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

Re: Yellen calls for global minimum corporate tax rate

#41

Post by woot482 » Mon, Apr 05, 2021, 6:01 PM UTC

pessimizer wrote: post #32

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…

If you believe that, then your answer is anti-trust -- not taxes. You also need to cut all red tape for small businesses which right now are enormous especially in places like NYC (property taxes alone are a travesty).

All taxes do is make the government a business partner of the 'imperialist' entrepreneur. It won't bring back the small town businesses or anything else about the past that you idealize.

Re: Yellen calls for global minimum corporate tax rate

#42

Post by elliekelly » Mon, Apr 05, 2021, 6:04 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…

> Inequality is simply inherent to capitalism.

I can’t say for certain whether or not this is true but I really don’t think it is. The entire premise of capitalism is that we’re all better off through specialization and trade. It’s the _very_first_thing Adam Smith writes in The Wealth of Nations.

We use the word “inequality” a lot at the moment but I think, in some ways, it’s a bit of a misnomer because the true issue the term “inequality” attempts to describe is that people aren’t getting the “better off” end of the deal that capitalism promises. For a lot of people participating in capitalism there isn’t any action in their set of available actions where they’re economically better off than they were before.

Re: Yellen calls for global minimum corporate tax rate

#43

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

woot482 wrote: post #41

pessimizer wrote: post #32

Earlier quoted context omitted.

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…

If you believe that, then your answer is anti-trust -- not taxes. You also need to cut all red tape for small businesses which right now are enormous especially in places like NYC (property taxes alone are a travesty). All taxes do is make the government a business partner of the 'imperialist' entrepreneur. It won't bring back the small town businesses or anything else about the past that you idealize.

What about progressive taxation: taxing larger companies more?

Re: Yellen calls for global minimum corporate tax rate

#44

Post by throwaway-8c93 » Mon, Apr 05, 2021, 6:06 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.

Panama has full right to set its own tax rates. Developed countries have full right to deny Panama's corporations from entering their markets, and even forbid their own corporations from dealing with their Panama counterparts.

Or, more realistically, the developed countries will pull any of the dozens of levers to make non-cooperative countries' life miserable.

Re: Yellen calls for global minimum corporate tax rate

#45

Post by partiallypro » Mon, Apr 05, 2021, 6:06 PM UTC

This will never happen.

Re: Yellen calls for global minimum corporate tax rate

#46

Post by partiallypro » Mon, Apr 05, 2021, 6:07 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 am for 0% corporate rates as well, I personally think we should just raise the taxes on higher earners and rethink cap gains for people that sell large amounts of assets, but cut corporate taxes to 0%.

Re: Yellen calls for global minimum corporate tax rate

#47

Post by ghgdynb1 » Mon, Apr 05, 2021, 6:08 PM UTC

scsilver wrote: post #31

ghgdynb1 wrote: post #14

Earlier quoted context omitted.

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?

Happy you found it helpful! The final section (imposters) of this [1] simplified exploration of “green beard altruism” might be of interest to you if you want to explore this further. If you’re interested in thinking about things like this generally, these are Nash equilibrium problems and the field is called game theory.

In answer: if we do discard the assumptions of game theory and we imagine nobody would ever think to “cheat,” it could work. But in reality it wouldn’t be just that some countries have huge advantages in some industries— they would have huge advantages in every industry. People and companies looking to maximize their opportunities would flee to the country with the lowest effective (nominal doesn’t matter) tax rate which could also guarantee their safety.

This is actually part of how the US ended up burying the Soviet Union/eastern Bloc with economic productivity— we kept poaching all their best engineers, scientists, mathematicians, and entrepreneurs.

[1] https://m.youtube.com/watch?v=goePYJ74Ydg

Re: Yellen calls for global minimum corporate tax rate

#48

Post by partiallypro » Mon, Apr 05, 2021, 6:10 PM UTC

dnautics wrote: post #30

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 "…

Your proposal would actually punish mom and pop stores in aggregate. Limited liability is incredibly important to business operation.

Re: Yellen calls for global minimum corporate tax rate

#49

Post by knubie » Mon, Apr 05, 2021, 6:11 PM UTC

klmadfejno wrote: post #36

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…

There has been consensus among economists for awhile that the corporate tax should be eliminated. https://www.npr.org/sections/money/2012/07/19/157047211/six-...

Re: Yellen calls for global minimum corporate tax rate

#50

Post by unethical_ban » Mon, Apr 05, 2021, 6:11 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…

An interesting thought exercise, but you use the term "supplier" as if it isn't itself a business.

And while I see what you're trying to get at, I think the idea is flawed. Taxed being "open and transparent" are good attributes, but not the reason, for taxes to exist. They exist to fund society.

Corporations and businesses, as entities, utilize public services. They wear roads, they take up land, they pollute. They should be expected to pay their portion of the upkeep to their local area.

I understand the idea of reducing the race to the bottom and city/country gamesmanship for tax evasion... which is what the linked proposal looks to solve AFAIK.