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136 Countries agree to minimum corporate tax rate

cnn.com

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Re: 136 Countries agree to minimum corporate tax rate

#51

Post by sushid »

brodouevencode wrote: post #33
lovich wrote: post #23

Did something happen to cause mutual cooperation between most of the planet to be viewed as a bad thing? All these countries have come to an agreement by negotiation instead of economic or martial war. Why is there such pessimism/paranoia about this deal in this thread?

Operating under the assumption that most replies are from US citizens: the people of the US have a love/hate relationship with taxes. Most of the time theyre fine with taxing others so that they could reap the benefits, they just dont want to be taxed themselves.

Isn't that like... everyone?

Re: 136 Countries agree to minimum corporate tax rate

#52

Post by I_am_tiberius »

tertius wrote: post #45
I_am_tiberius wrote: post #34

Earlier quoted context omitted.

Corporate tax in general is the wrong type of taxation. Corporate tax can be controlled by the company itself. If you run your business economically, you pay more corporate tax. This is just wrong.

Yes, but increased profits (by running profitably) also increases returns for the shareholders... A good thing.

My point is that it's a bad tax because it can be controlled and at the same time corporate tax controls the business decisions. This should not be the case in my opinion. Think about it. I think it would be better to focus on sales tax. Also, it would make tax rules much easier to understand.

Re: 136 Countries agree to minimum corporate tax rate

#53

Post by lovich »

sushid wrote: post #51
brodouevencode wrote: post #33

Earlier quoted context omitted.

Operating under the assumption that most replies are from US citizens: the people of the US have a love/hate relationship with taxes. Most of the time theyre fine with taxing others so that they could reap the benefits, they just dont want to be taxed themselves.

Isn't that like... everyone?

I like to think I don’t make every decision with a sociopathic level of self interest. I hope at least some others do too

Re: 136 Countries agree to minimum corporate tax rate

#55

Post by nescioquid »

fallingfrog wrote: post #14

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 kn…

> tax policy is now being set by unelected diplomats instead of congress.

Each nation will have to ratify the agreement.

It is nominally true that congress sets tax policy, though that overlooks the golden horde of lobbyists that descend upon Congress with ready-made bills. It is also true that a representative or senator ought to make decisions based on the best interests of their constituents, rather than donors and their lobbyist pals (who might land them a lucrative gig after office).

Re: 136 Countries agree to minimum corporate tax rate

#57

Post by negativez »

throwaway34241 wrote: post #42
brodouevencode wrote: post #35

Earlier quoted context omitted.

You, the consumer, pay the corporate tax.

When people talk about the "corporate tax", they're talking about the tax on corporate profits, which belong to the shareholders. You could theoretically tax the shareholders directly instead when they receive those profits as dividends etc (and there might be some advantage to doing so - it's more clear which country taxes should be paid in, and you can have a lower dividend tax rate for people with low incomes). Th…

That's true - but taxes *always* disincentivize the thing being taxed. If investment in a company is less profitable under taxation than it otherwise would be, there will be less investment in that company, no exceptions. Now the size of that effect is quite likely to be negligible for the companies in question here. But it's at least theoretically possible that taxing corporate profits could lead to a change in the marketplace, including market dropout, that might actually lead to consumers paying higher prices to the remaining members of a market with reduced competition.

Further, if all companies in an already low-competition marketplace are equally affected by the tax, then it's quite possible for all of them to ~simultaneously raise prices to offset the tax, with or without explicitly illegal coordination, knowing that the others will follow suit.

Re: 136 Countries agree to minimum corporate tax rate

#58

Post by someguydave »

fallingfrog wrote: post #14

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 kn…

“ I know that worrying about national sovereignty is usually a right wing thing”

is that an apology for considering a right wing idea seriously?

Re: 136 Countries agree to minimum corporate tax rate

#59

Post by throwaway34241 »

negativez wrote: post #57
throwaway34241 wrote: post #42

Earlier quoted context omitted.

When people talk about the "corporate tax", they're talking about the tax on corporate profits, which belong to the shareholders. You could theoretically tax the shareholders directly instead when they receive those profits as dividends etc (and there might be some advantage to doing so - it's more clear which country taxes should be paid in, and you can have a lower dividend tax rate for people with low incomes). Th…

That's true - but taxes *always* disincentivize the thing being taxed. If investment in a company is less profitable under taxation than it otherwise would be, there will be less investment in that company, no exceptions. Now the size of that effect is quite likely to be negligible for the companies in question here. But it's at least theoretically possible that taxing corporate profits could lead to a change in the…

Sure, there are definitely second and third order effects. Taxing shareholders may reduce the incomes of wealthy people, who have a higher savings rate, leading to a reduced national savings rate, higher interest rates and lower asset prices, which could cause some businesses to decide against doing certain investments that wouldn't have a high enough return (relative to the interest rate on that capital).

Since everything is tied together it's hard to reason through all of this. For companies making investment decisions the interest rate will obviously be one factor, but projected consumer demand will be another, and it's easy to imagine in some cases higher middle-class incomes and consumer demand might be more important than a lower interest rate for decisions around building new factories etc.

Obviously it's complex and I don't have a strongly-held opinion. But taking a historical perspective interest rates are near record lows and financial asset prices are at record highs. On those grounds policies that might nudge us back a little into where the economy has been operating for the past 50 years (regarding interest rates etc) seem less risky than ones that push us further away from our post-WWII historical experience.

Re: 136 Countries agree to minimum corporate tax rate

#60

Post by nine_k »

zw123456 wrote: post #19

Step 1) global harmonization of trade Step 2) common monetary system Step 3) global harmonization of tax structure Step 3) one global government (similar to EU) Is that a good thing or a bad thing ? Yes.

Not really "global", but mostly "western", I'd say.

What are the upsides of homogenization? Efficiency and predictability when all goes well.

What are the downsides of homogenization? Lack of innovation and fragility when everything stops going all that well.

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