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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

#651

Post by ben_w »

rmah wrote: post #480
ben_w wrote: post #248

Earlier quoted context omitted.

> 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.

[edit] "all but the four largest"... my bad, I misread. Not sure why comparing mega-corps to small nations has much value though. Not sure where you got your info, but I'm afraid it seems inaccurate. The total wealth of the four largest EU nations, as of 2019, are as follows: Germany: $14.7T UK: $14.3T France: $13.7T Italy: $11.37T Just FYI, the three wealthiest nations are: the US at $106T, China at $64T, and Japan…

> my bad, I misread. Not sure why comparing mega-corps to small nations has much value though.

No worries, it happens to all of us from time to time :)

As for why… the context is just that EU motivation was being discussed.

(Otherwise I would’ve said something like “Those three companies combined are valued more highly than the entire continent of Africa!”)

Re: G7: Rich nations back deal to tax multinationals

#652

Post by ncallaway »

rufus_foreman wrote: post #603
ncallaway wrote: post #593

Earlier quoted context omitted.

You're referring to the process of finalizing a treaty. That would be conceptually similar to "executing" an agreement between parties—the most important step that makes it legally binding! But "reaching a deal" and "executing the agreement" are often different steps. When we have discussions with a client, and we negotiate on the terms we can reach an agreement on the negotiation before we actually execute the contr…

>> 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…

Assume we’re going back and forth in negotiations. After a few back and forth a, with small changes each time, I send you over some language and you say: “That’ll work, I’ll draw up a contract and send it over to you”.

At that point, I would tell people internally to my company that we have a deal with that client.

But we don’t count on that revenue arriving, until we have a signed contract in place. Anything can happen between the negotiation and the contract being signed. The client could come back to us and say “there’s been a sudden change in priorities on our end, and we’re cancelling the project”. Or they might come back with any other change that they want “when I sent this to my VP, he said the top line number wouldn’t work, and we need to move it again, I’m so sorry!”

Yes, we don’t consider anything to be legally binding until the contract is signed. We “had a deal”, but deals can fall through.

If you deal in any contract worth more than a few hundred dollars, I really recommend you take the same attitude: everything is provisional until the final agreement is written down and signed.

> Which car company do you work for?

Was that necessary? Really? You can make your point without attempting to attack people.

Re: G7: Rich nations back deal to tax multinationals

#653

Post by ncallaway »

rufus_foreman wrote: post #642
toomuchtodo wrote: post #631

Earlier quoted context omitted.

Reconciliation requires no Republican votes. https://www.brookings.edu/blog/up-front/2021/02/05/what-is-r...

You think the Constitutional right of Congress "To lay and collect Taxes, Duties, Imposts and Excises" can be wiped out with reconciliation?

To be clear, Constitutionally the United States Senate only needs a majority to pass a law that changes the Taxes collected from corporations.

The Senate Filibuster which requires a 60-vote majority is not a Constitutional provision, and you wouldn't strictly need a Treaty for this agreement, if all the countries simply adopted the same tax provisions.

So, if the Democrats had the vote for it, they could pass this law with 0 Republican votes. In fact, since raising taxes is a budgetary measure, they could absolutely pass the corporate tax increase on reconciliation and do it with 0 Republican votes and without touching the filibuster. So, it seems quite plausible to me that this will happen.

Re: G7: Rich nations back deal to tax multinationals

#654

Post by ncallaway »

rsj_hn wrote: post #639
toomuchtodo wrote: post #631

Earlier quoted context omitted.

Reconciliation requires no Republican votes. https://www.brookings.edu/blog/up-front/2021/02/05/what-is-r...

You are not going to ratify a treaty with the required 2/3 votes in the Senate via reconciliation.

You don't need to ratify a treaty through reconciliation. There's no need for this to be done with a formal treaty. It could simply be each of the nations passing laws that do the same thing.

If the Senate passes a law that changes the corporate tax rate to a certain amount, that is a budgetary measure that could absolutely be passed with reconciliation.

Yes, this law wouldn't be a treaty, but it could have a similar effect.

Re: G7: Rich nations back deal to tax multinationals

#655

Post by YZF »

rufus_foreman wrote: post #625
YZF wrote: post #616

Earlier quoted context omitted.

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.

I'm not sure why Canada imposing a tax on Google's revenue in Canada requires US Republican votes? Or what the Republicans would do about it? So seems like we can get a lot of things done without those votes. Most of these companies are US based and they are effectively dodging taxes in other countries, it's not the US tax laws that impact those for the most part.

Re: G7: Rich nations back deal to tax multinationals

#656

Post by stdbrouw »

rufus_foreman wrote: post #625
YZF wrote: post #616

Earlier quoted context omitted.

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.

The US corporate tax rate is 21%, above the 15% minimum that was proposed. Furthermore, it was the Trump administration who introduced GILTI and BEAT, both measures aimed at taxing foreign profits in low wage and low tax countries. Now, of course, republicans are probably loathe to give the White House any "wins", so that might throw a spanner in the works, but republicans don't have any love for tax havens.

Re: G7: Rich nations back deal to tax multinationals

#657

Post by dalbasal »

saddlerustle wrote: post #623
dalbasal wrote: post #545

Earlier quoted context omitted.

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

How does Apple's money get to Ireland in the first place? I haven't read those filings (not gonna either, I have drinking to do), but I was under the impression that it was IP licensing.

Google Ireland takes payment directly. Unless they've changed recently, all non-US adwords invoices are paid to here.

Repatriation to pay dividends is fairly moot, since they don't pay dividends. Maybe this is one of the reasons buybacks are preferred.

Re: G7: Rich nations back deal to tax multinationals

#658

Post by dragonwriter »

rufus_foreman wrote: post #625
YZF wrote: post #616

Earlier quoted context omitted.

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.

> To get anything done, you need Republican votes.

This seems to be the kind of financial thing that fits right into reconciliation, which means you don't need Republican votes.

Re: G7: Rich nations back deal to tax multinationals

#659

Post by rsj_hn »

toyg wrote: post #250
etherael wrote: post #230

Earlier quoted context omitted.

It's one thing to get G7 to agree on something when they're literally in the same club, another to get their client states that might previously have been attractive options like Ireland or Estonia to get on board to some degree. But jurisdictions that are much more independent and less prone to leverage like Georgia or Malaysia on the other hand I just don't see it. And that's before you get off into the weeds of ju…

Low-tax countries in the EU are being ruthlessly isolated already. This has been happening for some 15 years now, and accelerated after Brexit; covid might well be the nail in the coffin. I am also sceptical of your claim that jurisdictions like Georgia and Malaysia are "less prone to leverage" - their proximity to large adversaries actually makes them more dependent on soft-power diplomacy to maintain big friends. O…

> Low-tax countries in the EU are being ruthlessly isolated already.

In what way? How is life for anyone in say Ireland or the Netherlands or the Bahamas materially different than, say, 20 years ago? Are they not allowed to travel somewhere? Obtain visas? Purchase goods and services from abroad? Are airlines refusing to land there? Even a single example of this "ruthless isolation" would be nice to show, otherwise, I suspect this is more of a dream sequence than a description of reality.

Re: G7: Rich nations back deal to tax multinationals

#660

Post by rufus_foreman »

ncallaway wrote: post #652
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…

Assume we’re going back and forth in negotiations. After a few back and forth a, with small changes each time, I send you over some language and you say: “That’ll work, I’ll draw up a contract and send it over to you”. At that point, I would tell people internally to my company that we have a deal with that client. But we don’t count on that revenue arriving, until we have a signed contract in place. Anything can hap…

"everything is provisional until the final agreement is written down and signed"

Here's what I read:

"The G7 group of advanced economies has reached a historic deal to make multinational companies pay more tax"

Is that true?

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