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

Re: Yellen calls for global minimum corporate tax rate

#31

Post by scsilver » Mon, Apr 05, 2021, 5:55 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…

Thanks for the insight, what would be the danger of the happy path solution where these effective vs nominal rates arent factored in. Some countries have a huge advantage in certain industries?

Re: Yellen calls for global minimum corporate tax rate

#32

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

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…

This is how imperialism works.

> 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.

In 1900, thousands would own the markets in their respective towns, in 1950 dozens would own the the markets in their countries, and in 2020 one person would own the entire market. This is not trickling down, this is flooding up.

It's no different than being the big man in your small island culture before the British navy rolls in. If there are no protections in place to preserve you, you will disappear and the Empire will expand.

Re: Yellen calls for global minimum corporate tax rate

#33

Post by TechBro8615 » Mon, Apr 05, 2021, 5:55 PM UTC

newacct583 wrote: post #28

TechBro8615 wrote: post #26

Earlier quoted context omitted.

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?

I'm not imagining it, but she seems to be.

Re: Yellen calls for global minimum corporate tax rate

#34

Post by rcMgD2BwE72F » Mon, Apr 05, 2021, 5:56 PM UTC

TechBro8615 wrote: post #24

mvzvm wrote: post #16

Earlier quoted context omitted.

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.

Yes, as long as Panama wants to continue doing business with the US. Guess what, most companies that are incorporated in a tax heaven do nothing there except tax and accounting, so they will pressure Panama to agree to the US' demands so they can keep enjoying their privileges.

Re: Yellen calls for global minimum corporate tax rate

#35

Post by jokoon » Mon, Apr 05, 2021, 5:57 PM UTC

I believe that the pandemic will make world politics lean to the left. It's inevitable. Such a gigantic crisis will force society into mutual help, and will make it harder for values like independence and individualism to really thrive and endure. No man is an island. It's true that trade and entrepreneurship are a form of mutual help, but competition bring the worse, and it becomes the economy of the survival of the fittest.

When governments inject money into private banks, it's impossible to deny that capitalism doesn't work without state intervention. Capitalism has been dying since 2008. In my view it started dying after the end of the cold war. An ideology without rival slowly becomes irrelevant because it's unchallenged.

Re: Yellen calls for global minimum corporate tax rate

#36

Post by klmadfejno » Mon, Apr 05, 2021, 5:57 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've never seen this proposal before. I'm curious what the consensus is that leads to it being downvoted so. I'm inclined to think this is a bad idea, but I'm not confident.

My guess is you'd see a small portion go to employees, a large chunk reinvested into the business, and a large chunk go directly to shareholders. If you managed to alter the structure of taxes so that shareholders paid more for capital gains and dividend income, I feel that's a better outcome than corporate taxes. But lingering doubts of the feasibility of doing so + companies just hoarding cash seem like large problems.

Re: Yellen calls for global minimum corporate tax rate

#37

Post by aeternum » Mon, Apr 05, 2021, 5:59 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...

Interesting, I think there is some truth to this. Making more from investments than you make at a day job is pretty demotivating.

Wouldn't raising the corporate tax rate further reduce economic growth though, making things worse instead of better?

Re: Yellen calls for global minimum corporate tax rate

#38

Post by godelski » Mon, Apr 05, 2021, 5:59 PM UTC

tootie wrote: post #19

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…

Inequality is simply inherent to capitalism. The free flow of capital, goods and labor will always see concentration happening. The issue is that it should be very possible to eliminate true poverty with reasonable redistribution policy. Capitalism (and Industrialization) have gotten us tantalizing close to a post-scarcity economy. We still need the last 1/3 or so of the world to get on the trolley while addressing o…

It sounds like you're just saying "pareto happens in any resource allocation scheme" which isn't specifically inherit to capitalism and is kinda just what happens when people have resources. I'm not convinced that people can live without resources. Sure, there are concerns when the distribution becomes too long tailed, but what you're describing is inherit to any system (we haven't seen a system where this hasn't happened). Stop creating a boogieman, let's have a good faith conversation instead.

Re: Yellen calls for global minimum corporate tax rate

#39

Post by pessimizer » Mon, Apr 05, 2021, 5:59 PM UTC

TechBro8615 wrote: post #24

mvzvm wrote: post #16

Earlier quoted context omitted.

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.

It's not about rights, it's about ability. If Panama wants to trade with the US or it's vassals, it will do what the US says. China doesn't have to listen to the US, if Panama wants to defy Yellen, it can deal with China - although China may not see Panama as worth it, I don't think that tax breaks are an export that China is desperate for.

edit: think of it like this - you have the "right" to eat meat. But if I refuse to be friends with people who eat meat and you need my friendship, you can't eat meat.

Re: Yellen calls for global minimum corporate tax rate

#40

Post by jurassic » Mon, Apr 05, 2021, 6:00 PM UTC

I don't see any reason why the Irelands of the world would be amenable to the idea of a minimum corporate tax rate. There are huge economic benefits to be had by luring US and UK companies with favorable tax treatment. Yellen's fantasy about getting every country to apply the same high tax rate against their interests is not helping the US's global competitiveness.

In business, if you find yourself in a "race to the bottom" on price it typically means your product has become a commodity. The antidote to commodification is strong branding. Instead of trying to collude on tax rates like some kind of financial mafioso, somebody in Washington needs to figure out how to rescue the brand of the United States in order to reverse this trend.