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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

#61

Post by RNCTX »

tertius wrote: post #46
RNCTX wrote: post #8

Earlier quoted context omitted.

I think you're in need of some further reading. 1) UN resolutions don't have any enforcement weight, which is why they're so popular with politicians who run on the statement "nothing will fundamentally change." 2) Taxes should be paid by whoever retains earnings, and in that case corporate taxes make a lot of sense. And yes, buying back your own shares to drive share values higher for current shareholders is "retain…

On #2: Buying back shares does not create individual income. It only creates temporary unrealized gains. Only if those individual shareholders sell, do they realize the gains and, in some cases, will they be taxed on it at income tax rates.

Wrong.

That money is rendered worthless from an economic perspective. In a healthy economy the profits of corporations are spent on more facilities, more suppliers, more employees, who all in turn spend their profits on the same.

We don't have a healthy economy. We have corporations that lose money every single day of their entire existence, but manage to drive their share prices by tax scams, accounting fraud, government subsidies, and share buybacks financed with debt the would not be available to them but for the existence of the scams, frauds, and government subsidies.

In that sense these corporations do not do anything of value, they are merely ephemeral structures to facilitate tax and investment risk avoidance for a certain class of people, at the expense of a tax base they do not participate in so should logically be shut out of.

When a corporation uses that money to buy back shares the money is effectively destroyed by being circulated among a financial class that has (mostly) bribed their way out of the tax system.

Hence, any money used for share buybacks should logically be treated as net income for the company in question's next filing.

Re: 136 Countries agree to minimum corporate tax rate

#62

Post by Proven »

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?

Clearly you're completely clueless about economics.

A tax race to the bottom doesn't hurt anyone but bureaucrats, statists and globalists.

Re: 136 Countries agree to minimum corporate tax rate

#63

Post by tommiegannert »

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).

> I think the tech companies will keep their headquarters in Ireland even after this

I agree they probably won't leave. Ireland is cheap for labour as well. (It has/had one of Google's lowest salary levels, for instance.)

However, it will make new companies question moving there. I was in Ireland when Brexit was becoming a reality. My guess was that Fintechs would flee London into Dublin, but it looked like many went to Amsterdam. English is fairly widespread in continental Europe now.

Even Switzerland (which already has four national/federation languages, depending on region) is slowly moving towards English as second language.

Re: 136 Countries agree to minimum corporate tax rate

#64

Post by amai »

I still think it would be better to not have any corporate taxes at all. If corporations have to pay taxes they also want to have a say in politics. But that leads to all these corporate friendly but human unfriendly decisions. Instead if you agree a state should do what is good for it’s people only people should be allowed to pay taxes.

Re: 136 Countries agree to minimum corporate tax rate

#65

Post by fallingfrog »

someguydave wrote: post #58
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?

Well, the nation as an organizing principle and identity arose in revolutionary France as a way to fill the hole left by the collapse of god and the king as the feudal system was abolished. But the nation, too, as a concept has its limits. In some cases I think it will be replaced with more local identifications and political structures; in other cases more global ones. But in every case those structures need to be democratic.

Re: 136 Countries agree to minimum corporate tax rate

#66

Post by [deleted] »

RNCTX wrote: post #61
tertius wrote: post #46

Earlier quoted context omitted.

On #2: Buying back shares does not create individual income. It only creates temporary unrealized gains. Only if those individual shareholders sell, do they realize the gains and, in some cases, will they be taxed on it at income tax rates.

Wrong. That money is rendered worthless from an economic perspective. In a healthy economy the profits of corporations are spent on more facilities, more suppliers, more employees, who all in turn spend their profits on the same. We don't have a healthy economy. We have corporations that lose money every single day of their entire existence, but manage to drive their share prices by tax scams, accounting fraud, gover…

[deleted]

Re: 136 Countries agree to minimum corporate tax rate

#67

Post by tertius »

dantheman wrote: post #47
tertius wrote: post #45

Earlier quoted context omitted.

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

But you don't increase profits, what you do is spend that money recklessly on R&D that has a lower ROI than if that money was spent outside the company. However, once taxes are factored in the ROI is better than paying taxes due to an increase in the share price. So what you incentivize is the misallocation of funds from their most beneficial use outside the organization to something in the organization.

Profits, if not able to be reallocated for more profit should be return to shareholders.

Taxes should be taken into account in calculating where the best ROI would be here. Obviously it changes when you would return profit to shareholders.

Re: 136 Countries agree to minimum corporate tax rate

#68

Post by tertius »

RNCTX wrote: post #61
tertius wrote: post #46

Earlier quoted context omitted.

On #2: Buying back shares does not create individual income. It only creates temporary unrealized gains. Only if those individual shareholders sell, do they realize the gains and, in some cases, will they be taxed on it at income tax rates.

Wrong. That money is rendered worthless from an economic perspective. In a healthy economy the profits of corporations are spent on more facilities, more suppliers, more employees, who all in turn spend their profits on the same. We don't have a healthy economy. We have corporations that lose money every single day of their entire existence, but manage to drive their share prices by tax scams, accounting fraud, gover…

> In a healthy economy the profits of corporations are spent on more facilities, more suppliers, more employees, who all in turn spend their profits on the same.

Only if those investments will create more profit. If capital cannot be allocated effectively (i.e. a company that returns $1 for every extra dollar invested above current ability) then the profit should be returned to the shareholders.

> We have corporations that lose money every single day of their entire existence, but manage to drive their share prices by tax scams, accounting fraud, government subsidies, and share buybacks financed with debt the would not be available to them but for the existence of the scams, frauds, and government subsidies.

Sure there are companies like this.

> at the expense of a tax base they do not participate in so should logically be shut out of.

I mean, you shouldn't pay taxes if you lose money... Shareholders/employees still pay taxes here.

> When a corporation uses that money to buy back shares the money is effectively destroyed by being circulated among a financial class that has (mostly) bribed their way out of the tax system.

Say we have 100 shares of a company. The company makes $100 per year. Each of those shares own $1 per year of the company. If they company pays $50 to buy back 50 shares then each of the remaining shares owns $2 of that $100. I mean, the market still decides what the stocks are worth, but eventually most if not all stocks get valued fairly. How is the money being destroyed?

Again, if the company cannot invest the money profitably to make more money, it should return it to the owners of the company. Are you against private ownership?

> Hence, any money used for share buybacks should logically be treated as net income for the company in question's next filing.

Why?

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