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136 Countries agree to minimum corporate tax rate

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Re: 136 Countries agree to minimum corporate tax rate

#11

Post by lowbloodsugar »

dantheman wrote: post #4

I think this type of harmonization is incredibly harmful and reduces experimentation among states. I personally think the concept of corporate taxes doesn't make sense and encourages reckless behavior - there are a lot of unintended consequences do this. We should be encouraging experimentation in governance. It's the same how inflation doesn't just devalue the currency, it encourages riskier behavior because investo…

Sure. Let's try an experiment where all countries agree to a minimum tax rate, and see what that does.

We've tried race-to-the-bottom. We've tried penalize-till-we-get-hitler. We've tried tickle-down. We've tried fascism-masquerading-as-communism. Let's try globally coordinated minimum tax!

Re: 136 Countries agree to minimum corporate tax rate

#12

Post by dcgudeman »

vegetablepotpie wrote: post #9
dantheman wrote: post #4

I think this type of harmonization is incredibly harmful and reduces experimentation among states. I personally think the concept of corporate taxes doesn't make sense and encourages reckless behavior - there are a lot of unintended consequences do this. We should be encouraging experimentation in governance. It's the same how inflation doesn't just devalue the currency, it encourages riskier behavior because investo…

Without collective agreements between governing bodies on what bare minimum standards should be on taxation what we see is rent seeking behavior from corporations (ah la Foxconn and Mount Pleasant, Amazon HQ 2). Without minimum taxation, we see a race to the bottom for taxation, where elites benefit and everyone else looses.

By "elites" do you mean the people living in the countries or states that attract capital? Ireland's standard of living has increased dramatically because they adopted low taxation regime. It's ridiculous to pretend that forcing countries that don't have much in the way of resources or infrastructure to adopt higher taxes somehow helps them. This might help the U.S. or Germany keep companies "in house" but it certainly does not help Ireland or similar countries.

Re: 136 Countries agree to minimum corporate tax rate

#13

Post by sharkjacobs »

fulafel wrote: post #7

Sounds good, a tax race to the bottom hurts many more counries than it helps, it's a negative sum game. What's the previous % been so far in major western counries, anyone got a link?

US: 21%

China: 15%/25%

Japan: 29.74%

Germany: 29.65%

UK: 19%

France: 26.5%

India: 15%/22%

Italy: 27.9%

Countries with two values listed have different rates for different types of companies e.g. China has a lower rate for “high-tech” companies

https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

Re: 136 Countries agree to minimum corporate tax rate

#14

Post by fallingfrog »

On one level, this is a good thing as there has been a race to the bottom going on in terms of taxes for some time.

But on another level, this is very bad because national tax policy is now being set by unelected diplomats instead of congress. It's an ominous admission that western democracy is now unable to operate as it's meant to and set policy in a way that reflects the desires and interests of the citizens.

I know that worrying about national sovereignty is usually a right wing thing, but there is some truth to it- when the economy is international the bodies with the most power are the international economic agencies and banks. For example it's well known that Greek government policy after the financial crisis was dictated to them by the European Central Bank and the IMF. Likewise the World Bank and the IMF set policy for a large swath of the global south. And none of those people are elected.

Re: 136 Countries agree to minimum corporate tax rate

#15

Post by ensignavenger »

crishoj wrote: post #3
telotortium wrote: post #2

I think the tech companies will keep their headquarters in Ireland even after this - Ireland is still not going to raise it's corporate tax rate above 15%, there's inertia, and Ireland is now the only native English-speaking country in the EU (except maybe for Malta).

The greater impact of the agreement as I understand it will come from the requirement for companies to pay taxes in the countries where they do business, and not just in the country of registration.

Whenever some one visits Hacker News, where is Ycombinator "doing business" from? The country where the visitor is located? The country where the Hacker News moderators/programmers are located? The country where Ycombinator is headquartered? The location of the Hacker News servers? The location of the advertisers on HackerNews? If each country makes up their own tax rules to determine where Ycombinator is doing business, then a company may have to pay 200% of their total revenue in taxes to cover all the different locations that could claim business was being conducted there.

Re: 136 Countries agree to minimum corporate tax rate

#16

Post by aspenmayer »

dcgudeman wrote: post #12
vegetablepotpie wrote: post #9

Earlier quoted context omitted.

Without collective agreements between governing bodies on what bare minimum standards should be on taxation what we see is rent seeking behavior from corporations (ah la Foxconn and Mount Pleasant, Amazon HQ 2). Without minimum taxation, we see a race to the bottom for taxation, where elites benefit and everyone else looses.

By "elites" do you mean the people living in the countries or states that attract capital? Ireland's standard of living has increased dramatically because they adopted low taxation regime. It's ridiculous to pretend that forcing countries that don't have much in the way of resources or infrastructure to adopt higher taxes somehow helps them. This might help the U.S. or Germany keep companies "in house" but it certain…

This argument is subtly interesting, as it lays bare how regulatory capture of the tax system by corporations has caused unexpected consequences and externalities, and how efforts seeking to even the playing field for smaller corporations and countries ironically benefits those best able to navigate increased regulatory hurdles and scrutiny and higher tax burdens - the status quo elite corporations.

I’m reminded of the (conspiracy?) theory that the recent Facebook whistleblower is a controlled opposition operative who deliberately seeks to increase the regularly burden on Facebook and other social media sites, because Facebook will benefit overall compared to smaller corporations who are not able to iterate and adapt as well.

Is this new tax plan comparable to regulatory capture by large multinational corporations? If so, how does it deal with these concerns?

Re: 136 Countries agree to minimum corporate tax rate

#17

Post by glogla »

sharkjacobs wrote: post #13
fulafel wrote: post #7

Sounds good, a tax race to the bottom hurts many more counries than it helps, it's a negative sum game. What's the previous % been so far in major western counries, anyone got a link?

US: 21% China: 15%/25% Japan: 29.74% Germany: 29.65% UK: 19% France: 26.5% India: 15%/22% Italy: 27.9% Countries with two values listed have different rates for different types of companies e.g. China has a lower rate for “high-tech” companies https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

That makes this sound more like a corporate win - 15 % is already the lowest one, and this agreement can be used as a way to wiggle out from something more useful, like revenue tax or VAT.

Re: 136 Countries agree to minimum corporate tax rate

#18

Post by tweedledee »

ensignavenger wrote: post #15
crishoj wrote: post #3

Earlier quoted context omitted.

The greater impact of the agreement as I understand it will come from the requirement for companies to pay taxes in the countries where they do business, and not just in the country of registration.

Whenever some one visits Hacker News, where is Ycombinator "doing business" from? The country where the visitor is located? The country where the Hacker News moderators/programmers are located? The country where Ycombinator is headquartered? The location of the Hacker News servers? The location of the advertisers on HackerNews? If each country makes up their own tax rules to determine where Ycombinator is doing busin…

I think there is a single entity that determines allocation. Details TBD. It’s a one liner in the following doc;

https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solu...

Re: 136 Countries agree to minimum corporate tax rate

#20

Post by aspenmayer »

ensignavenger wrote: post #15
crishoj wrote: post #3

Earlier quoted context omitted.

The greater impact of the agreement as I understand it will come from the requirement for companies to pay taxes in the countries where they do business, and not just in the country of registration.

Whenever some one visits Hacker News, where is Ycombinator "doing business" from? The country where the visitor is located? The country where the Hacker News moderators/programmers are located? The country where Ycombinator is headquartered? The location of the Hacker News servers? The location of the advertisers on HackerNews? If each country makes up their own tax rules to determine where Ycombinator is doing busin…

I would be surprised if double taxation was not addressed or considered.
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