711–720 of 931 posts
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The executive is allowed to make executive agreements without consent of congress.
In the US, executive orders cannot change tax law, since the "power of the purse" is constitutionally reserved for congress. If you're thinking of the Iran nuclear deal, that's head-of-state stuff where the president is considered to have more powers (though of course it still was never a treaty, so could be/was scrapped easily by the next administration).
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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…
Your analogy is flawed because you seem to be assuming that the people with execution authority are the ones who reached an agreement in principle. You’d expect them to succeed in papering it up. That’s not the case here. The agreement in principle was reached by someone who has no power to do anything with regards to corporate taxes. Congress sets U.S. tax law and agrees to treaties. To do that, you need 60% or 66%…
1. The finance ministers reach an agreement. This is what has happened.
2. A treaty is written and signed, normally by the head of state, but sometimes by the head of government (for the US in both cases the President). At this point the treaty in not yet legally binding, although according to international law the signatory country has an obligation "to refrain, in good faith, from acts that would defeat the object and the purpose of the treaty."[1]
3. The parliament (for the US the Senate) ratifies the treaty, making it binding.
4. The parliament (House and Senate in the US) creates the necessary national legislation to implement the provisions of the treaty.
5. The government creates the secondary legislation for the application of the national legislation created at 4.
Usually after 2. the other steps follow more or less smoothly, but there are some high profile cases where the ratification never happened (e.g. the Kyoto protocol).
[0] https://treaties.un.org/pages/overview.aspx?path=overview/gl...
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> Nobody benefits from a company growing indefinite wealth without distributing it to actual people. Isn't this exactly what companies like Apple etc. are doing? As it accumulates wealth, the stock price (which is supposed to reflect the value of the company) goes up as well. And thus the shareholders benefit.
I believe actual cash hoards on hand is considered bad business. Apple having cash on hand is seen as okay, at present, because investors trust them to spend it well on expansion. Remember share price doesn’t indicate how well a company is doing today , it indicates how well people believe it will do In the future . If you have piles of cash and don’t plan on spending it, somehow, on your business then you can’t expe…
The more cash they gather, the higher the lower bound of the share price.
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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…
Simplify the tax code and there will be no loop holes.
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> But then it's highly unfair to tax humans on revenue, but corporations on profit. Wow, it's a good thing we don't do that. Good news, the income you spend to further your business is deductible. We include a personal exemption for generic costs, child exemptions, mortgage exemptions, healthcare cost exemptions, retirement savings exemptions, and numerous others. Additionally, the whole concept behind a progressive…
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.
For a house, your net worth hasn't decreased by the cost of the house. A company wouldn't be able to deduct that. They can deduct for assets that depreciate.
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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.
For example ACME Inc. produces widgets with costs of 50 and revenue of 100 in the US. To avoid taxes, it also pays 50 in "licensing fees" to ACME Tax Heaven in the Cayman Islands, so that the profit in the US is 0.
If the payment to the Cayman Islands is not counted, then the taxable profit in the US becomes 50.
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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 hu…
For example, if you have one tax there is only one way to optimize it, if you have two taxes there are two ways to optimize it. As you add more taxes you are adding more room for loopholes. Solving the problem by taxing profit by country is just adding more room for loop holes.
Summary: > 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. > Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits. Good. It’s a shame that Biden had to back down from the initial 28% because of do…
I agree with the minimum tax rate. But I think the criterion for taxing profits should not be where the products are sold (for that, we have the sales tax or the VAT). The right criterion is where the value is created, which is usually the country where the most expenses/employees are. For example, if an Australian mining company digs up iron ore and sells it to China, it would seem unnatural to tax the company's pro…
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> 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.
Isn't ratifying a treaty something completely different?
But it could be an informal agreement between the leaders of these countries, that they will all pass such laws. In that case, passing a law that changes the corporate tax rate would fit into a reconciliation package with no issues.
Though, if it’s an informal agreement then no such law even needs to be passed, since our corporate tax rate is above the agreed minimum.
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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.
I get a tax rebate for rent. Maybe it depends where you live. For a house, your net worth hasn't decreased by the cost of the house. A company wouldn't be able to deduct that. They can deduct for assets that depreciate.