Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

businessinsider.com.au

Post reply on HN
Print view View original

251–260 of 431 posts

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#251

Post by KirillPanov »

perryizgr8 wrote: post #100
fighterpilot wrote: post #78

I've heard this suggested before: abolish all corporate tax and increase capital gains tax to equal income tax. This will level the playing field between large and small businesses, since the former has the means to dodge byzantine corporate tax laws. It will also give an incentive for companies to stay onshore. Any downsides?

Corporate tax does not make sense because "income" and "profit" for a company are very loosely defined. Instead, a simple GST on products and services should be enough. Unambiguous and easy to reason about, with very less maneuverability to avoid. In fact, I would rather income tax for individuals also be done away with. Just tax every transaction in the market. That is much fairer and presents less avenues to avoid…

> Corporate tax does not make sense because "income" and "profit" for a company are very loosely defined.

Yes, the verbiage used by the IRS is awful; they use the term "income tax" to describe both the "personal revenue tax" and the "corporate profit tax".

Unfortunately they're stuck with it because the 16th amendment uses (but does not define) the term "income".

So if they call the thing that they're taxing anything other than "income", they have to deal with a bunch of clowns arguing that they aren't allowed to tax that.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#252

Post by throwaway2037 »

onlyrealcuzzo wrote: post #182
bartart wrote: post #117

Earlier quoted context omitted.

It's also worth noting that the top 1% pay about 40% of all income taxes at the federal level, and they earn about 20% of annual income from all sources ( http://hdr.undp.org/en/indicators/186106 ). So classifying 88% of federal revenue as paid by regular workers might be a bit misleading

99% of the top 1% are "normal workers" like me - engineers at Google - or my cousin - a radiologist - or one of my best friends - an investment banker - or lawyers, or owners of successful small businesses, etc... These "normal workers" pay a lot of that 40% of the tax bill. There aren't that many CEOs of Fortune 500 companies and board members, A+ list celebrities, and aristocrats. You're getting into the .01% - tha…

First, I assume when you write "normal workers" that you mean non-executives and non-passive income earners. (Executives can get a lot of equity or dividends that accrue taxes at lower rates; passive income earners use asset depreciation to lessen tax burden.)

The top 1% in the US is ~400K USD.

Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effective and nominal tax rates!) In my view: "All in" should be about 50-55%. When I say "all in" I mean absolutely everything -- federal, state, local, national pension, national health (if applicable), yada yada yada. That would mean top 1% still have net income (after taxes) of more than 200K USD.

If you look at highly developed economies, it seems hard to provide a healthy social safety net without 50% effective income tax rate on top 1%.

In Hongkong, the top effective tax rate is about 15%. The social safety net is appalling. The number of poor, working, elderly people (collecting cardboard in the street to sell by the kilo to recyclers) is heartbreaking. You would not use the public health system, nor the public school system; nor depend upon the national pension, nor unemployment benefits. One bright spot: The public housing system has served well the working class and below. (I joke that 15% only gets you a good metro system and airport.) Hongkong feels like a semi-feudalistic society.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#253

Post by bourgwaletariat »

EvilEy3 wrote: post #205
bourgwaletariat wrote: post #110

Honest question: Who here will stop using Uber because of this? Anyone?

Give me an alternative that is better or comparable and I'll think.

Not using them. A cab. Your own car. A rental car. That other ride sharing company. Or the other one. Or the other one. Your buddy with a car. The next door neighbor with a car.

Walk. A bike. The train. Move somewhere else.

Or just keep whining about how the world is oppressing you and Uber has saved you from your own misery.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#254

Post by KirillPanov »

toast0 wrote: post #66
Syzygies wrote: post #4

Individuals are subjected to "alternative minimum tax". Why not corporations?

The trump tax changes actually did. IIRC, a US corporation is taxed either 20% of US net income or 10% of global net income with credits for overseas taxes paid, whichever is more. Corrections welcome, I likely misremembered something. The idea being if you paid at least 10% on the income in the jurisdiction where it was earned, great; if not, you'll pay it at home. This replaced a higher rate on US net income and gl…

Incorporate in a low/zero-tax jurisdiction.

Form a second corporation that resells your product to your US customers at an insignificant markup. It pays tax only on said insignificant markup.

The company it buys from has no US operations or dealings of any kind, therefore does not even file US returns.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#256

Post by 88840-8855 »

gdsdfe wrote: post #255

I don't understand why it's taking ages to close these loopholes

Probably due to manifold opinions on those topics, a rather slow law creation system, lobbying forces, competing EU governments, prioritisation and corruption.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#257

Post by slavik81 »

Mediterraneo10 wrote: post #46
dkarras wrote: post #34

Earlier quoted context omitted.

>US taxes global individual income... Always wondered why US citizens do not make a bigger deal out of this. If I understand correctly, if you are a US citizen, but live somewhere else in the world, IRS still expects to be paid tax from your individual income in that foreign country (possibly in addition to the tax you pay in your country of residence) right? I assume there are minimum income thresholds but still...…

US citizens make something of a deal out of it, as you can see from expat forums every spring when tax-filing season comes. However, relatively few American citizens abroad choose to renounce their citizenship because they find it useful to retain it. The minimum income threshold to pay income taxes (otherwise you just file) is ~$100,000, so that generally means most middle-class people don’t have to pay. The real pa…

> However, relatively few American citizens abroad choose to renounce their citizenship because they find it useful to retain it.

Also because the US government will not allow you to renounce your citizenship if you are doing so for tax reasons.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#258

Post by KirillPanov »

applepple wrote: post #20
staticautomatic wrote: post #14

Earlier quoted context omitted.

This begs the question of what purpose the shell companies serve.

Maybe revenue laundering using borrowed credit? I wouldn't be surprised if some day we discover that many corporations the tech space have been engaged in some kind of global credit laundering scheme using shell companies as a filter to systematically separate credit from debt in order to generate artificial revenue for big tech corporations... Money extracted straight from the big banks. They should refer to this sc…

What kind of bank makes business loans without encumbering any collateral?

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#259

Post by notahacker »

rcpt wrote: post #197
0xy wrote: post #147

Earlier quoted context omitted.

It's really hard to evade personal income tax, so why shouldn't the government just give up and tax corporations at 0%, while having high progressive personal income taxes? Or, better yet, proper sliding consumption taxes. If you want a yacht or private jet, pay 150% in taxes. Norway already taxes luxury cars at over 100% of their value.

This is right. Corporate taxes just create a tax evasion industry. If there were no corporate tax then shareholder profits would be higher. It's be simpler to tax the shareholders and an individual is unlikely to have an army of lawyers doing their taxes

When corporate tax is zero and corporations don't hire tax specialists because nobody audits them, individuals don't need an army of specialists to hide most of their income and expenditure in a corporation, and basically anyone that isn't an entry-level employee can do it...

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#260

Post by mypalmike »

michaelmrose wrote: post #234
sneak wrote: post #226

Earlier quoted context omitted.

> Clearly everyone should try to pay a reasonable share. That isn't clear to me, because using the government to collect revenue hasn't been demonstrated to be a benefit. This still presupposes that government revenue is inherently beneficial. I think if everyone found a way to pay virtually nothing, the government would collapse. That's not the same thing as society collapsing, society and the government are not cot…

Do you really see a situation where the US government collapses and US society does not?

That's the very essence of libertarian fantasy.
Post reply on HN