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

Re: G7: Rich nations back deal to tax multinationals

#581

Post by marcosdumay » Sat, Jun 05, 2021, 6:55 PM UTC

dehrmann wrote: post #449

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…

> ...dividends and buybacks create income for individuals who will pay tax on that income) This is an important point people miss. The owners of those companies eventually pay taxes on the profits, so a corporate tax is a double tax. There are a lot of things that get taxed: property, income, sales, corporate profits. You can vary these rates and still come up with a viable government revenue model. Oregon doesn't ha…

> The owners of those companies eventually pay taxes on the profits, so a corporate tax is a double tax.

Will they? Countries have a wide set of positions from "tax only corporate income" to "tax only dividends", with a lot of them sizing both taxes taking the other one into account.

Re: G7: Rich nations back deal to tax multinationals

#582

Post by nohuck13 » Sat, Jun 05, 2021, 6:56 PM UTC

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.

I agree with your main point but I wouldn't say executive orders lack binding legal force. They derive binding legal force from congress or the constitution first telling the executive branch "you go figure out the details here."

Foreign policy.

The SEC.

Heck, the emancipation proclamation was an executive order. Everyone knew Lincoln and his contemporaries wanted to abolish slavery, but Lincoln was absurdly careful at the time to frame the proclamation as a wartime measure aimed at crippling the south's economy. He went out of his way to appeal to existing commander-in-chief powers in order to make it lawful.

Re: G7: Rich nations back deal to tax multinationals

#583

Post by a1369209993 » Sat, Jun 05, 2021, 6:56 PM UTC

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. Suddenly, Google USA has net profit of 0 and Google Ireland has a large net profit.

That's irrelevant; Google USA made a gross profit of X G$ and should be taxed accordingly. If they want to claim some of that as a tax-deductable business expense, the burden of proof[0] is on them to demonstrate that it's a legitimate business expense.

0: If accused of tax evasion, the burden of proof would on the IRS to demonstrate that they intentionally misreported and should suffer criminal penalties, but if they're innocent, they still owe back taxes plus nominal interest.

(Edit: In case it wasn't obvious, I'm talking about what the law should require, not what laws paid for by corporations currently do.)

Re: G7: Rich nations back deal to tax multinationals

#584

Post by lostcolony » Sat, Jun 05, 2021, 6:57 PM UTC

bumby wrote: post #429

lostcolony wrote: post #340

Earlier quoted context omitted.

I'm not entirely sure why you think what corporations -prefer- matters when it comes to a discussion on taxation?

Well they have a right to petition the government in the US at least. Would you say the same about what citizens prefer does not matter in a representative democracy?

Citizens tend to be all over the place when it comes to taxation. Traditional corporations are pure profit seeking entities. What they would -prefer- is to pay no taxes at all, while benefiting from all tax paid services they can. So I'm not really sure, given we're talking hypotheticals here anyway, that designing a system to tax corporations based on what they -prefer- is really going to get us anywhere. The current system, whereby many major corporations pay nothing in taxes, while benefiting from major government subsidies, directly and indirectly, is already pretty close to what they'd -prefer-.

Re: G7: Rich nations back deal to tax multinationals

#585

Post by pirate787 » Sat, Jun 05, 2021, 6:58 PM UTC

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…

This is a terrible solution because it eliminates tax competition between states. The corporate tax rate should be zero-- that is the best solution, as it would free up all of this ridiculous accounting and financial compliance machinery for actual productive uses. Corporate profits are already taxed at the individual owner-level as a capital gain or dividend. The corporate income tax is grand-standing political tax with no basis in science or economics.

Re: G7: Rich nations back deal to tax multinationals

#586

Post by jfengel » Sat, Jun 05, 2021, 6:58 PM UTC

throwaway34241 wrote: post #544

jfengel wrote: post #470

Earlier quoted context omitted.

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…

VAT plus UBI does save problems for the poor, but it's still regressive. The net effect is to put the main burden on the middle class.

Re: G7: Rich nations back deal to tax multinationals

#587

Post by Analog24 » Sat, Jun 05, 2021, 7:00 PM UTC

throwkeep wrote: post #579

> The deal announced on Saturday, between the US, the UK, France, Germany, Canada, Italy and Japan, plus the EU If all these nations can strike this kind of deal, won't they do the same with Bitcoin to render it useless?

What would such a deal look like? I'm not sure how much they can do to a decentralized entity. There are certainly things they could do but I don't think it can be as effective as if it was a central entity like a corporation.

Re: G7: Rich nations back deal to tax multinationals

#588

Post by floren » Sat, Jun 05, 2021, 7:01 PM UTC

cal5k wrote: post #556

Tostino wrote: post #519

Earlier quoted context omitted.

What a reductionist view of things. No one serious is arguing for that.

Top marginal income tax rates in many countries now exceed 50%, not even considering payroll tax, property tax, sales tax, etc. The question is: how can anyone seriously support tax rates that high? After a certain level, more than half your time is spent working for the government - failure to pay means fines and possible jail time. This is serfdom. Higher corporate tax rates should not be applauded by anyone. Highe…

Between 1951 and 1963, the highest marginal tax rate in the US exceeded 90% [0]. This is a period of time generally regarded as one of booming economic growth in the US, an exceptionally good time to be in the middle class, and a time span looked upon fondly by your stereotypical American conservative.

Edit: Why do people put up with it? Because of the progressive tax system. If my choices are a) earn $517k b) earn $1m but get taxed 37% on everything over $518k, I know what I'm picking. (Numbers come from the 2020 US tax brackets)

[0] https://www.taxpolicycenter.org/statistics/historical-highes...

Re: G7: Rich nations back deal to tax multinationals

#589

Post by layer8 » Sat, Jun 05, 2021, 7:01 PM UTC

usrusr wrote: post #520

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…

So true. It's a fixing the algorithm vs tweaking some parameters situation. PS: if I were to design a state I would make it a part of the constitution that laws must either be written with placeholder variables for any concrete numbers you'd want to put into them or specify only concrete values for those placeholders and nothing else. And no single vote can contain both kinds at once.

Parameters vs. algorithms is really a spectrum though. Just ask the lispers. ;)

Re: G7: Rich nations back deal to tax multinationals

#590

Post by lazyeye » Sat, Jun 05, 2021, 7:02 PM UTC

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…

Could they create a special category for the clearly profitable tech titans where they are taxed simply on local turnover regardless of whatever legal accounting bullshit they use to avoid paying tax?