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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

#451

Post by ipaddr »

jandrewrogers wrote: post #345
ipaddr wrote: post #276

Earlier quoted context omitted.

Capital gains is much lower in the US compared to other countries, your idea floats the value at your current tax bracket. It could work but where do royalities fit in? Estate taxes?

This is incorrect, capital gains rates in the US are currently similar to or higher than many European countries. Federal (20%) + NIIT (3.8%) + State (up to 13.3%) puts you firmly in the middle of the pack for European countries. The proposed changes would make them the highest in the developed world, by a large margin. The elephant in the room is that the main difference between US and European tax rates is that the…

The full amount of a short-term capital gain (property held for less than 1 year) is taxed as regular income. Long-term capital gains are taxed at a lower rate than regular income, but the amount depends on your tax bracket. Long-term capital gains in the 10% and 15% tax bracket aren’t taxed at all, those in the highest tax bracket are taxed at 20%, and everything in between is 15%.

In the US, capital losses can reduce capital gains and up to $3000 of regular income. If losses are $3000 more than gains, you can carry them forward to future years.

If you make 90,000 in Florida City, Florida. You purchase a home for 100,000 sold for 200,000 your capital gains is: $15,000 15% federal 0% state 0% local

In VermountVille New York State 21409 15% federal 6.41% state 0 local

In Sf 24,500 21,000 if you are married.

In order to pay 36% you have to be earning over 500,000 to pay that rate and single.

Re: G7: Rich nations back deal to tax multinationals

#452

Post by bgroat »

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…

I think this idea, but I always thought that a country or countries should just be on the cap table.

Forget tax, but if I want access to the Canadian grant ecosystem they take 7%.

I want Delaware Chancery courts the U.S takes 8%

Swedish bank secrecy, 6%

And we access states more like VCs and their value add.

Obviously all numbers are made up

Re: G7: Rich nations back deal to tax multinationals

#453

Post by TacticalCoder »

bradleyjg wrote: post #204
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.

> ... 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.

Any individual in the EU buying anything from a foreign company operating in their EU nation pays the VAT on the good or service. That's usually 21% and up to 25%. And that's not on the profits.

That's already quite something.

Re: G7: Rich nations back deal to tax multinationals

#454

Post by oblio »

MrPowers wrote: post #425
klipt wrote: post #385

Earlier quoted context omitted.

Do you think that's a problem with existing property taxes? The main difference between property and land tax is that with a land tax, the structure isn't taxed. So you can build up "for free" wrt taxes, which encourages more density on the most valuable land. E.g. land in the middle of downtown San Francisco that's currently rented out as a flat parking lot, could instead be built up into multi level parking or hous…

San Francisco is an interesting case cause they used to have a land tax and economists argued that's what cause San Fran to be quickly rebuilt after it was burned to the ground in 1906. Land owners were still taxed the same, even though their building was gone. They'd have to either sell or rebuild. Contrast that with New Orleans after Hurricane Katrina. Property owners had their buildings destroyed, so taxes went to…

That's works only if you're an investor. You're going to rebuild your home immediately, finance optimizations be damned.

Re: G7: Rich nations back deal to tax multinationals

#455

Post by jakeinspace »

kapuasuite wrote: post #251
StopHammoTime wrote: post #201

Earlier quoted context omitted.

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.

Why tax a corporation's income at all when you can tax its shareholders income instead?

Well, the shareholders may live in a different area or country than the one in which the company operates. If a corporation is largely owned by American investors, but does its production largely in a developing nation (relying on their infrastructure to operate), then I think it's fair to say that both the developing country and the US should both get a slice of the pie: 1 for providing the infrastructure and labor market, and the other for providing the comforts of a developed country to shareholders.

Re: G7: Rich nations back deal to tax multinationals

#456

Post by reedjosh »

closeparen wrote: post #447
reedjosh wrote: post #424

Earlier quoted context omitted.

In urban area's sure, but I don't think it's fair to call it hoarding in suburban or rural areas. There's tons of land in the US, it's just that there are no homes _right_ next to jobs and restaurants and the culture people want to live in. Now that I'm remote, I plan to move to a rural area and grow some of my own food in a single family home. I don't think that should be considered hoarding.

Where there’s tons of land, it’s not that valuable. LVT would be low. It would only be punitive to people with a lot of land (per person) in those spots that are valuable because of those restaurants, culture, jobs, etc. nearby.

I don't really disagree with the LVT tax idea, I just want people to be clear about hoarding and single family homes. In regards to pushing single family homes out of high value areas, then LVT does make sense.

That said, I'm a crazy pro individualism and no tax no government guy, so I have no real place in this thread. : p

Re: G7: Rich nations back deal to tax multinationals

#457

Post by oblio »

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!

In Romania if you're a regular employee, you don't have anything to do. Flat tax rate, taxes at the source, no exemptions, no deductions.

You don't even file.

Re: G7: Rich nations back deal to tax multinationals

#458

Post by admax88q »

reedjosh wrote: post #424
closeparen wrote: post #415

Earlier quoted context omitted.

Middle class families in single family homes are hoarding a scarce and essential resource. Billionaires in high rises aren’t. The idea is to punish bad behavior and reward good behavior, not to cut down the tall poppies.

In urban area's sure, but I don't think it's fair to call it hoarding in suburban or rural areas. There's tons of land in the US, it's just that there are no homes _right_ next to jobs and restaurants and the culture people want to live in. Now that I'm remote, I plan to move to a rural area and grow some of my own food in a single family home. I don't think that should be considered hoarding.

If you move rural you're not hoarding. If your holding a small single family home in the core of a dense city where lots of jobs are, you are hoarding.

That land would probably serve society better if it had more than a single family dwelling on it, you could have 10 families in walking distance of their jobs rather than one, and 9 families commuting via car.

Re: G7: Rich nations back deal to tax multinationals

#459

Post by rsj_hn »

IanCal wrote: post #253
mrgordon wrote: post #214

Earlier quoted context omitted.

You’re ignoring that the companies can just keep lots of cash without distributing it to individuals in order to avoid taxation under your system. So for example the company can rent houses, cars, and airplanes for every employee to ensure there is not much money left to be taxed as income. On paper they look like corporate expenses but it’s really just a way to distribute money without it being taxable.

> 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…

> Nobody benefits from a company growing indefinite wealth without distributing it to actual people.

No, many would benefit in very obvious ways, if you just think about it a little bit: if you want to accumulate wealth you prefer to be taxed on what you spend rather than what you earn. That allows you to save more quickly, it allows you to create a dynasty where wealth is passed to your offspring, who in turn would prefer to pay taxes on their consumption rather than their income.

So if a company served as a type of money making engine but didn't distribute anything, you can save by purchasing shares and letting compound interest work to your benefit and then spend some of that in your retirement by selling some of your shares and give the rest to your kids. You would have a lower overall tax burden as you could earn like a king but live just a middle class lifestyle, allowing your kids to live like kings even if they earned just a middle class lifestyle, and with some left over due to the magic of interest.

This is why if your income >> your consumption, you really want only consumption taxes.

There is also the issue of precautionary saving. Most people prefer to have money in the bank to insure themselves against future loss of income, and this type of precautionary savings benefits people even if there is no consumption, just as having insurance provides a benefit even if you never get into an accident. So if you don't need to pay taxes on savings, then you can shield yourself more easily from future income losses and smooth consumption so you always prefer taxes on consumption, which do not make consumption smoothing more difficult, than taxes on income, which do. Think of it in this way -- a tax on insurance makes insurance more costly and thus more difficult. But financial savings are a form of insurance for when you lose your job or face some other financial setback.

So in summary, one can argue that the purpose of money is consumption so "nobody benefits" by acquiring money that they don't spend on consumption. But this is a naive view that ignores the role of risk, time and inter-generational concerns.

Re: G7: Rich nations back deal to tax multinationals

#460

Post by mohanmcgeek »

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…

> Google Ireland charges Google USA a license fee of 100% of the revenue they made.

This can be solved by placing a duty on large cross border IP fee transactions.

US is the country that's opposed to putting tariff on IP

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