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Janet Yellen to call for global minimum corporate tax rate of 21%

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Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#121

Post by cuchoi »

m101 wrote: post #119

Corporate taxes are the most blindingly stupid idea ever. People forget that the only way to level the playing field between Amazon and local shops is to cut taxes to 0 rather than layering on increasingly complex tax rules. Amazon thrives in the presence of corporate taxes. Corporate taxes also create huge incentive to offshore jobs to tax havens. Not to mention no corporate tax rates would mean no need for all sort…

> Corporate taxes also create huge incentive to offshore jobs to tax havens

That's why Yellen is proposing a global minimum corporate tax.

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#122

Post by jkingsbery »

I'd be curious to know more details about the proposals. It seems hard to look at corporate taxes in isolation from other things corporations do and the other taxes that people pay. Some countries choose to provide fewer government services, or are able to provide government services for less money. It seems only fair that these countries would have lower corporate tax rates. Corporate tax rates also seem like they would be affected by what the capital gains tax is: the government can get money out of a group of people by either taxing the company they own or by taxing the capital gains they realize when their company does well. It also does matter what kind of other taxes a company will need to pay (payroll taxes), or what other taxes citizens pay (whether or not they pay VAT).

It's hard to imagine a global minimum corporate tax rate not being exploited by special interests. Just because companies avoid taxes today by switching countries, won't mean that they won't find other loop holes tomorrow. It's easy to imagine countries saying "sure, our nominal corporate tax rate is 21%, but has to have a different rate because of .

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#123

Post by gruez »

yboris wrote: post #113
fastball wrote: post #104

Earlier quoted context omitted.

How is Delaware a tax haven?

https://www.theatlantic.com/business/archive/2016/10/dont-bl... > Delaware doesn’t tax “intangible assets,” and this encourages companies to move parts of their business to Delaware to avoid taxes in other states. This has led to Delaware being labeled a “tax haven.” See also: https://www.investopedia.com/articles/personal-finance/09251...

I don't get it. I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#124

Post by logifail »

gruez wrote: post #123
yboris wrote: post #113

Earlier quoted context omitted.

https://www.theatlantic.com/business/archive/2016/10/dont-bl... > Delaware doesn’t tax “intangible assets,” and this encourages companies to move parts of their business to Delaware to avoid taxes in other states. This has led to Delaware being labeled a “tax haven.” See also: https://www.investopedia.com/articles/personal-finance/09251...

I don't get it. I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?

> I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?

Company transfers intangible asset to subsidiary in Delaware, "trademark or naming rights"[0], its locations elsewhere pay the Delaware subsidiary for the use of those rights, lowering their profits(?), and the Delaware subsidiary doesn't have to pay tax on that income and resulting profit?

[0] https://www.theatlantic.com/business/archive/2016/10/dont-bl...

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#125

Post by emteycz »

cuchoi wrote: post #121
m101 wrote: post #119

Corporate taxes are the most blindingly stupid idea ever. People forget that the only way to level the playing field between Amazon and local shops is to cut taxes to 0 rather than layering on increasingly complex tax rules. Amazon thrives in the presence of corporate taxes. Corporate taxes also create huge incentive to offshore jobs to tax havens. Not to mention no corporate tax rates would mean no need for all sort…

> Corporate taxes also create huge incentive to offshore jobs to tax havens That's why Yellen is proposing a global minimum corporate tax.

Why would the states profiting from low/none corporate taxes follow suit? Seems like their business just got a lot better.

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#126

Post by ObserverNeutral »

missedthecue wrote: post #107
ObserverNeutral wrote: post #93

Earlier quoted context omitted.

taxes aren't just a way to raise money for federal and local governments, they are also an elegant way which society has to allocate social hatred. You need a corporate tax because people hate corporations, a wealth tax is being discussed and on the horizon because people hate the wealthy...and so forth

I would use 'destructive' rather than 'elegant'

It's either done with taxes using money as a unit of account or let the hatred build up and let the chips fall where it may.

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#127

Post by syshum »

matheusaf wrote: post #90
HonestOp001 wrote: post #79

Earlier quoted context omitted.

Because the tax is a stealth tax on the populace. The company needs a profit margin of x. If you place a tax of y on the company, that margin, simplistically, is now x+y. The company can increase the prices on its goods by y, which means everyone now pays y more (so, the government is now making the corporation collect the tax). Or it can absorb the cost of the tax, which would hurt it’s operating margin to survive,…

> The company needs a profit margin of x. If you place a tax of y on the company, that margin, simplistically, is now x+y. Not really, this only happens for perfectly inelastic goods. We can use the price elasticity of demand and price elasticity of supply to determine what amount of the tax burden will fall on buyers and sellers [1]. We can even show that for perfectly elastic goods, the tax burden will fall entirel…

Kinda of, but investor (especially in private companies) absolutely set the level of margin they require from the corporation

the CEO's job is hit that margin with in reason, and if not develop a plan to hit that margin

If the company is unable to hit the target long enough that is when companies shut down, so sure you can say "that is only true with perfectly inelastic goods but you fail to understand that moving your capital to other things is always an option

If a company sells X goods and can only ever get a investor return of 1% on their capital no investor is going to say in that business, they will sell off the company assets and take their investment to greener pastures. Same is true if the investors demand a 8-10% return and are only ever getting 5% on their investment, the will divest from the company and move on

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#128

Post by gruez »

logifail wrote: post #124
gruez wrote: post #123

Earlier quoted context omitted.

I don't get it. I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?

> I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this? Company transfers intangible asset to subsidiary in Delaware, "trademark or naming rights"[0], its locations elsewhere pay the Delaware subsidiary for the use of those rights, lowering their profits(?), and the Delaware subsidiary doesn't have to pay tax on that income and resulting profit? [0] https://w…

That'd make sense if delaware had a low corporate tax rate, but it doesn't[1]. If you wanted to relocate your profits to a low tax jurisdiction, you'd want something like north carolina (2.5%) not delaware (8.7%).

[1] https://taxfoundation.org/state-corporate-income-tax-rates-b...

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#129

Post by m101 »

cuchoi wrote: post #121
m101 wrote: post #119

Corporate taxes are the most blindingly stupid idea ever. People forget that the only way to level the playing field between Amazon and local shops is to cut taxes to 0 rather than layering on increasingly complex tax rules. Amazon thrives in the presence of corporate taxes. Corporate taxes also create huge incentive to offshore jobs to tax havens. Not to mention no corporate tax rates would mean no need for all sort…

> Corporate taxes also create huge incentive to offshore jobs to tax havens That's why Yellen is proposing a global minimum corporate tax.

The problem here is that we are treating a symptom of legislation and not the cause, as usual. Instead of all trying to agree on a level of tax rates (unrealistic) we could unilaterally slash corporate tax rates and watch the others follow.

Re: Janet Yellen to call for global minimum corporate tax rate of 21%

#130

Post by [deleted] »

ObserverNeutral wrote: post #93
tryptophan wrote: post #48

Why don't we end all this corporate tax stupidity and remove the corporate income tax? It is a very inefficient and complicated tax to levy. >Most economists concluded long ago that it is among the least efficient and least defensible taxes. https://www.econlib.org/library/Enc/CorporateTaxation.html We can't have nice things because too many people see economics as a moral issue and not a math problem.

taxes aren't just a way to raise money for federal and local governments, they are also an elegant way which society has to allocate social hatred. You need a corporate tax because people hate corporations, a wealth tax is being discussed and on the horizon because people hate the wealthy...and so forth

[deleted]
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