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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

#661

Post by ncallaway »

BurningFrog wrote: post #571
ncallaway wrote: post #468

Earlier quoted context omitted.

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.

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

Well, it was completely arbitrary as it's serving as an example. I'm not saying my policy would literally be X Taxes and Citizens United, just using each as an example of the general class of things that I think should be linked.

I've seen corporate personhood used aggressively to argue that corporations should have more rights, but then when we're in a tax policy discussion, suddenly we are squeamish about anthropomorphizing corporations. My argument is that the amount that we anthropomorphize corporations should be equal whether our discussion is about rights (with free speech as one example) or about obligations (with taxation as one such example)

Re: G7: Rich nations back deal to tax multinationals

#662

Post by cm2187 »

jedberg wrote: post #629
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…

The agreement changes the way a company revenue is recognized and allocated between jurisdictions. I suspect it may require to change the tax treaties between those countries. It's not just changing the corporate tax rate.

Re: G7: Rich nations back deal to tax multinationals

#663

Post by dragonwriter »

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?

Reconciliation is a process within Congress by which the Senate does not impose its not-Constitutionally-required supermajority requirement to certain budget-impacting measures.

So, no, its use doesn’t bypass Constitutional powers (not rights, which are not attributes of government bodies) of Congress, it is a means by which Congress has chosen to exercise them.

Re: G7: Rich nations back deal to tax multinationals

#664

Post by ncallaway »

rufus_foreman wrote: post #660
ncallaway wrote: post #652

Earlier quoted context omitted.

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?

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

> Is that true?

Yep! Because a "deal" can be something that is provisional. "Reached a deal" to me doesn't in any way mean that the deal has been executed, finalized and is legally binding. It means the first step of negotiations has been completed and all parties are agreeing to the terms of the deal.

Look, we're just arguing about the semantics of how final "reached a deal" is. I think it's not very final (especially when discussing large multiparty negotiations like the ones described here). You seem to think it refers to an absolutely final step. That's fine! English is messy and we can disagree about what specific phrases mean. I'll just caution you that most of the world will use the phrase "reached a deal" to refer to negotiations that are preliminarily complete, but the terms not having been formally adopted or legally finalized.

For example the "Brexit deal" was "reached" on December 24, 2020 (https://www.cnn.com/2020/12/24/europe/brexit-deal-uk-eu-gbr-...).

The deal wasn't approved by the British parliament until December 30, 2020 (https://news.yahoo.com/uk-parliament-approves-historic-brexi...).

That deal went into effect on January 1, 2021.

However it wasn't "finalized" until it was also ratified by the EU parliament on April 28, 2021 (https://www.france24.com/en/europe/20210428-european-parliam...), nearly 5 months after it had gone into effect!

Re: G7: Rich nations back deal to tax multinationals

#665

Post by Ericson2314 »

marcosdumay wrote: post #576
rrrrrrrrrrrryan wrote: post #491

Earlier quoted context omitted.

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.

Yeah not sure what GP is saying. VAT can absolutely suck up a huge amount of money. The UBI makes it far less regressive, basically to the point I no longer care.

(VAT + UBI is great for everyone but those 90th percentile luxury-car-and-McMansion-owning inner ring suburb types that are the Democrat's favorite constituency :/)

Re: G7: Rich nations back deal to tax multinationals

#666

Post by dalbasal »

adrianb wrote: post #602
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…

Also it seems the agreement is that 7 countries agree that all countries in the world need to have that minimum rate? How would they convince the rest of 180+ countries? Especially, how do you convince the ones who would lose a lot of tax income by closing their tax heaven loopholes.

Dunno. They haven't actually agreed to minimum rates yet. They just said they might in future.

Broadly, you are not going to convince pure tax havens (eg Bermuda) to close tax loopholes. They don't even have corporate tax. You can do other things though.

Part of the problem here is that reporting is mixing up issues. It's not clear how (if at all) the MSFT-Bermuda shenanigans relate. The minimum tax rate hasn't been done yet, and may not be. What they do seem to have agreed on is some sort of joint accounting standards. Accounting standards define what counts or doesn't count as an expense, investment, etc.

Where that (may, we don't know yet) relate to the rest of 180+ countries is, for example: US accounting standards no longer recognize payments to (for eg) the Bermuda entity as an expense transaction.

When you are uncoordinated, discrepancies in these standards allow companies to pick and choose.

Re: G7: Rich nations back deal to tax multinationals

#667

Post by sagarm »

eloff wrote: post #440
PaulRobinson wrote: post #240

Earlier quoted context omitted.

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…

I remember my economics professor arguing that would be the most efficient tax after he explained how all taxes have the side effect of reducing the thing being taxed. So taxing something bad like CO2, great idea. Taxing something good like income or creating jobs - bad idea. Land tax would be simple, and very progressive, the tax rate of most young people renting world now be 0. It's more complex than that because t…

LVT has been tried in Pennsylvania, actually: https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...

It's worked well in some cities but been repealed in others because people were upset that mansions weren't taxed enough relative to smaller SFH.

Re: G7: Rich nations back deal to tax multinationals

#668

Post by alasdair_ »

reader_mode wrote: post #550
ncallaway wrote: post #262

Earlier quoted context omitted.

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.

> lead to double taxation

I’m not sure why double taxation matters so much. If I get a salary then use some of that salary to get a haircut, the money is taxed twice but we think of this as normal.

Human W2 taxpayers are not able to write off expenses such as driving to work (or even a home office), yet these are clearly costs of doing business. Why should corporations get additional rights that aren’t afforded to humans?

Re: G7: Rich nations back deal to tax multinationals

#669

Post by Ericson2314 »

rsj_hn wrote: post #567
pmalynin wrote: post #563

Earlier quoted context omitted.

Huh? How is it not unfair that, for example I can’t deduct rent from my income? A company would be able to do that. What about amortizing the cost of my domicile over 30 years? The personal exemptions are a sham and do not reflect the reality of high cost of living areas.

> How is it not unfair that, for example I can’t deduct rent from my income? Tax policy isn't set by moral arguments, it's set by government need for revenue which is then tweaked by political pressure groups. The reason why you can deduct mortgage interest but not rent has nothing to do with fairness, which is undefined and a massively ambiguous term, but because banks, which are the primary beneficiaries of mortgag…

Governments like the US today can borrow money or print it with very few constraints. Taxes are not primarily about raising revenue.

For small, opening (usually developing) economies the matter is different, and they should have more capital controls accordingly.

Re: G7: Rich nations back deal to tax multinationals

#670

Post by Ericson2314 »

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.

By "structural" I meant the material nature of the economy; the E.U.'s is certainly big and closed enough.

Yes, there is the straight-jacketted neoliberal constitution that makes everything terrible, but that's separate. I really hope they can fix that.

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