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

#301

Post by asteroidbelt » Fri, Jul 02, 2021, 3:22 AM UTC

jhrmnn wrote: post #164

jeofken wrote: post #141

Earlier quoted context omitted.

Competition in economics is the incentive that has brought the majority of westerners from Companies compete for shareholders by satisfying as many customers as possible. If states can compete for the best deal for international business, companies can better serve people, and those states can house centres of international trade. It’s not just abstract talk, but incentives that drive us to live different everyday li…

> serve people You wanted to write “shareholders”, right?

It is win-win in market economy. People use Amazon not because they want to make shareholders rich, but because they prefer next day delivery to a trip to a store.

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

#302

Post by shaicoleman » Fri, Jul 02, 2021, 3:27 AM UTC

toast0 wrote: post #230

throwaway34241 wrote: post #143

Apparently it's also possible to address the issue of shifting corporate profits to tax-havens even without a large scale international agreement. Basically, corporations have one place money comes in and two places it comes out, like so: sales = expenses + profits If you tax the sales, then deduct the expenses, that leaves the incidence of the tax on the profits. But importantly, unlike profits, it's usually clear t…

> But importantly, unlike profits, it's usually clear to which country a sale belongs to. Is it? If I order something from another country, does the sale belong to the sending country or the receiving country?

> Is it? If I order something from another country, does the sale belong to the sending country or the receiving country?

The receiving country. This, for example is how the new EU VAT rules now work.

https://ec.europa.eu/taxation_customs/business/vat/vat-e-com...

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

#303

Post by asteroidbelt » Fri, Jul 02, 2021, 3:29 AM UTC

okareaman wrote: post #50

Instead of trying to change the behavior of other countries, why not implement an alternative minimum tax for companies that do business in the United States?

Taxes would be too hard to compute. What if a company sells a few car in the US, the car is manufactured in Germany with parts from France, and development is split between 40 countries in the world including US, how much the company should pay in the US?

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

#304

Post by nine_k » Fri, Jul 02, 2021, 3:30 AM UTC

toast0 wrote: post #230

throwaway34241 wrote: post #143

Apparently it's also possible to address the issue of shifting corporate profits to tax-havens even without a large scale international agreement. Basically, corporations have one place money comes in and two places it comes out, like so: sales = expenses + profits If you tax the sales, then deduct the expenses, that leaves the incidence of the tax on the profits. But importantly, unlike profits, it's usually clear t…

> But importantly, unlike profits, it's usually clear to which country a sale belongs to. Is it? If I order something from another country, does the sale belong to the sending country or the receiving country?

I suppose it belongs to the country where the selling legal entity is registered.

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

#305

Post by ineptech » Fri, Jul 02, 2021, 4:06 AM UTC

opo wrote: post #295

ineptech wrote: post #264

Earlier quoted context omitted.

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.

>This is kind of all over the place and riddled with non-sequiters; Blanket dismissals aren't helpful. As the guidelines state: "Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something." >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. Well Google w…

> Where are you getting your numbers?

I was under the impression that the Google founders started in January of '96, when the rate was 28%, and '98 was when they legally incorporated. Perhaps they originally intended Google to be a non-profit, and only changed their minds in reaction to the rate cut in 1997?

> A good critical comment teaches us something.

Interesting complaint. What was yours intended to teach me? Other than your nitpick, you forgot to include the part where you actually disagree with my point (that asteroidbelt's dire prediction that entrepreneurs would have no desire to launch ambitious commercial ventures if we raise the capital gains rate is not supported by recent history).

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

#306

Post by UnpossibleJim » Fri, Jul 02, 2021, 4:16 AM UTC

walshemj wrote: post #262

UnpossibleJim wrote: post #144

Earlier quoted context omitted.

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.

That's completely fair, as I really can't speak to the government expenditures in other countries, nor how they pass their budgets.

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

#307

Post by throwaway34241 » Fri, Jul 02, 2021, 5:08 AM UTC

zizee wrote: post #213

throwaway34241 wrote: post #143

Apparently it's also possible to address the issue of shifting corporate profits to tax-havens even without a large scale international agreement. Basically, corporations have one place money comes in and two places it comes out, like so: sales = expenses + profits If you tax the sales, then deduct the expenses, that leaves the incidence of the tax on the profits. But importantly, unlike profits, it's usually clear t…

This is an interesting concept, and worthy of including in the discussion, but you are presenting Border Adjustment Tax as if the results are a certainty. The Wikipedia article describes this as theoretical with quite a bit of uncertainty, and economists are far from concensus on what the outcomes would be. There are also definitely winners and losers in this system, so it's not so simple to say it the proposal was k…

Do you have any resources for how in-dispute the (eventual) currency adjustment part is? As you probably know, there is never 100% agreement among economists on anything, and no matter how narrow the opposition is you can often count on politically-motivated groups to find and promote it relentlessly.

The main data I have is both Mankiw and Krugman (both highly eminent economists from different sides of the aisle) seemed to think it checked out (and the idea is over 20 years old at this point, so it's not that new). Krugman in particular got his Nobel on trade and, uh, is not normally inclined to say nice things about Republicans (this was proposed in the US as part of a Republican tax reform initiative).

So that's enough for me to presume that the math is probably OK, although I admit I'm not capable of checking it myself, and it would be nice if a more comprehensive survey was available.

If the currency adjustment does balance out I'm not sure who the (eventual) losers would be aside from internationals that profit-shift to low tax jurisdictions (which was the whole point).

Of course if the currency adjustment wasn't immediate you could see winners/losers for some period. I'm sure there would be other transition costs, the tax system is already pretty complex and thinking about all the edge cases while switching between two completely different tax regimes seemed rather headache-inducing.

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

#308

Post by robomartin » Fri, Jul 02, 2021, 5:10 AM UTC

sumedh wrote: post #270

robomartin wrote: post #157

Earlier quoted context omitted.

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.

Please think this through.

Businesses don't go to China because they want to. They do so because they have no other choice. When the combination of regulatory, tax and labor regulations makes it so it is impossible to compete you are left with two choices: Embrace China or close the doors.

While "other business would fill up that place" might sound like a nice heart-warming idea, it is a fantasy. The only businesses that will fill that place are Chinese businesses selling directly in the US and Europe (an ever-increasing category, just search Amazon) or US and European businesses who have outsourced enough of their operation to China to be competitive.

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

#309

Post by robomartin » Fri, Jul 02, 2021, 5:16 AM UTC

jlokier wrote: post #267

kelnos wrote: post #234

Earlier quoted context omitted.

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…

I was hoping the pandemic taught people something about business. I guess it didn't.

Society does not benefit from businesses operating on vapor-thin profits. When (not if) anything goes wrong these businesses trigger a job-loss chain reaction that is impossible to avoid.

What you want are businesses who make enough in profits to build a solid safety net, evolve, compete, provide security and upward mobility to employees, suppliers and the entire food chain that surrounds them.

Profits are not bad. They are an absolute necessity for growth and stability.

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

#310

Post by robomartin » Fri, Jul 02, 2021, 5:18 AM UTC

Leherenn wrote: post #228

robomartin wrote: post #205

Earlier quoted context omitted.

If you think China and others will abide by this nonsense you might need to review how business is supported by government in China. Did you know they can export products at cost and still make up to 15% on their international sales? The world is not a level playing field. Did you know it costs them darn near zero dollars to ship products within the US, while US companies have to pay full fare? The ONLY way the US an…

It seems to me China would generally be in favour of this. They're a large country with large internal consumption, and they would rather some of this money goes into their coffers than somewhere else. Generally, fiscal paradise are small countries which have little to lose by lowering taxes (to local business), and a lot to gain by attracting revenues from bigger countries. China's corporate taxes are much higher th…

You need to understand the business equation of a Chinese export company in order to understand what I am talking about. Books have been written on the subject. I can't do it justice here. Let's just say things don't run like they do in the US and Europe. Not even close.