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

Re: G7: Rich nations back deal to tax multinationals

#541

Post by bluecalm » Sat, Jun 05, 2021, 5:56 PM UTC

thinkloop wrote: post #54

hliyan wrote: post #37

Earlier quoted context omitted.

Good. I didn't think such a global minimum was politically possible. There was recently an article on HN where the author claimed that high tax rates don't impact high net worth individuals because they have already made their money. It just makes it harder for others to join the club. Perhaps what we need is a global maximum wealth (rather than income) cap, as a multiple of global median per-capita wealth. Perhaps s…

The problem is a wealth tax is almost impossible to implement. People will form crappy charities or put the money in their kids' names or move it to the Caribbean or some other gymnastics that will make worse use of the money overall.

There is one asset you can't hide - land. Tax that.

Re: G7: Rich nations back deal to tax multinationals

#542

Post by dalbasal » Sat, Jun 05, 2021, 5:58 PM UTC

Ericson2314 wrote: post #411

dalbasal wrote: post #203

Earlier quoted context omitted.

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. T…

And furthermore, I'd say however they harmonize the taxation shouldn't even matter, because the the G7 countries (or at least the euro ones acting zone wide) have no structural constraints preventing the money printer. The real important thing here is establishing the importance in preventing the race-to-the-bottom, so more important things like multinational carbon taxes, developing country capital controls, etc. ar…

IDK what you mean by "constraints preventing the money printer," but in the eurozone we have the opposite problem. Only the ECB can "print" money, or rather, only the ECB can create primary loans to national governments. National banks can't.

In practice, expanding national debt requires eurozone-wide unanimity. Ask Greece.

Re: G7: Rich nations back deal to tax multinationals

#543

Post by caymanjim » Sat, Jun 05, 2021, 6:00 PM UTC

rufus_foreman wrote: post #540

>> The G7 group of advanced economies has reached a "historic" deal to make multinational companies pay more tax No, it hasn't. Some finance ministers met and talked: "Finance ministers meeting in London agreed to battle tax avoidance by making companies pay more in the countries where they do business. They also agreed in principle to a global minimum corporate tax rate of 15% to avoid countries undercutting each ot…

Not every international agreement is a treaty. You're right, though; this is merely an agreement in principle and has no force whatsoever. That doesn't mean it won't lead to actual legal changes, but this article is misleading.

Re: G7: Rich nations back deal to tax multinationals

#544

Post by throwaway34241 » Sat, Jun 05, 2021, 6:01 PM UTC

jfengel wrote: post #470

throwaway34241 wrote: post #448

Earlier quoted context omitted.

No, a gross receipts tax is on sales and not profits. If I understand it correctly (I don't know the details for every state), a gross receipts tax doesn't even adjust for value added (the VA in VAT). For example say a few companies are involved in producing a good (starting from raw materials) so the supply chain looks like this: $7 (raw materials) -> $8 (components) - > $9 (finished good wholesale) -> $10 (store pr…

With a VAT each layer deducts the tax they pay. The net tax is only on the the value added. The company in the middle pays tax on $7 and collects tax on $8, and forwards the difference. It's very elegant and fair, but imposes a lot of accounting. Sales tax is easier in that it only collects at the end, but it's actually hard to define "end". (Buy a screw and you pay tax, buy a manufacturer buying the same screw usual…

It does add more accounting, but one advantage of involving the companies in the middle is it makes cheating harder and less lucrative, since a bunch of companies have to coordinate to avoid paying the VAT instead of just one company at the end.

Agree that VAT/sales taxes are regressive and shift more of the tax burden to lower-income people. Although the only US political candidate I can remember recently proposing a VAT was Yang in which case his UBI proposal would probably more than balance out the effects on after-tax income.

Re: G7: Rich nations back deal to tax multinationals

#545

Post by dalbasal » Sat, Jun 05, 2021, 6:02 PM UTC

542458 wrote: post #501

mohanmcgeek wrote: post #460

Earlier quoted context omitted.

> 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

There are lots of legitimate high-value cross border IP transfers, and since the US creates a lot of valuable IP it makes perfect sense that they’d oppose this.

Technically, we (the irish) create all that IP which we sell to American companies. People like Seamus Jobs and Paddy Wozniak made OSX and stuff, which is why Apple US pays Apple Ireland 100s of $bns to license it. MSFT's IP is Bermudan. Innovative little island.

Re: G7: Rich nations back deal to tax multinationals

#546

Post by 542458 » Sat, Jun 05, 2021, 6:06 PM UTC

bonzini wrote: post #528

542458 wrote: post #501

Earlier quoted context omitted.

There are lots of legitimate high-value cross border IP transfers, and since the US creates a lot of valuable IP it makes perfect sense that they’d oppose this.

But why do intra-company IP transfers have to be treated as actually moving money?

Two reasons: they’re not always actually intra company. Apple and Apple Ireland are different companies - and while intuitively it feels like you can just lump them together, it’s often much more complicated than that.

Second, because it is actually moving money. If I’m a Canadian software company that does most of its sales in the US through an American subsidiary (not uncommon), the way it works is the American subsidiary pays the Canadian company back for the sales of the Canadian company’s IP. Otherwise the money would never get back to Canada and the developers wouldn’t get paid! Furthermore, would be silly and tax-suboptimal to ignore the IP-money-flow and treat the Canadian company as nearly pure loss while treating the American one as nearly pure profit.

Re: G7: Rich nations back deal to tax multinationals

#547

Post by reader_mode » Sat, Jun 05, 2021, 6:06 PM UTC

elteto wrote: post #141

reader_mode wrote: post #123

Earlier quoted context omitted.

>Small software companies with customers all over the world are not multinational companies It's extremely common even for small software companies to have offices across the world

Then they already pay taxes there.

They might (probably not since the sales likely go through parent company) but that doesn't equate to paying taxes separately in each country you have customers in.

Re: G7: Rich nations back deal to tax multinationals

#548

Post by jacquesm » Sat, Jun 05, 2021, 6:08 PM UTC

srswtf123 wrote: post #485

jacquesm wrote: post #473

In other news, Amazon, Apple, Microsoft, Facebook, Twitter and a whole raft of other companies have just moved their headquarters to Nigeria.

Should be interesting for Twitter, since they’re now banned in Nigeria? ;)

No, that's perfect. Absolutely no way to get into conflict with the local rulers. And no way for the locals to discuss the unavoidable corruption.

Re: G7: Rich nations back deal to tax multinationals

#549

Post by CameronNemo » Sat, Jun 05, 2021, 6:08 PM UTC

rufus_foreman wrote: post #540

>> The G7 group of advanced economies has reached a "historic" deal to make multinational companies pay more tax No, it hasn't. Some finance ministers met and talked: "Finance ministers meeting in London agreed to battle tax avoidance by making companies pay more in the countries where they do business. They also agreed in principle to a global minimum corporate tax rate of 15% to avoid countries undercutting each ot…

The executive is allowed to make executive agreements without consent of congress.

Re: G7: Rich nations back deal to tax multinationals

#550

Post by reader_mode » Sat, Jun 05, 2021, 6:10 PM UTC

ncallaway wrote: post #262

reader_mode wrote: post #113

Earlier quoted context omitted.

You aren't paying taxes on revenue, you pay tax on profit

That’s a choice, and one we could change. My company is taxed on revenue (under the Washington State B&O tax scheme, and similar local tax schemes). Taxing based on revenue is viable, it just needs to be done with a little more care up front.

Taxing revenue would kill small margin high input businesses, lead to double taxation, encourage vertical integration. Makes no sense outside of small business where they get a heavily discounted rate since it's usually there to save them the hassle of keeping expenses.