of small business growth and a progressive taxation (the beneficiaries of bigcorp profits are going to be disproportionately wealthy). If you can't afford an accountant to keep track of what taxes you owe, don't incorporate. Etc.