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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

#361

Post by tzs »

MrPowers wrote: post #286
PragmaticPulp wrote: post #275

Earlier quoted context omitted.

> Henry George - a 19th century political economist - proposed exactly this, and suggested the only thing that should be taxed should be land That may have made sense in the 19th century when agriculture dominated the economy, but it’s irrelevant today. At scale it becomes a tax on how space-inefficient your business is. Bad news for farmers, great news for the business running a 1000-person operation out of a skyscr…

Land taxes are based on the value of the land, not the size of the land. The property tax system already performs land value assessments. Land taxes are highly progressive. Note that land taxes are only assessed on the value of the land, not the value of any buildings on the land. This incentivizes land owners to put the land to its highest and best use.

> Note that land taxes are only assessed on the value of the land, not the value of any buildings on the land. This incentivizes land owners to put the land to its highest and best use.

Doesn't it incentivize them to put land to the use that generates the most revenue? I don't see how that is necessarily the "best" use.

There will almost always be a way that a yard or garden could make more revenue, for example, such as by letting a bunch of advertisers put up billboards on it or letting someone use it for storage.

Is it really best to make it so that only the wealthy can afford to use land in a way that they enjoy rather than as an asset to be exploited for maximal revenue?

Re: G7: Rich nations back deal to tax multinationals

#362

Post by CalChris »

todd8 wrote: post #222
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…

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 taxes are not expenses. An expense is the cost of operations that a company incurs to generate revenue, either on cost or accrual basis. Corporate taxes are based on declared profits, gross revenue net of these expenses.

Furthermore, these taxes are not paid by all of us. They are paid by the owners of the corporation who and which receive considerable benefit from the government services they are paying for.

Consider corporate taxes, if you will, as use taxes for using the economy.

Re: G7: Rich nations back deal to tax multinationals

#363

Post by ajmurmann »

BbzzbB wrote: post #246
ajmurmann wrote: post #231

Earlier quoted context omitted.

Buybacks to a large degree end up not being taxed or only much later. Most people are holding on to stock for long periods now. Behavior can also often be easily be adjusted to capital gains tax. Extreme example is Larry Ellison buying in island with a loan backed by his stock rather than selling the stock and buying the island from that directly.

Isn't that just how every billionaire "spends" money tho?

If it is, it undermines the point that buybacks get taxed

Re: G7: Rich nations back deal to tax multinationals

#364

Post by fallingknife »

Taniwha wrote: post #292
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

We don't legally treat them the same, though. That's a myth.

Re: G7: Rich nations back deal to tax multinationals

#365

Post by Strom »

SMAAART wrote: post #265
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…

that is an idea that I've been floating for a while, unfortunately people who don't understand economics and rely mostly on their feelings don't approve, and those are the majority of votes hence the politicians don't want to commit political suicide by promoting something like that. Think about it, a no tax corporate tax, yet taxing the recipients of dividends and distributions would: * eliminate tax heavens * forei…

This is how corporate taxes work in Estonia. There is no income tax, but dividends/distribution is taxed. I think it's great overall.

However there are some loopholes that companies still figure out. In Estonia's case we have big international banks that found a juicy loophole. The local Estonian branches pay no corporate tax, but they also never pay dividends. Instead they give out a no interest loan to their foreign mothership and have no intention of ever getting it back. This loophole has since been patched, but it shows that companies will still hire teams of lawyers to find new loopholes to not pay a single cent.

Re: G7: Rich nations back deal to tax multinationals

#366

Post by pitaj »

nostrademons wrote: post #360
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 the case with any form of government financing - taxes, deficits, and inflation all introduce market distortions where they reduce productive activity. This is inherent to economics, because a basic principle is that there is no free lunch: if you are going to spend resources on spending , those resources have to come from somewhere else, and the private sector by definition is the "not public sector". But if…

Different taxes have different amounts of dead weight losses.

For instance, land value tax has no dead weight loss. Corporate tax has one of if not the highest dead weight loss.

Re: G7: Rich nations back deal to tax multinationals

#367

Post by vmception »

njovin wrote: post #321
Taniwha wrote: post #292

Earlier quoted context omitted.

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

I look forward to the day that we punish corporations by removing their freedom (ability to operate) instead of fining them laughably small percentages of their yearly revenue for serious violations of laws and regulations. In reality I understand that this would harm the employees and the public to an unacceptable degree so maybe some form of “jail time” whereby all profits go directly to non-executive employees and…

Right, actually impairing a corporation leads to a monopoly and less competition which the state doesn’t want to be directly responsible for

This guides the trend in enforcement actions or lack thereof

There are some books on this

Re: G7: Rich nations back deal to tax multinationals

#368

Post by larsiusprime »

oivey wrote: post #298
PaulRobinson wrote: post #240

Earlier quoted context omitted.

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.

If "bogus assessments" lead to an incentive to declare a low value for your land, then that will be caught if and when you try to sell it or rent it out for a higher price. So if people just stick with a low valuation to pay less land tax, this will have the effect of greatly decreasing land prices, which are the principal cause of housing unaffordability, which seems like a good thing to me.

Re: G7: Rich nations back deal to tax multinationals

#369

Post by skybrian »

mjmahone17 wrote: post #355
PragmaticPulp wrote: post #275

Earlier quoted context omitted.

> Henry George - a 19th century political economist - proposed exactly this, and suggested the only thing that should be taxed should be land That may have made sense in the 19th century when agriculture dominated the economy, but it’s irrelevant today. At scale it becomes a tax on how space-inefficient your business is. Bad news for farmers, great news for the business running a 1000-person operation out of a skyscr…

It’s bad news for farmers that are farming in the middle of a city, yes. But farms in rural areas will hardly get taxed at all, because the land couldn’t be used for much else, so has very little intrinsic value. Land value taxes adjust based on how desirable a plot is: basically, you get to keep any value you generate above and beyond the value the society surrounding the land gave it. If you leave a plot of land em…

I’m wondering how this is supposed to interact with zoning? There is a lot of agriculturally-zoned land in California that would turn into housing developments pretty quick if it weren’t illegal. It’s typically in a nice-looking area near some water or a park, not in the middle of a city.

If you keep the zoning then maybe the land isn’t worth that much, but if property taxes were based on the “true” land value then it would mean farmers sell out faster to create sprawl.

Re: G7: Rich nations back deal to tax multinationals

#370

Post by [deleted] »

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…

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