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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

#571

Post by BurningFrog »

ncallaway wrote: post #468
BurningFrog wrote: post #383

Earlier quoted context omitted.

The anthropomorphizing I speculate about goes something like this: "I work hard and pay my taxes, Ford makes billions and pay much less tax!" But Ford is an abstract entity that is not a person and doesn't have a better life than you. All those billions are eventually paid to living humans, who do pay taxes on that income. This is the economist perspective, but it requires a level of analysis not compatible with rage…

I’m 100% fine with that perspective. However, I think it means taking away other “anthropomorphic” rights from the entity. If you say: we’ll only collect taxes from the individuals that are paid by Microsoft, instead of taxing Microsoft, that’s fine by me. But, I would then say that Microsoft also doesn’t have free speech rights as a corporation, after all each individual in the corporation has free speech rights. If…

I think everyone can agree that companies should have both rights and obligations.

Linking taxation and free speech, among all possible rights and obligations, does seem completely arbitrary though.

Re: G7: Rich nations back deal to tax multinationals

#572

Post by a1369209993 »

dalbasal wrote: post #542
Ericson2314 wrote: post #411

Earlier quoted context omitted.

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.

> Only the ECB can "print" money

> expanding national debt

I feel the need to point out that currency debasement is a fundamentally different thing from taking out loans/issuing bonds/other debt. If anything, currency debasement reduces national debt in real terms, by devaluing the currency it's denominated in. I'm not especially clear on the situation, but I was under the impression that Greece's problem was that noone was willing to lend them money due to a expectation that they wouldn't be paying it back, not that they were prohibited from borrowing by EU law, but even that would be a different thing from being prohibited from printing money.

Re: G7: Rich nations back deal to tax multinationals

#573

Post by HideousKojima »

CameronNemo wrote: post #549
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.

And those executive agreements have no binding legal force, and can be broken by the next executive (or even the same executive who made them) on a whim. See, for example, the Iran deal and the Paris climate deal.

Re: G7: Rich nations back deal to tax multinationals

#574

Post by IG_Semmelweiss »

The actual laws on the books are more nuanced than posters would like to portray.

Google cannot sell something at 100% licensing fee cost, ie 0% margin.

There is a whole set of rules that govern cross border interco transactions under tax transfer pricing rules.

Google must by law reflect effective market markup in order to stay wothin the law. They cant just say "we are going to pay ireland 95% of sale price" and call it a day.

There is a whole analysis that needs to take place to show that the final applied margin is market.

The moment they dont , googles accountants will not sign off on financials, which starts another meltdown.

Yes, there is some estimate wizardy that goes on, but for the most part companies stay within the law because its very easy to show otherwise.

  Benchmarks are transparent.
Most of the upside is abroad because the IP is whats most valuable. Whatever shared-services google performs in the US to spread that IP around, are unsurprisingly low value and yiwld the corresponding taxes.

Re: G7: Rich nations back deal to tax multinationals

#575

Post by bpodgursky »

unreal37 wrote: post #284
antattack wrote: post #281

"The rules on making multinationals pay taxes where they operate - known as "pillar one" of the agreement - would apply to global companies with at least a 10% profit margin. " Tying tax rate to profit margin sounds like a loophole. For example - Hollywood Accounting[1] [1] https://en.wikipedia.org/wiki/Hollywood_accounting

Amazon ran at almost 0 profit for years, but then they ran out of ways to make the money disappear. Still, this would catch them.

In 2020 Amazon had revenue of $386 billion and profit of $21.33 billion, so no it would not. That's far under 10% (as expected for a retail seller).

Re: G7: Rich nations back deal to tax multinationals

#576

Post by marcosdumay »

rrrrrrrrrrrryan wrote: post #491
Ericson2314 wrote: post #329

Earlier quoted context omitted.

But then it's highly unfair to tax humans on revenue , but corporations on profit . I think the right answer is VAT + externalities taxes (LVT, Cabon tax, etc.) + UBI, which is both very easy to enforce and perhaps net progressive enough. Re "progressive enough": I don't so much care if BWM owners are screwed over relative to private jet owners on paper, I think reducing work hours and propping up demand at the botto…

VAT + LVT + misc. pigeovian taxes probably wouldn't be enough to power society as is, let alone fund a UBI. You could maybe replace income tax with a progressive consumption tax or a wealth tax, but you'd need to replace it with something.

Why can't VAT fund a modern government? The GP didn't say anything about the tax rates.

VAT's regressiveness would probably become a real problem in that situation, but that's a different problem.

Re: G7: Rich nations back deal to tax multinationals

#577

Post by [deleted] »

HideousKojima wrote: post #573
CameronNemo wrote: post #549

Earlier quoted context omitted.

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

And those executive agreements have no binding legal force, and can be broken by the next executive (or even the same executive who made them) on a whim. See, for example, the Iran deal and the Paris climate deal.

[deleted]

Re: G7: Rich nations back deal to tax multinationals

#580

Post by blibble »

ben_w wrote: post #248
amelius wrote: post #159

Earlier quoted context omitted.

> Probably the best solution is a minimum tax worldwide. Wouldn't that make companies pay taxes in countries they are based in (as opposed to where they make money)? Anyway this could be the push that the EU needed to start their own Silicon Valley.

> Anyway this could be the push that the EU needed to start their own Silicon Valley. Given the combined market caps of Apple, Microsoft, and Amazon (~$5.6T) is larger than the national net worth of all but the four largest EU countries, I don’t think there’s a lack of motivation here.

wealth and income are not comparable
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