G7: Rich nations back deal to tax multinationals • Hacker News Board

Re: G7: Rich nations back deal to tax multinationals

#41

Post by nomoreplease » Sat, Jun 05, 2021, 12:39 PM UTC

bodono wrote: post #13

gostsamo wrote: post #8

Earlier quoted context omitted.

This is a minimum with the corporate tax rate in the US being above that. Therefore, the difference between them minimum and the official value is the incentives margin that the government can use to nudge corporations in the desired direction.

Yes I understand that, but I believe that many corporations today pay even lower than a 15% effective tax rate. I suppose you're saying that these loopholes will be closed up to that minimum?

Depends what you mean by loop holes. In the US, you can deduct R&D or capital costs like building a factory. That can make your tax bill nearly zero. I wouldn’t call that a loop hope. It’s something out there to incentivize capital spending and job creation. Other countries have the same

Re: G7: Rich nations back deal to tax multinationals

#42

Post by ajkdhcb2 » Sat, Jun 05, 2021, 12:39 PM UTC

A few countries agreeing on a global law. Sounds to me like "USA and UK agree that China should do X". Good luck enforcing it and closing all loopholes when there are powerful people that don't want that. Empty political talk to make it look like they are trying

Re: G7: Rich nations back deal to tax multinationals

#43

Post by lixtra » Sat, Jun 05, 2021, 12:40 PM UTC

Chris2048 wrote: post #21

trainsplanes wrote: post #12

Earlier quoted context omitted.

There are some countries that you can move to that are generally free of the laws of western nations. For some reason, people from “western neoliberal and socialist” countries generally don’t move to them, though.

Because if they did, bombs would soon fall in order to destabilise that threat.

I have difficulties to come up with current examples.

Maybe some could argue that pre Soviet Afghanistan (in the ‘60) was such a place. But today?

Re: G7: Rich nations back deal to tax multinationals

#44

Post by throwaway13337 » Sat, Jun 05, 2021, 12:41 PM UTC

This sounds like it will be hell for small software companies with customers all over the world.

Paying taxes differently for each country of the customer you sell to is a ridiculous hardship.

It only benefits the large multinationals to reduce their competition. These sorts of rules centralize markets to fewer and fewer companies able to spend the resources to fulfill more and more complex rules.

The end result is higher prices and lower innovation for consumers. While employment gets centralized to slow-moving, inefficient, but compliant companies.

It's a real shame that legislation is actively trying to make it harder to do business as a small entity. Functioning governments should have it very high on their list of priorities to do the opposite.

Re: G7: Rich nations back deal to tax multinationals

#45

Post by pclmulqdq » Sat, Jun 05, 2021, 12:42 PM UTC

trainsplanes wrote: post #12

greenwich26 wrote: post #10

Why are governments allowed to collude like this? Isn't this the same idea as price fixing? Exploiting their monopoly (governments' monopoly on the right to do commerce) to unfairly raise prices (taxes)? The world needs at least somewhere where you can opt-out from Western neoliberalism and socialism.

There are some countries that you can move to that are generally free of the laws of western nations. For some reason, people from “western neoliberal and socialist” countries generally don’t move to them, though.

People do move there. Singapore picks up a ton of US expats, as did Hong Kong before it got swallowed by China. Bermuda and the Caymans have tons of companies and restrict immigration so tightly that they are less attractive.

Re: G7: Rich nations back deal to tax multinationals

#46

Post by peteretep » Sat, Jun 05, 2021, 12:42 PM UTC

bodono wrote: post #13

gostsamo wrote: post #8

Earlier quoted context omitted.

This is a minimum with the corporate tax rate in the US being above that. Therefore, the difference between them minimum and the official value is the incentives margin that the government can use to nudge corporations in the desired direction.

Yes I understand that, but I believe that many corporations today pay even lower than a 15% effective tax rate. I suppose you're saying that these loopholes will be closed up to that minimum?

I think your choice of words here is confusing the issue a little, and would propose “incentive” for a tax break the government would like you to take (employing felons), and “loophole” for tax avoidance the government doesn’t want you to take (eg: sending all your profits to the Cayman Islands).

Given that, if min tax rate is 15% and standard corp tax is 20%, the government is happy for you to get to 15% and would like you to get to there with incentives, but not happy for you to get any lower however you do it. The incentives are generally not powerful enough to get you there anyway

Re: G7: Rich nations back deal to tax multinationals

#47

Post by uniqueid » Sat, Jun 05, 2021, 12:42 PM UTC

greenwich26 wrote: post #10

Why are governments allowed to collude like this? Isn't this the same idea as price fixing? Exploiting their monopoly (governments' monopoly on the right to do commerce) to unfairly raise prices (taxes)? The world needs at least somewhere where you can opt-out from Western neoliberalism and socialism.

Cracking down on corporate tax avoidance is antithetical to 'neoliberalism', no?

Re: G7: Rich nations back deal to tax multinationals

#48

Post by gostsamo » Sat, Jun 05, 2021, 12:42 PM UTC

bodono wrote: post #13

gostsamo wrote: post #8

Earlier quoted context omitted.

This is a minimum with the corporate tax rate in the US being above that. Therefore, the difference between them minimum and the official value is the incentives margin that the government can use to nudge corporations in the desired direction.

Yes I understand that, but I believe that many corporations today pay even lower than a 15% effective tax rate. I suppose you're saying that these loopholes will be closed up to that minimum?

We can't know for sure until the text of the deal is published, but it is the likely scenario. plus, all the accountants and tax lawyers on the world will be unleashed upon this agreement to find ways to avoid paying up. So, this is my hope, but it is not certain.

Re: G7: Rich nations back deal to tax multinationals

#49

Post by decasteve » Sat, Jun 05, 2021, 12:43 PM UTC

It would be nice to see some analysis. This is just a write-up of the G7 talking points.

Re: G7: Rich nations back deal to tax multinationals

#50

Post by peteretep » Sat, Jun 05, 2021, 12:43 PM UTC

ajkdhcb2 wrote: post #42

A few countries agreeing on a global law. Sounds to me like "USA and UK agree that China should do X". Good luck enforcing it and closing all loopholes when there are powerful people that don't want that. Empty political talk to make it look like they are trying

China’s tax rate is considerably higher than 15% and they also don’t want their industries to be competing against companies who are cheating the tax man.