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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

#881

Post by refurb »

atopuzov wrote: post #863
einpoklum wrote: post #853

Earlier quoted context omitted.

While it's true that corporate influence over governments may result in subsidies to effectively give a discount - it is less likely than you describe, because the taxation is international. To illustrate why that is, think about a state like Ireland. So far, Ireland has gotten corporations to be HQ'ed there, or pay taxes there, because the tax rate is only 12.5%. The detriment for Ireland has been minimal, if any, f…

It's not like MNCs in Ireland actually pay any tax anyway (various loopholes and agreements provided by the Irish government). To quote from [1] "the revelations shone a fresh spotlight on Irish tax policy that “has been designed precisely to facilitate this kind of avoidance”." [1] https://www.theguardian.com/world/2021/jun/03/microsoft-iris...

That’s not true at all. Your example is a special situation.

https://www.irishtimes.com/business/economy/top-10-companies...

The top 10 corporate tax payers, including Pfizer, Apple and Intel made up 50% of all corporate tax revenue in Ireland, $6B.

Ireland has 4M people, that means the top 10 companies contribute $1500 for every man woman and child in Ireland. That’s a hell of a deal for the country.

Re: G7: Rich nations back deal to tax multinationals

#882

Post by StandardFuture »

mnouquet wrote: post #564
logicchains wrote: post #229

Earlier quoted context omitted.

If you actually looked at any western country's budget, you'd see the vast mmajority of tax revenue is spent on welfare (and in the US case, warfare); only a miniscule amount is spent on infrastucture. Singapore for instance has way better education outcomes and infrastructure than most western countries in spirte of way lower taxes.

> you'd see the vast mmajority of tax revenue is spent on welfare By "welfare", I guess you meant the sponsoring of useless administrative job meant to ensure easy mechanical turk work to appease the masses. The money actually going for care is pretty minimal.

> The money actually going for care is pretty minimal.

That is literally the point.

Welfare = Welfare bureaucracy + Welfare Benefits

This is true of everything the government does. Government = bureaucracy + benefits, with a larger percentage going to support the bureaucracy than in any other organization or context.

And even if you increase money for benefits, the same (or sometimes larger percentage) goes to supporting the bureaucracy of those benefits.

It's not hard.

Re: G7: Rich nations back deal to tax multinationals

#883

Post by StandardFuture »

wolverine876 wrote: post #736
rufus_foreman wrote: post #648

Earlier quoted context omitted.

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…

Exactly Zero of anything you have just said negates the point that was made.

Let's reiterate:

> Here's what it says in the Constitution:

> "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises"

> Crystal clear.

Anything that is not explicitly defined in the Constitution is certainly left up to the interpretation and decisions (within their constitutional authorizations) of the three branches of government.

However, anything that is explicit in the constitution cannot be overturned without a constitutional amendment.

Hopefully that clears things up for you.

Re: G7: Rich nations back deal to tax multinationals

#884

Post by bumby »

tablespoon wrote: post #841
bumby wrote: post #445

Earlier quoted context omitted.

> Maybe such people could be shared a per-share fine based on shares held at a particular date? I think it’s nearly impossible to expect most shareholders to understand the business underpinnings to this degree within the existing system. Think of pensioners with mutual funds, do you think most even understand all the businesses in those funds let alone the operations of those businesses? To me, this is akin at emplo…

> I think it’s nearly impossible to expect most shareholders to understand the business underpinnings to this degree within the existing system. Think of pensioners with mutual funds, do you think most even understand all the businesses in those funds let alone the operations of those businesses? That's true, but I don't think that matters. Those same shareholders both profit and lose based on all kinds of other fact…

>Adding new ways to lose tied to illegal activity doesn't really fundamentally change anything.

I think it does because it creates a adds a dimension to the loss that will disproportionately affect the assessment that of risk. For one, this added dimension has only a downside. Think of an auto insurance company who operates in no-fault States. Their behavior (and by extension, the policies they offer) is changed because the risk they incur is higher despite their customer being a good driver. (The analogy being a “good” company still gets punished in the form of less investment under the proposed rules because the risk to the investor is increased).

Second, while people are well attuned to think about risk, they are very bad at judging it. That’s why the fund managers are not generally capable of out performing the market for extended periods. They are either not as savvy as you assume or work under such constraints that they can’t use it to their advantage. Behavioral psychology/economics shows that people are disproportionately risk-adverse so if you think increased risk without an even higher commensurate increase in reward, they tend to avoid taking on any extra risk.

Re: G7: Rich nations back deal to tax multinationals

#885

Post by StandardFuture »

jedberg wrote: post #788
Aerroon wrote: post #786

Earlier quoted context omitted.

It will also massively increase the complexity of doing taxes for smaller businesses. It wouldn't surprise me if it lead to even more websites going "sorry, we value customers from your country, but we cannot serve this content to you". Imagine running a small business and somebody from Algeria wishes to purchase your software. Is the $5 you make worth having to file Algerian taxes? I mention this, because this is so…

Part of the agreement is that you have to have $10M in profit in that country before the rules apply. So that would never happen. You’d have to make a ton of money there before you have to file taxes. And it’ll be worth it by then.

> you have to have $10M in profit

Sorry, I missed where this was mentioned in the article. Can you supply a link to the reference if it is not in the article?

I did see the following quote:

> The rules on making multinationals pay taxes where they operate - known as "pillar one" of the agreement - would apply to global companies with at least a 10% profit margin.

which is not equivalent to your comment.

Re: G7: Rich nations back deal to tax multinationals

#886

Post by einpoklum »

refurb wrote: post #881
atopuzov wrote: post #863

Earlier quoted context omitted.

It's not like MNCs in Ireland actually pay any tax anyway (various loopholes and agreements provided by the Irish government). To quote from [1] "the revelations shone a fresh spotlight on Irish tax policy that “has been designed precisely to facilitate this kind of avoidance”." [1] https://www.theguardian.com/world/2021/jun/03/microsoft-iris...

That’s not true at all. Your example is a special situation. https://www.irishtimes.com/business/economy/top-10-companies... The top 10 corporate tax payers, including Pfizer, Apple and Intel made up 50% of all corporate tax revenue in Ireland, $6B. Ireland has 4M people, that means the top 10 companies contribute $1500 for every man woman and child in Ireland. That’s a hell of a deal for the country.

> That’s a hell of a deal for the country.

More of a Faustian deal...

Re: G7: Rich nations back deal to tax multinationals

#887

Post by refurb »

refurb wrote: post #873
dingaling wrote: post #817

Earlier quoted context omitted.

> You’d fine then the same amount? Progressive fines on people are based on their income, not how much they have left in the bank at the end of the month.

Sure, but expenses don’t vary a much for people versus companies. You don’t meet many people who make $1M in a year who have unavoidable expenses of $900k.

Even CNN disagrees with your take.

https://edition.cnn.com/factsfirst/politics/factcheck_e58c20...

Fauci was wrong. Simple as that. Better to just own up to it.

Re: G7: Rich nations back deal to tax multinationals

#888

Post by daemin »

jandrewrogers wrote: post #749
daemin wrote: post #552

Earlier quoted context omitted.

This is the whole difference between a revenue tax and a profit tax. I don't actually know why exactly a revenue tax isn't more popular, say 1% revenue versus supposed 30% profit tax. (As if any corporation actually pays that tax rate).

Revenue taxes create predictably perverse incentives with fairly pathological outcomes. There is wide agreement that it is a poor way to tax business entities, with many undesirable side effects. Notably, the most tax efficient business structure is one that is maximally vertically integrated to minimize the number of transactions with suppliers. Small companies end up paying a higher effective tax rate than larger m…

Well right now big companies can just move profits offshore by saying that they make no profit in any given location.

I think in either case big companies aren't going to be challenged much, the trick is what will be the better outcome for the countries and society as a whole.

Re: G7: Rich nations back deal to tax multinationals

#889

Post by StandardFuture »

wildfire wrote: post #850
rufus_foreman wrote: post #768

Earlier quoted context omitted.

> Feels unnecessary negative and very arm chair criticism to just hand wave the whole endeavour and say "oh nothing was done and all they did was talk" They don't have the authority to negotiate the agreements that were described in the headlines as already being made. That's called bullshit. Doesn't matter which side politically you are on, it's bullshit. Why is the BBC printing bullshit? They don't have that author…

No, as has been pointed out to you - multiple times - reaching a deal is not equivalent to a contract. The fact that your experience tells you that "deal equals contract" is strange. In my experience I have had plenty of "deals" not materialise for one reason or another. To extrapolate that the BBC is printing bullshit is basically to say that if you have not experienced something, then it is worthless. The BBC is no…

No, as has been pointed out to you - multiple times - reaching a deal is not equivalent to a deal being legal.

> The BBC is not lying

No, just the status quo BBC propaganda. Let's review some quotes.

> the arrival of the Biden administration in the US, created a moment of opportunity.

> A minimum corporation tax rate of 15% is rather low

> European finance ministers succeeded in including the phrase "at least 15%", which offers a path to get that number higher.

> Tech firms say they welcomed the move.

> A process has begun, a precedent has been set. It may or may not end up being transformative, but this moment is historic.

This last quote is the BBC admitting to painting this as if it was a contract being signed.

Let's continue.

> more tax revenue would be raised from large multinationals and would help pay for public services.

Only public services? Not military? Salaries? Government contracts? etc., etc.? Well, this IS historic!

> Ms Yellen said there was an understanding that national digital services taxes such as those levied by the UK and EU countries would be scrapped and replaced by the new agreement. Such taxes are regarded by the US as unfairly targeting American technology giants.

So, the tech giants get a new tax standard that benefits them over the existing standard?? Funny, this really does go along with the previous quote:

> Tech firms say they welcomed the move.

And here is another interesting quote to focus on:

> Paolo Gentiloni, the EU commissioner for the economy, described Saturday's agreement as a "big step... towards an unprecedented global agreement on tax reform"

It sets a precedence that nothing about what is being done could even be remotely criticized except for it possibly not being enough.

It's laughable. How anyone does not see this as North Korean Kim Dynasty style propaganda is beyond redemption and likely has a double digit IQ.

Then the article ends with three quotes from Amazon, FB, and Google.

Gee, I wonder who sponsored this article (and possibly helped coordinate this meeting).

It couldn't be techopolies trying to cozy up with existing government officials in the hopes of securing an agreement that is mutually beneficial for everyone.

But, paying more money is never beneficial for a company. So, game-theoretically, and thus purely mathematically-speaking: what benefit could these tech companies be receiving from this new arrangement?

Hmm ... surely, in our modern crony capitalist system, it wouldn't be anything corrupt in nature?

Re: G7: Rich nations back deal to tax multinationals

#890

Post by Misdicorl »

Aerroon wrote: post #797
Misdicorl wrote: post #347

Earlier quoted context omitted.

The problem I don't see addressed is that no/low corporate tax leads to bad market incentives. It is more efficient for my company to buy me things than for me to buy me things. But my company will inevitably buy inoffensive/cheap things that appeal to all employees rather than what I really want. This is most often implemented as a food perk or car perk, but obviously extends to almost any consumable purchase.

Aren't those usually limited though? Ie a company can only give $x in perks per employee and everything above that is taxed in some way?

Only if it's not a legitimate business expense. Which in practice means if you get a meal with coworkers and talk about work it counts. Even easier if you have clients
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