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

Re: G7: Rich nations back deal to tax multinationals

#621

Post by elitan » Sat, Jun 05, 2021, 7:52 PM UTC

marcosdumay wrote: post #570

cal5k wrote: post #556

Earlier quoted context omitted.

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…

> Top marginal income tax rates in many countries now exceed 50% You mean, for people right? I have never heard about any place that taxes anywhere near 50% of a corporation revenue, but yeah, it's not rare to find places that tax more than 50% of a worker's income (all taxes in, if you are talking exclusively about income tax, I never heard about it either). Why do corporations need lower taxes than individuals?

Because corporations would move.

Individuals don't move as much. So they are in a much worse negotiation position.

Re: G7: Rich nations back deal to tax multinationals

#622

Post by nearbuy » Sat, Jun 05, 2021, 7:52 PM UTC

edoceo wrote: post #557

HWR_14 wrote: post #504

Earlier quoted context omitted.

How did the money change hands in Britain? The British person typed his CC number into a web form that routed to a server in the Cayman Islands that charged a bank in France. That bank in France will then demand repayment at the end of the month from the guy in Britain.

The demand side actor is the driver of the transaction.

So if you had a completely Australian company selling stuff online, they'd be subject to US corporate tax for profit earned from American customers, French tax for customers from France, etc?

This seems complicated because unlike sales tax, corporate tax is based on profit at the end of the year. It's much more complicated than sales tax. Companies would have to handle corporate tax code for up to 195 countries.

Re: G7: Rich nations back deal to tax multinationals

#623

Post by saddlerustle » Sat, Jun 05, 2021, 7:55 PM UTC

dalbasal wrote: post #545

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.

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.

That's not how it works at all. Apple Ireland is used to defer taxation on non-US sales, but those profits still needs to be eventually repatriated in order to pay out dividends and fund US R&D, which is the majority of its fixed costs. Profits from US sales stay in the US, and on net Apple Ireland pays Apple US 10's of billions a year.

You can see their filings here: https://core.cro.ie/e-commerce/company/112189

Re: G7: Rich nations back deal to tax multinationals

#624

Post by dennis_jeeves » Sat, Jun 05, 2021, 7:56 PM UTC

PaulRobinson wrote: post #240

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 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…

>World would be a great deal simpler if globally we moved to a Henry George system

Yes it would, but you see that will not be popular for many obvious reasons ( less jobs for tax collectors/consultants/auditors etc.) A more non-obvious reason is that the ordinary Joe on the street hates the rich so much that he wants the rich being taxed rather than see the simplicity of taxing no one.

>His ideas are now considered eccentric,

He actually seems a level headed guy to me :)

I would go even one step ahead and say that even land should not be taxed except for the cost of keeping land records.

Re: G7: Rich nations back deal to tax multinationals

#625

Post by rufus_foreman » Sat, Jun 05, 2021, 7:56 PM UTC

YZF wrote: post #616

rufus_foreman wrote: post #603

Earlier quoted context omitted.

>> After reaching satisfactory terms in the agreement, I need to run the agreement by my business partner and ensure he approves Do you think Mitch McConnell sees US Treasury Secretary Janet Yellen as his business partner? Or vice versa? That's your perception? >> The G7 has reached a deal—that doesn't mean the deal is now effective or legally binding So if I'm negotiating with you and you tell me we have a deal, I s…

There's all sorts of outcomes here. While you may be right that the US will not sign on to the deal it might still have to deal with some consequences. E.g. while Yellen may not have the ability influence US tax laws there are also foreign tax laws that are part of this over which McConnell has no control. Let's say the rest of the G7/G20/OECD changes the way they tax global companies, if the US doesn't ratify their…

>> I think Yellen's agreement does count as in this is the US's (sort of foreign policy?)

No it doesn't work like that.

To get anything done, you need Republican votes. I have no idea, I haven't checked this afternoon, how many Republican votes do you have for a minimum corporate tax?

That's what I want to know, I'm guessing it is zero, but let me know what the number is.

Re: G7: Rich nations back deal to tax multinationals

#626

Post by wolverine876 » Sat, Jun 05, 2021, 7:59 PM UTC

rufus_foreman wrote: post #619

wolverine876 wrote: post #605

Earlier quoted context omitted.

> in the US, finance ministers don't have the power to agree to treaties The U.S. Secretary of the Treasury speaks for the President; it's a fundamental dynamic of organizations. Otherwise, effectively Yellen wouldn't be Treasury Secretary - Yellen would be powerless and meaningless - and would resign or be fired. Only Trump seemed to ignore this and undermine the people under him. Also, I expect that the Treasury Se…

Here's what it says in the Constitution: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises" Crystal clear.

There is far more to U.S. government than the Constitution, which is only a framework. There are an enormous body of law, court precedents, institutional customs, federalized government, and of course public opinion.

Among that body of law are existing tax rates, which are currently over 15% for corporations. Under the Constitution, the President must agree to changes in tax rates unless their veto is overridden.

You're right that Congress theoretically could violate the agreement, but in practice, it's almost irrelevant. They could theoretically pass a bill tomorrow that eliminates every tax and every law in the U.S.

Re: G7: Rich nations back deal to tax multinationals

#627

Post by codetrotter » Sat, Jun 05, 2021, 8:04 PM UTC

a1369209993 wrote: post #611

codetrotter wrote: post #67

Earlier quoted context omitted.

https://www.wolframalpha.com/input/?i=y+%3D+10000+*+0.99%5Ex... It will then take slightly over 229 years until the multiplier has shrunk from 10,000 to 1,000. After another 229 years the multiplier will have shrunk another order of magnitude, from 1,000 to 100. And it makes sense mathematically that if it shrinks an order of magnitude in the first 229 years then it will shrink another order of magnitude in the next…

I mean, that clearly doesn't seem reasonable long-term to any mathematically literate layperson, since after ~917 years, the maximum wealth would be less than the median. (10'000x * .99^917 = 99.42%) But I suppose it's not like it'll last that long before corruption sets in anyway.

I was more thinking like, we stop at 1 or some point before that.

Re: G7: Rich nations back deal to tax multinationals

#628

Post by [deleted] » Sat, Jun 05, 2021, 8:05 PM UTC

sbacic wrote: post #493

zmk_ wrote: post #430

Earlier quoted context omitted.

They still would hire domestically and pay salaries that would be taxed.

They'd need to grow to a certain size first and even then, they could just hire remotely. My hope is that these rules will only apply to large multinationals but somehow I doubt it - governments are unlikely to leave money on the table and will likely use this opportunity to expand the scope to include smaller businesses as well.

[deleted]

Re: G7: Rich nations back deal to tax multinationals

#629

Post by jedberg » Sat, Jun 05, 2021, 8:05 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…

An agreement can be reached without a treaty. But that's not even super relevant here.

The US doesn't need to change any laws to meet this agreement. We already tax our corporations more than 15%. What the US wants is for other countries to tax that much, to discourage our own multinationals from booking revenue outside the US to avoid US tax. The EU wants companies to book revenue where they make it, which they can do all on their own. They don't need the US for that.

And what makes you think the GOP wouldn't support this? It would give them cover to lower the tax rate to 15% from 21% to "be in line with the rest of the G7". Also, if our multinationals can't avoid tax anymore, there is a good chance they would just book their revenue here in the US, leading to more revenue for the US and less for Europe.

Re: G7: Rich nations back deal to tax multinationals

#630

Post by edgyquant » Sat, Jun 05, 2021, 8:07 PM UTC

larsiusprime wrote: post #450

edgyquant wrote: post #350

Earlier quoted context omitted.

But an LVT isn’t a tax on the infrastructure it is a tax on the value of the underlying land.

It's the proximity to Google's economic activity that makes the land valuable. A plot of land right next to the Googleplex that has nothing on it is immensely more valuable than an equally sized plot of land in the middle of the Nevada desert.

Sure this is true, but this also one of things Georgism seeks fix (land speculation.) A georgist LVT appraises land based on the intrinsic value of the resources it contains and not what is build on it. In fact it seeks to fix “land hoarding” to incentivize productive land. Under a proper LVT it would be really expensive for e.g. one person to own 100 acres of land they aren’t utilizing to it’s true economic potential.