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G7: Rich nations back deal to tax multinationals

bbc.co.uk

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Re: G7: Rich nations back deal to tax multinationals

#201

Post by StopHammoTime »

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

Here’s an idea, let’s charge tax on revenue and it can just be the cost of doing business. Small businesses get a tax holiday for the first few years. Problem solved.

Re: G7: Rich nations back deal to tax multinationals

#202

Post by toyg »

etherael wrote: post #167
refurb wrote: post #35

Earlier quoted context omitted.

This is a terrible idea. This “race to the bottom” is what drives efficiency and better ways of doing things. It’s why we don’t have $10,000 desktops in our homes with 386 processors. If computer chip manufacturers decided to create a floor price for their products that would be collusion and bad for consumers. Same here. It’s bad for citizens of a country. You damn know some developing country is going to be told “n…

This is just G7 isn't it? Seems to me like all the typical very low tax jurisdictions you'd select for as somebody optimizing tax with the freedom to locate wherever you choose are still open.

This is the first step. G7 can then strongarm or cajole their "client states" with coordinated action. Even just the fact that such action is finally happening, is a great step. This was considered a sci-fi scenario 20 or 30 years ago and now it's become reality.

Re: G7: Rich nations back deal to tax multinationals

#203

Post by dalbasal »

orf wrote: post #2

Summary: > Firstly, the G7 want a global minimum tax rate so as to avoid a "race to the bottom" where countries can undercut each other with low tax rates. > Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits. Good. It’s a shame that Biden had to back down from the initial 28% because of do…

The actual rate is the least important part. What is important is jurisdictional issues, accounting standards, corporate law, deferral rules and the like.

This is the problem with corporation tax generally. You can't really have a conversation about it in "normal" terms, that a journalist, politician or MOP can understand. It can only be understood via scenario plans and spreadsheets. It's a million little details. There is no "big picture."

Re: G7: Rich nations back deal to tax multinationals

#204

Post by bradleyjg »

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

One problem is that this would effectively distribute tax revenue from a company by the citizenship of the owners (6 and especially 7) but most countries think they are entitled to some tax revenue from companies operating in their nations even if the company is wholly owned by foreigners.

Re: G7: Rich nations back deal to tax multinationals

#205

Post by csomar »

ed25519FUUU wrote: post #189
csomar wrote: post #89

Earlier quoted context omitted.

> This sounds like it will be hell for small software companies with customers all over the world. Uh, no, this will bring required tax profits for rich governments from these predatory countries that will finally fix their budget deficits and insure equality between its citizens. /just kidding, this will break small companies and make it almost impossible to sell/export to richer countries for small new comers. The…

Interesting narrative here. Ireland is “predatory” because they create an extremely low tax environment for competitiveness. Is Texas also predatory for having no income tax versus CA, NY etc 10%+ income tax?

Predatory from the perspective of other nations/states.

Re: G7: Rich nations back deal to tax multinationals

#206

Post by hervature »

Naga wrote: post #15
amelius wrote: post #6

Earlier quoted context omitted.

> Firstly, the G7 want a global minimum tax rate so as to avoid a "race to the bottom" where countries can undercut each other with low tax rates. Why is this necessary, if countries can just tax companies based on the money they made in their country ?

It's complicated. "Money they made in their country" is hard to define. Large companies abuse intangible assets to shift profits around, but it's hard to say at what point abuse starts. For example, Google USA sells advertising to its clients. But, the assets it is selling are actually owned by Google Ireland. Google Ireland charges Google USA a license fee of 100% of the revenue they made. Suddenly, Google USA has n…

Except we already have a minimum tax worldwide - 0%. Perhaps every country should meet the others and offer 0% corporate tax. The solution isn't as simple as "minimum tax" as some places legitimately believe that corporate tax is not the most effective way to generate government profits (Wyoming and South Dakota at the state level).

Re: G7: Rich nations back deal to tax multinationals

#207

Post by toyg »

andy_ppp wrote: post #130
orf wrote: post #2

Summary: > Firstly, the G7 want a global minimum tax rate so as to avoid a "race to the bottom" where countries can undercut each other with low tax rates. > Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits. Good. It’s a shame that Biden had to back down from the initial 28% because of do…

Biden has been consistently good at this, going in with a crazy bold position and letting people argue him down to somewhere that would probably be his real position in the first place.

Veteran politician can do politics, who knew! /s

It's about time people started to elect leaders who can get shit done in the frameworks that exist to get shit done, instead of trying (and failing) to destroy such frameworks.

Re: G7: Rich nations back deal to tax multinationals

#208

Post by M2Ys4U »

hemantv wrote: post #131

This feels like US wants to keep competition out from creating big companies. Very similar to feeling to how wealthy wants higher income taxes (not wealth taxes) when they have all the money the need. To maintain status quo. Seems like US enjoyed with this arrangement by creating very large companies (monopolies) worldwide, now they want to keep US world order intact. Good for world, China wouldn't play balls with th…

This is good news for countries where US companies are active, but use creative accounting to move their profits out of those countries.

Re: G7: Rich nations back deal to tax multinationals

#209

Post by cycomanic »

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

This is brought up again and again. You can make similar arguments for every tax. In fact let's look at income tax. The money people spend on income tax they could spend on.

1. Spent on goods or services

2. Spent on rent

3. Spent on capital purchases

4. Spent on debt repayment or other forms of financing

In fact income tax does not have the last two points that you admit are bad, so maybe we should eliminate income tax and use corporate tax only?

The thing is low corporate taxes create an inequality between labor and capital gains. It's already the case that wealth inequality is quite unrelated to income inequality, the highest wealth individuals often don't register in the high income brackets.

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