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

Re: G7: Rich nations back deal to tax multinationals

#731

Post by usrusr » Sat, Jun 05, 2021, 10:12 PM UTC

clairity wrote: post #598

usrusr wrote: post #520

Earlier quoted context omitted.

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.

rather than simple placeholder variables, we should employ placeholders for smoothly continuous functions over the relevant parameter space. for taxes, the parameter space might include revenue and profit, over which the tax is smoothly continuous. discontinuities just beg to be exploited.

Yeah, this is basically what got me to that idea of separating formula from parameter: whenever politics should care about some quality of a formula, it gets completely drowned in the noise of people screaming at each other trying to drag the parameters one way or the other. As evidenced by every single discussion about UBI. Sometimes the formula still turns out ok, but far too often not ok at all.

It was in my second or third programming side job when I was asked by the ramshackle finance marketing upstarts I was working for if it was possible to implement the almighty Income Tax Table (in Access, obviously). I had heard scary things about that beast. A few minutes of googling (I think was already Google?) and I realized that the law in question defined a simple linear factor that increases at certain thresholds, with a tax-exmpt base per threshold to correct for any jumps. I was so disappointed! Not so much by a scary mad beast that turned out to be all tame and reasonable but by the professions of finance marketers and tax consultants who routinely acted as if it was some arbitrary monstrosity that could only be dealt with in a lookup table.

Re: G7: Rich nations back deal to tax multinationals

#732

Post by rufus_foreman » Sat, Jun 05, 2021, 10:16 PM UTC

AlwaysRock wrote: post #637

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…

>> So if I'm negotiating with you and you tell me we have a deal, I should consider that to be something that may or may not happen, may or may not be effective, and may or may not be legally binding? I hope you don't touch contracts in your job. Until a contract is signed nothing is official.

OK. Until a contract is signed, something is not a "historic" deal, is that right?

Re: G7: Rich nations back deal to tax multinationals

#733

Post by saddlerustle » Sat, Jun 05, 2021, 10:30 PM UTC

dalbasal wrote: post #729

saddlerustle wrote: post #704

Earlier quoted context omitted.

> Once the cash is in Bermuda, the game is done. The Bermuda company can hold it, buy shares, etc. A Bermuda subsidiary can't repurchase shares in the US parent company without booking those profits in the US.

Then I suppose then I'm missing the last part of the trail. Enough tax study for me. No more.

Broadly, the point of these tax structures for US companies isn't for the company to completely avoid paying US corporate tax, it's to

- Avoid paying corporate tax at a higher rate than in the US, and

- Defer paying corporate tax, often for decades, until theres a more favourable tax situation in the US, or a better opportunity to reinvest their capital comes up.

At the end of the day the profits belong to the shareholders and the only way to return the money to shareholders is by paying US corporate tax. Shareholders usually don't mind these arrangements because the tax savings is often more than the cost of capital having the money sitting unproductively.

Re: G7: Rich nations back deal to tax multinationals

#734

Post by tacomonstrous » Sat, Jun 05, 2021, 10:33 PM UTC

rufus_foreman wrote: post #648

wolverine876 wrote: post #626

Earlier quoted context omitted.

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…

No. The United States Constitution is not "only a framework".

You're good with getting rid of the filibuster then?

Re: G7: Rich nations back deal to tax multinationals

#735

Post by briandear » Sat, Jun 05, 2021, 10:34 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…

> They also agreed in principle to a global minimum corporate tax rate of 15% to avoid countries undercutting each other.

Why? If a country can be more efficient, why must they be penalized by being required to raise taxes? This is the equivalent of a price floor. Why should a country be required to have higher taxes to appease those that make different policy decisions? It should be up to the government (voters) what tax rates work for their country. Why wouldn’t a tax rate ceiling be proposed instead? Why should Ireland raise taxes just because France wants to run huge healthcare deficits or offer extremely generous train worker pensions? Seems like decisions on tax rates should be left to the country. If a country wants a 50% tax rate, that’s their business. If they are economically harmed by someone else having a 10% rate, then the problem isn’t that someone else has a lower cost but that they have too high a cost.

As far as the 2/3 rule for US treaties, that’s a good thing. That ensures that treaties are good for the entire country rather than just a simple majority. I don’t want 51% being able to ignore 49%. If Republicans were in power and proposed a maximum tax rate treaty, those complaining about the 2/3 rule would be singing a different tune. The Constitution was designed specifically to ensure that a narrow majority isn’t able to run roughshod over everyone else. Gridlock is a feature, not a bug. And that feature benefits everyone at different times.

Re: G7: Rich nations back deal to tax multinationals

#736

Post by wolverine876 » Sat, Jun 05, 2021, 10:38 PM UTC

rufus_foreman wrote: post #648

wolverine876 wrote: post #626

Earlier quoted context omitted.

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…

No. The United States Constitution is not "only a framework".

Could you provide something to backup your statement?

As further examples of my point, beyond the laws, legal precedents, customs, and institutions mentioned above: None of the executive branch departments (State, Justice, Defense, Treasury, etc.) are mentioned in the Constitution. No federal court besides the Supreme Court is mentioned. Even specific laws are only loosely defined; for freedom of speech, no provision is made for slander, fraud, harassment, government secrets, etc.; for the right to bear arms, nothing defines what 'arms' are (and I don't suggest we try to define them here). The filibuster and other Congressional rules are not defined. Etc.

Re: G7: Rich nations back deal to tax multinationals

#737

Post by skissane » Sat, Jun 05, 2021, 10:48 PM UTC

occamrazor wrote: post #712

rayiner wrote: post #645

Earlier quoted context omitted.

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%…

There are actually many steps. In this case: 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 f…

> 3. The parliament (for the US the Senate) ratifies the treaty, making it binding.

Under international law, ratification happens when a state’s international representatives (head of state, ministers, ambassadors) formally lodge instruments of ratification with the depositary. (See Article 2(1)(b), Vienna Convention on the Law of Treaties.) When the US Senate "ratifies" a treaty, that is not ratification under international law, that is a domestic legislative procedure which confusingly happens to have the same name.

Under international law, legislatures are not involved in ratification, only the state's international representatives are (which almost universally belong to its executive). Domestic law may require those representatives to consult or seek approval from the legislature, but international law mostly (but not entirely) doesn't care about those requirements.

Re: G7: Rich nations back deal to tax multinationals

#738

Post by walshemj » Sat, Jun 05, 2021, 10:49 PM UTC

gambiting wrote: post #558

tazjin wrote: post #517

Earlier quoted context omitted.

This only works until you make ~100k GBP or have "complicated" income (e.g. shares instead of cash), which people in our industry hit very easily.

I'd argue about the "very easily" point for IT workers in the UK, as 100k+ salaries are very rare, and if you get shares instead of cash it's still taxed as income and doesn't trigger a self assessment. Only if you hold onto them and only if you make more than the capital gains threshold, you have to fill out a self assessment. But in either case - sure, but the system means absolutely no worries about your tax retur…

Normally shares are not taxed as income in the UK dependent on how they are structured -dividends are though.

To follow on it is easy to hit the limit on dividend allowance if you have shares outside of your ISA

Re: G7: Rich nations back deal to tax multinationals

#739

Post by skissane » Sat, Jun 05, 2021, 10:50 PM UTC

wolverine876 wrote: post #607

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…

> You're referring to the process of finalizing a treaty. That would be conceptually similar to "executing" an agreement between parties It's not even that. Most international agreements are executed without a treaty.

> It's not even that. Most international agreements are executed without a treaty.

Only in the US (and possibly a handful of other countries which copy the US approach). Under international law, all legally-binding international agreements are treaties. What the US calls "international agreements" are treaties from the non-US point of view.

Re: G7: Rich nations back deal to tax multinationals

#740

Post by briandear » Sat, Jun 05, 2021, 10:50 PM UTC

briane80 wrote: post #389

gambiting wrote: post #343

Earlier quoted context omitted.

In the UK if you're in full time employment and only have one job, then there's literally nothing to do. Not even clicking somewhere to approve your tax return - your employer does it all for you. I know people who are literally unaware when the tax year ends because they never in their entire adult lives had to do anything with the tax return - it's just completely irrelevant to a normal working person. And on the o…

It's even better - they work out if you paid too much automaticallly and send you a check in the mail. Had 3 checks over the past decade or so from having time off between jobs but paying full rate for the remaining time. Nothing quite so satisfying as a £1000 check from HM Revenue and Customs!

You should be furious that you gave them a free loan.