I've always considered the current system to be unfair. Most tax revenue comes from employees, while the super wealthy hire the best of the best accountants. They pay these accountants big commissions and bonuses, then they pay next to nothing in tax.
Global minimum corporate tax: 130 nations to support U.S. proposal
261–270 of 362 posts
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#262Imposing 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.
One of the even bigger issues with this bill is the lack of accountability in government spending. This does nothing to tackle military spending or riders tacked on to bills that have nothing to do with the proposed spending bill. If politicians really wanted to make people happy and get things under control, it would be transparency in spending and no riders on spending bills. This is just another way to wring more…
Well that's a very US specific thing with its current rather 18th century set up. I agree from a parliamentary perspective its horrific.
Its a bit similar to the way the tiny NI parties hold UK governments feet to the fire in return for support they get nice bungs or optouts on human rights laws.
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#263Earlier quoted context omitted.
Sounds scary out of context, but it's hardly a silly prediction. Uber, AirBnB, clothing rental, device upgrade plans...
It is not bad as long as you own stocks, which you can exchange into material goods. Like some of my friends can afford a decent house, but prefer renting because it gives greater flexibility (they can rent a small flat in the center of the city in a walking distance to the office and meet with friends often while they don't have children instead of investing into big house in the suburbs with empty rooms they wouldn…
> even irresponsible people will have some savings at retirement age
Ah, there are enough loopholes that a lot of people still won't end up with any savings at retirement age.
There are a lot of self-employed people in the UK, at the low end of pay (gig workers, freelance cleaners, graphic designers, etc) and high end (consultants, IT contractors etc), and bootstrapping entrepreneurs (pay all over the place). The pension 8% doesn't apply to any of them.
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#264Earlier quoted context omitted.
> If you start taking money from them, they will simply stop working and start spending more time with friends and family. This model of the world assumes that "rich person" means someone with high income and "raise taxes on the rich" means raising the top marginal income tax rate. I don't think either is true and I struggle to imagine how you could be familiar with the financial details of the .1% and think otherwis…
> People rich enough to be included in "tax the rich" mostly get their money from capital gains OK, so we are talking now not about income tax, but about capital gains tax? That's quite a different topic. But, also, no, capital gains tax should not be increased. Because you cannot become rich by investing into index. You become rich by founding a company while working 16 hours a day and getting a large share of it. A…
This is kind of all over the place and riddled with non-sequiters; by way of response I will simply point out that we could raise the capital gains rate 5% tomorrow, and it would still be lower than it was when Amazon and Google were founded.
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#265Earlier quoted context omitted.
Rich people are the only ones paying anything at all. If that's not paying their fair share, how are the 50% of people who don't pay any income taxes at all paying their fair share?
Poor people pay a lot more taxes overall in relation to their wealth and income than the extra-rich. We have a regressive tax system.
How do you pay more when the rate is 0% for the bottom 40%?
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#266The idea that politicians and bureaucracies can defer to external international conventions to be the bad-cop for wildly unpopular policy decisions - and then claim to be powerless to stop them - is anathema to democratic principles like national representation, consent of the governed, and other concepts of human rights. This proposal seems like a global group of government affiliated people colluding to fleece each…
I think you're misunderstanding the concept here, this has nothing to do with dodging responsibility for unpopular policies. If you think countries shouldn't tax corporate profits at all, great, but that's a separate discussion; this is predicated on the assumption that all countries desire a non-zero corporate tax, and just need a way to get there. The point of this measure is to avoid a coordination trap that leads…
Is it a 'coordination trap' or are we just inventing new terminology for a cartel? When OPEC coordinates effectively, we are not under any illusions about how their collusion is cartel behavior that inhibits competition and distorts markets. But when powerful nations do so and use their immense power (soft influence via diplomacy, economic policy, etc.) to bring a large number of other countries onto their plan, suddenly we're not using the same terminology to describe the same behavior. Ultimately taxes going to zero is a good thing because it is a sign of competitiveness between tax structures favoring more efficient governments. This artificial agreement prevents that, just as a cartel of conglomerates colluding to set price floors would be eroding competition.
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#267Earlier quoted context omitted.
> 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 - abr…
I don't really see the point to all of this. There will always be loopholes that allow multi-national companies to avoid tax to some extent. Wouldn't it be simpler to just set corporate tax rates to zero, and instead raise taxes on income and -- especially -- capital gains? And the US already has a personal tax system where it doesn't matter where you earn income: if you're a US citizen, you have to consider US incom…
> Wouldn't it be simpler to just set corporate tax rates to zero, and instead raise taxes on income
Do you mean income as in profit (= revenue minus expenses), or income as in revenue (not subtracting costs)? If you mean profit... that's what corporation tax is already. So I'll assume you mean revenue.
No it wouldn't. It would kill many businesses overnight, and incentivise the worst behaviour in the rest.
Consider a company that buys components for $100 and assembles them into a widget they sell for $105 to shops. (Who sell it for $110.) Let's ignore other costs.
Corporation tax at 20% would charge the company $1 per widget.
Income (as revenue) tax at 20% would charge the company $20 per widget, and the company would immediately have to stop producing widgets altogether, or substantially raise the price of widgets. It wouldn't have a choice. You as the end user would see the prices of everything in shops shoot up, and many things would disappear from the shelves.
If you used a lower tax rate, say 1% so that companies like this can continue, it will be far too low for companies that pay $50 for components and sell their widget for $100. Those would be charged only $1 on their profit of $50, keeping $49.
You want to incentivise (and indeed help) the former type of company. It's selling widgets at close to the cost of making them, and if it is so minded, it may use the highest quality materials it can afford.
But you have designed a tax that strongly incentivises, even requires, the latter type of company: Only pursuing opportunities that use the cheapest possible materials while selling at high prices. Never doing anything that brings in just a small profit.
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#268Earlier 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…
> Zero would be an even better number.
Looking at monetary policy since 2008, I sometimes wonder if taxes are even necessary.
It's increasingly clear that central banks can print and fund ~20% of their host governments' budget without any risk of lasting inflation. Why not try ratcheting that up?
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#269Earlier quoted context omitted.
State leaders have no incentive to create value, but rather to keep power. Companies must create valuable things people want, or be out of business in a very short time.
State leaders have an incentive to get reelected. Companies are only beholden to their shareholders which represent a tiny fraction of the population.
Companies are also beholden to their customers. For all its faults, that does result in some good products.
Re: Global minimum corporate tax: 130 nations to support U.S. proposal
#270Earlier 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…
> More businesses will go to China if they are able to.
So let them go, other business would fill up that place.