Global minimum corporate tax: 130 nations to support U.S. proposal • Hacker News Board

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#171

Post by lordnacho » Thu, Jul 01, 2021, 9:13 PM UTC

magila wrote: post #136

lordnacho wrote: post #113

Earlier quoted context omitted.

If we did that, rich people would keep a corp as a piggy bank and only pay taxes on whatever they took out. Most of the money would stay in the corp and be use on various investments. To a degree this is already what people do (eg contractors), except they have to pay some corp tax each year on what they made.

How is that any different from having money invested in stocks/real estate/etc today? Unrealized capital gains aren't taxed regardless of whether the asset is held by a corp or individual. In any case it's when the person realizes the gains that a taxable event is triggered.

The difference is it can be a realised gain that you'd then not pay tax on. Eg the Corp makes 100 in profits but at zero it doesn't pay out anything.

For unrealised gains you're right, there's no difference.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#172

Post by novok » Thu, Jul 01, 2021, 9:13 PM UTC

bradford wrote: post #62

jbaudanza wrote: post #26

Imposing taxes on a legal entity always seemed fishy to me. Politically, it sounds great to say, "Make the corporations pay their share!", but who exactly are we targeting with these taxes? Is it the rich executives? Why not just raise taxes on the rich directly? I suspect in most cases the tax burden is just shifted onto the lower-income workers or the customers somehow.

> it sounds great to say, "Make the corporations pay their share!" the Global minimum tax rate is only tangentially related to the 'make corporations pay their share' problem. The real problem is a 'race to the bottom' where corporations will shop around and put tax headquarters in the country with the smallest tax rate (i.e., Ireland). > I suspect in most cases the tax burden is just shifted The big question for me…

It's a collusion agreement amongst the government industry to not compete with each other on this one aspect.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#173

Post by patrickaljord » Thu, Jul 01, 2021, 9:14 PM UTC

Next year the US will spend $715 billion on military budget alone, a $10 billion increase from last year. Shouldn't the government try to cut spending before thinking of how it could increase tax revenue?

It's like an obese person wanting to lose weight while eating more each year and thinking of increasing time spent at the gym to make up for it, shouldn't they try eating less if they want to lose weight?

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#174

Post by lordnacho » Thu, Jul 01, 2021, 9:14 PM UTC

tick_tock_tick wrote: post #138

lordnacho wrote: post #113

Earlier quoted context omitted.

If we did that, rich people would keep a corp as a piggy bank and only pay taxes on whatever they took out. Most of the money would stay in the corp and be use on various investments. To a degree this is already what people do (eg contractors), except they have to pay some corp tax each year on what they made.

It's much easier to force a corp to pay dividends or do a share buyback than it is to chase them around the world with some horrible tax policy. A 0% corporate tax with law to prevent excessive hoarding of cash in the corporation is the only sane solution.

The law to prevent cash hoarding is just a tax, no?

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#175

Post by realityking » Thu, Jul 01, 2021, 9:15 PM UTC

robomartin wrote: post #157

CrazyStat wrote: post #107

Earlier quoted context omitted.

Raising corporate taxes is generally popular, not "wildly unpopular." For example, in a recent poll 65% of Americans support raising corporate taxes [1]. This number has been fairly steady over time. It's even higher when you ask about closing loopholes that allow international tax havens, as this 15% minimum tax agreement is trying to do--70-85% support [2]. The only terrible shame here is you laundering your opinio…

65% of Americans have no clue what it takes to run a business of any scale. They can barely calculate a tip at the restaurant, yet they think they are qualified to make decisions on taxation. The flavor of democracy we practice has been good. However, we must be honest enough to admit it can degenerate into mob rule, which generally means decisions are made by the most gullible and ignorant among us on any specific t…

> In a globalized economy we need lower taxes. Zero would be an even better number.

Isn’t that point precisely addressed by the Biden administrations of setting a global minimum tax rate? If every country, or at least every country without signify the trade barriers (who cares what happens in North Korea) has the same tax rate than there’s no incentive for companies to move their profits - or the entire company - abroad to save on taxes.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#176

Post by jcrites » Thu, Jul 01, 2021, 9:16 PM UTC

tick_tock_tick wrote: post #138

lordnacho wrote: post #113

Earlier quoted context omitted.

If we did that, rich people would keep a corp as a piggy bank and only pay taxes on whatever they took out. Most of the money would stay in the corp and be use on various investments. To a degree this is already what people do (eg contractors), except they have to pay some corp tax each year on what they made.

It's much easier to force a corp to pay dividends or do a share buyback than it is to chase them around the world with some horrible tax policy. A 0% corporate tax with law to prevent excessive hoarding of cash in the corporation is the only sane solution.

How much cash a corporation holds should be a matter for the corporation's CEO, board, and shareholders to decide.

If the shareholders are comfortable with the company sitting a on large amount of cash as a rainy day fund, or a reserve that can be used for large acquisitions, significant new research efforts (maybe Apple wants to build cars, and self-driving ones) etc., then who's complaining?

With $195 billion in cash reserves, Apple couldn't e.g. buy a semiconductor company like TSMC outright (market cap $623B), but one could imagine that there are plenty of companies that Apple might like to have the ability to buy that are in the several-to-ten billion dollar range.

If a substantial number of shareholders are unhappy with Apple's cash hoard then a large enough coalition could force a vote to distribute a portion of the cash as dividends, or use it for a stock buyback; or pressure management changes at the company, etc.

So far, the fact that Apple investors appear to be comfortable with its cash reserves suggests that Apple investors believe that Apple will either (1) lobby for policy changes that enable it to bring the cash back to the US without paying considerable taxes, at which point it will distribute them as dividends or stock buybacks; or (2) they believe Apple will use that cash for investments/acquisitions that will generate more returns than the investors themselves would generate if the same cash were distributed immediately to shareholders.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#177

Post by pope_meat » Thu, Jul 01, 2021, 9:17 PM UTC

asteroidbelt wrote: post #167

pope_meat wrote: post #156

Earlier quoted context omitted.

Tell your 0.1 friends to focus on all those points you made, and quick, because they will be the scapegoat for the mob. Things are getting bad enough to where "cutting ones nose to spite the face" starts to make sense, redistributing the misery the rich have insulated themselves from. Just my feeling on the situation.

> Tell your 0.1 friends to focus on all those points you made They know it already, most of my friends are classical liberals/conservatives. > they will be the scapegoat for the mob You are probably in the top 10% (as most people here on HN), so a lot of people here might become the same scapegoat. > Things are getting bad enough to where "cutting ones nose to spite the face" I'm not sure things are getting bad. Poor…

I'm in the bottom 50% of the population money wise, but you're right, HN is definitely full of people in the top 10%, and so literally shortwire in their brains when I say something like "it's bad enough to where cutting ones nose to spite the face is starting to make sense"

Because from your position it seems absurd.

From mine it seems like the only move left to make.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#178

Post by standardUser » Thu, Jul 01, 2021, 9:18 PM UTC

patrickaljord wrote: post #173

Next year the US will spend $715 billion on military budget alone, a $10 billion increase from last year. Shouldn't the government try to cut spending before thinking of how it could increase tax revenue? It's like an obese person wanting to lose weight while eating more each year and thinking of increasing time spent at the gym to make up for it, shouldn't they try eating less if they want to lose weight?

This is not about increasing tax revenue it is about preventing multinationals from evading taxes. It's similar in concept to the Alternative Minimum Tax, which was designed to prevent an ever-increasing web of exemptions and loopholes from allowing some people to pay little-to-no taxes.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#179

Post by lordnacho » Thu, Jul 01, 2021, 9:22 PM UTC

novok wrote: post #165

DevX101 wrote: post #109

Did a quick cross ref for the non-signatories ranked by GDP: https://pastebin.com/YyYTV65i I'd predict corporations to move to countries on this list that are non-sanctioned, high rule of law index, and easy to do business in. Ireland and Estonia in particular come to mind.

I'm surprised %0 taxes on everything UAE is implicitly a signatory! The list of countries: https://www.oecd.org/tax/beps/oecd-g20-inclusive-framework-m...

That made me wonder, what's to stop a country from having a high rate but also offering a tax credit? Or some sort of disguised give-back?

If you Google the Malta Corp tax rate, you find 35%. You need to dig a big more to read that actually you can get 30% refunded. Haven't tried it myself.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#180

Post by realityking » Thu, Jul 01, 2021, 9:24 PM UTC

asdfasgasdgasdg wrote: post #76

mustafa_pasi wrote: post #40

This is a new kind of imperialism. The G7 makes up the rules, under the guise of fighting tax evasion or financing of terrorist activities. Then they make all the less powerful countries comply to those rules. If they do not, they get greylisted or blacklisted by some "international" watchdog, making it much harder for those countries to participate in the global economy. Of course only the poorer less influential co…

It does seem like e.g. the US could impose this unilaterally. You, a company, have to make two tax returns: one on all the money you made here, and one on all the money you and/or your relevant "parent" corporation made elsewhere. Same rules to calculate taxes in both cases. On the latter return, you can subtract the sum of the taxes you paid elsewhere from the tax owed. The rest belongs to the US government. At that…

I’m neither a lawyer nor an accountant but I’d expect it to run counter to all existing double taxation agreements. All those agreement would have to be cancelled or renegotiated - that’s a lot of work.