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

Re: G7: Rich nations back deal to tax multinationals

#291

Post by saddlerustle » Sat, Jun 05, 2021, 3:10 PM UTC

unreal37 wrote: post #290

saddlerustle wrote: post #133

Earlier quoted context omitted.

What you're describing is a method of deferring taxation, not avoiding taxation. Google is a US publicly traded company so its profits ultimately belong to its shareholders, and it can only pay that out via the US.

The company doesn't have an obligation to pay this money to their shareholders, ever. You might die (of old age) before you get your initial investment in Facebook shares back as dividends.

If that was deemed likely, the company's shares wouldn't be worth anything. Facebook and Google routinely do share buybacks these days (which is equivalent to paying dividends)

Re: G7: Rich nations back deal to tax multinationals

#292

Post by Taniwha » Sat, Jun 05, 2021, 3:10 PM UTC

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…

If you're going to legally treat corporations the same as actual humans - then tax them the same.

We pay taxes for services we expect from governments, defence, policing, justice, water, sewers etc etc I don;t see why corporations that use all these things shouldn't pay their share

Re: G7: Rich nations back deal to tax multinationals

#293

Post by MuffinFlavored » Sat, Jun 05, 2021, 3:11 PM UTC

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…

9. Pocketed by corporate executives / board members

Trickle up economics, right?

Now make a list of all of the things the money could do if it is taxed and gets to the government. Schools, roads, etc.

Re: G7: Rich nations back deal to tax multinationals

#294

Post by throwaway894345 » Sat, Jun 05, 2021, 3:12 PM UTC

lars512 wrote: post #282

MrPowers wrote: post #261

Earlier quoted context omitted.

The deadweight loss of taxation is much lower for a land tax than an income tax. The deadweight loss is the economic resources allocated to complying with the tax. The armies of tax lawyers would be able to perform other economically productive activities if they weren't pouring over the tax code. Pigovian taxation is even better. Taxing gas is a great example. Gas consumers emit carbon which has a cost for society.…

As an Australian who moved to Sweden, I was amazed at how efficient the Swedish income tax process was. The government already knew everything they needed to calculate your return, and gave it pre-filled. There were not endless exemptions. Nobody at my work used an accountant, most approved their tax with a few clicks and were done. So much more efficient than in Australia!

The American tax system is similarly frustrating. I’m a senior engineer and I have a hard time navigating tax forms even with the help of Intuit, and it frustrates me that I have to pay Intuit (or someone else) to help me do taxes which are complicated in large part because Intuit et al lobby for complex tax codes and against the sort of Swedish model you describe.

Worse, when I moved to Chicago the state of Illinois wouldn’t even accept my taxes electronically because their form required one of a handful of authentication methods—the only one of which that ought to have worked for me was to use my Illinois driver’s license number—a 12 digit sequence; however, their form only permitted 8 digits. It was a significant hassle just to get them to take my money.

I’ve also had difficulties figuring out how much to withhold. In the US they give us a form that calculates “allotments” (or something—I forget the term) but it’s unclear whether more of those correspond to more or less withholdings and in any case the form computed incorrectly for me for several years (I’m sure it was user error somehow and senior engineers are just not reliably smart enough to figure it out, even with the help of HR) and I would end up owing thousands in taxes as well as a separate penalty for not withholding enough.

It’s maddening that our government makes it so difficult for earnest people to pay their taxes.

Re: G7: Rich nations back deal to tax multinationals

#295

Post by unreal37 » Sat, Jun 05, 2021, 3:12 PM UTC

vanilla-almond wrote: post #85

throwaway13337 wrote: post #44

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 h…

Small software companies with customers all over the world are not multinational companies. These small software companies are located in one country i.e. one physical presence, unlike tech companies where their presence is in multiple countries. So this tax change won't affect small software companies located in one country with international customers. Edited to add ... The article states: " the rules will aim to m…

European VAT, for instance, applies even for non-European companies. I can totally see some EU politician thinking that they deserve some portion of the profits of each sale (income tax) as well as a sales tax.

Potential for having to pay income tax in countries you have customers in, sometime in the future, is > 0%.

Re: G7: Rich nations back deal to tax multinationals

#296

Post by ipaddr » Sat, Jun 05, 2021, 3:13 PM UTC

AmericanChopper wrote: post #120

mediocregopher wrote: post #100

Earlier quoted context omitted.

Shod google not be taxed twice in this example? Once on the income made in the USA when they sold the actual thing, and once in Ireland when the Irish branch sold the thing to the USA branch? Not to mention sales tax....

What you’re proposing is a tax on revenue, rather than a tax on profits. That is what a sales tax is.

If a tax on revenue was used the outcome would be companies would try to increase profits but reduce revenue so high margin products would be the goal which would mean higher prices / fewer sales.

I think the solution should be market based. Whatever rate google US gets from google Ireland should be available to any company and google Ireland should be forced to sell any services/ip to any company who requests it at that rate.

Doing anything else means the cost of the IP google Ireland charges to google US is made up.

Re: G7: Rich nations back deal to tax multinationals

#297

Post by kapuasuite » Sat, Jun 05, 2021, 3:14 PM UTC

cycomanic wrote: post #267

kapuasuite wrote: post #247

Earlier quoted context omitted.

Capital gains taxes (paid by shareholders) are completely separate from corporate income taxes (paid by corporations). You're also forgetting (or ignoring) that the legal incidence of a tax and the economic incidence are completely separate. For example, employers and employees are both legally responsible for paying a portion of payroll taxes, but economically speaking that tends to lead to lower wages, making the e…

I'm a bit confused by your post, it seems you are agreeing with me, but you say you disagree? I am aware of the difference between capital gains tax and corporate tax (also note that not every country has a capital gains tax). My argument applies to both, i.e. one of the reasons for raising inequality is the inbalance of labour and capital and the low corporate and capital gains taxes definitely contribute. About the…

Yes - corporate income tax should be eliminated entirely - the revenue can be made up in other, less terrible ways. Corporate incomes taxes are a poor way to address inequality because they tend to fall, at least in part, on workers, and not on wealthy people themselves, who largely accrue wealth through investment, not work. If the goal is to reduce inequality then we should simply tax rich people more, not corporations, whose money will eventually be passed to shareholders anyway.

Re: G7: Rich nations back deal to tax multinationals

#298

Post by oivey » Sat, Jun 05, 2021, 3:15 PM UTC

PaulRobinson wrote: post #240

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…

If you’re going down this route, many will argue that all forms of income tax are equally “wrong”. Henry George - a 19th century political economist - proposed exactly this, and suggested the only thing that should be taxed should be land: impossible to hide from a tax inspector, potentially a waste to the public commons if useful land that could be exploited isn’t and you can even protect land you wish to keep prist…

This system sounds like would be gamed just like how property taxes are now: bogus assessments. At least income and sales have a clear, non-subjective value in dollars.

Re: G7: Rich nations back deal to tax multinationals

#299

Post by todd8 » Sat, Jun 05, 2021, 3:17 PM UTC

philjohn wrote: post #234

todd8 wrote: post #222

Earlier quoted context omitted.

Corporations pass the tax expenses on to consumers as higher prices of produced goods, lower wages to employees, and lower returns to owners that supply capital. These taxes are all paid by us but they are largely invisible and justified to the voters as making corporations “pay their fair share”.

Corporate tax, as a share of total taxation in the US, has dropped from 30% to 10% since the 50's ... yet wages have been pretty stagnant since the 80's (in real terms).

The top corporate tax rate had been ~35% for roughly 25 years ; in 2018 it dropped to 21% and wage growth has indeed increased since 2018. Were wages positively affected by the lower corporate tax rate? I don’t know, so many factors affect the economy; corporations might choose to lower prices or do more research on better products or issue greater dividends to attract capital for expansion. I was just making the point that we humans end up paying somehow for the spending that the government chooses for us and that I would rather make these tax costs more visible to the people actually paying the taxes.

Re: G7: Rich nations back deal to tax multinationals

#300

Post by saddlerustle » Sat, Jun 05, 2021, 3:17 PM UTC

tw04 wrote: post #274

IanCal wrote: post #253

Earlier quoted context omitted.

> You’re ignoring that the companies can just keep lots of cash without distributing it to individuals Nobody benefits from a company growing indefinite wealth without distributing it to actual people. > So for example the company can rent houses, cars, and airplanes for every employee If they could do this, all companies would do this already to avoid taxes. In reality, this is dealt with by (in the UK) considering…

That is completely avoided if the person makes less than 12k/year though. So there is already a loophole, there just hasn’t been enough incentive to use it yet. Although I’d question if that’s why some executives take a $1 salary and the rest in stock. All of their benefits are now tax free*. yes I realize it’s nuanced and depends on country.

No, the value of benefits in kind count towards the income tax band.