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EU adopts global minimum 15% tax on big business

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Re: EU adopts global minimum 15% tax on big business

#191

Post by UncleEntity »

diego_sandoval wrote: post #156
zuminator wrote: post #127

Earlier quoted context omitted.

That's how taxes work generally though. I already paid income taxes on my salary, but when I spend it on something I have to pay taxes again, and then the retailer has to count it as taxable income as well. Anytime money changes hands the government gets its vig. I don't see how the corporate tax is so egregiously different.

> Anytime money changes hands the government gets its vig. And doesn't that create an artificial pressure for money to change hands fewer times (for example, in the production of a consumer good)?

I doubt anyone makes this mental calculation when they’re considering buying something at a store.

Sure, big ticket items people might shop around for a lower tax but will they not buy something based on minimizing the amount they pay to the government?

Re: EU adopts global minimum 15% tax on big business

#192

Post by cwkoss »

anonuser123456 wrote: post #181
treewalking wrote: post #165

Earlier quoted context omitted.

It’s weird that individuals are taxed on revenue but corporations are (usually?) taxed on profit.

Individuals (in the US) have standard deduction, which approximates the minimum value to sustain one's person. It's a bad approximation, but it is what it is. It's assumed that corporations spend as little as possible on operations. Individuals obviously don't. Whereas a corporation wouldn't rent employees 500 sqft / person, individuals regularly rent/purchase that density for themselves. Similarly, while a corporati…

With progressive taxation of corporations, we could disincentivize the existence of trillion dollar corporations, opening up the market for thousands more million to billion dollar businesses to exist. Regulatory capture would be much harder to coordinate which would lead to much less corruption. Greater marketplace competition would lead to better quality services and products for consumers.

The curve used to shape the tax rate as company size grows could be tuned to mitigate many of the potential negative side effects of this.

Re: EU adopts global minimum 15% tax on big business

#193

Post by cwkoss »

red_trumpet wrote: post #176
cwkoss wrote: post #164

Earlier quoted context omitted.

Is this a tax on profits? If so, I worry it will remain weak to hollywood-accounting attacks: it's easy to spend money until there are no 'profits'. I'd really love to see progressive taxation of corporate revenue: the bigger a company is the higher the tax rate. Huge corporations benefit from economies of scale, so there is an incentive for power concentration. This power concentration is bad for society: it deliver…

> it's easy to spend money until there are no 'profits'. If they have to spend the money in the same country as they gained the profits, that might work as intended.

I like that. There is a nice justice to that idea.

Re: EU adopts global minimum 15% tax on big business

#194

Post by rychco »

Negitivefrags wrote: post #33

I don't really like this kind of idea because it really goes against a kind of fundemental freedom. "If you don't like it, you can leave". Instead, laws around making sure that the profits generated from a countries citizens are taxed by that country make more sense to me. A lot of laws around that already exist, and I suppose a lot of people would say that they have not been effective. A lot of it comes down to the…

Corporate profits don’t affect your fundamental freedoms.

Re: EU adopts global minimum 15% tax on big business

#196

Post by spywaregorilla »

cwkoss wrote: post #164
martinald wrote: post #25

This isn't really as big a deal as it's been made out to be, IMO. This is Pillar 2 of the OECDs tax reform for corporations. Pillar 1 is much more interesting, and would require corporations to actually book profits where they are made (so not putting everything through Ireland for example). This will have a much bigger impact imo than this 15% ruling, because right now there are a bunch of tricks you can use to get…

Is this a tax on profits? If so, I worry it will remain weak to hollywood-accounting attacks: it's easy to spend money until there are no 'profits'. I'd really love to see progressive taxation of corporate revenue: the bigger a company is the higher the tax rate. Huge corporations benefit from economies of scale, so there is an incentive for power concentration. This power concentration is bad for society: it deliver…

Great way to kill off low margin important industries like steel

Re: EU adopts global minimum 15% tax on big business

#197

Post by troad »

mywittyname wrote: post #101
djbebs wrote: post #76

Earlier quoted context omitted.

Because businesses are owned by people who in turn are taxed. In effect any corporation tax is a double tax.

> In effect any corporation tax is a double tax. There are a whole host of corporate entities which allow for pass-through taxation: LLC, S-Corp, sole proprietorships, and the like. I'd be surprised if European countries didn't have similar mechanisms.

Believe it or not, they mostly don’t. It tends to be fairly binary. Corporations have legal personality, including separate tax identity, so no pass-through taxation. Sole proprietorships have pass-through taxation, but no legal personality (incl. no limit to liability).

Intermediate entities like LLCs are a relatively recent Americanism that’s unusual in the rest of the world.

Re: EU adopts global minimum 15% tax on big business

#198

Post by MuffinFlavored »

cwkoss wrote: post #164
martinald wrote: post #25

This isn't really as big a deal as it's been made out to be, IMO. This is Pillar 2 of the OECDs tax reform for corporations. Pillar 1 is much more interesting, and would require corporations to actually book profits where they are made (so not putting everything through Ireland for example). This will have a much bigger impact imo than this 15% ruling, because right now there are a bunch of tricks you can use to get…

Is this a tax on profits? If so, I worry it will remain weak to hollywood-accounting attacks: it's easy to spend money until there are no 'profits'. I'd really love to see progressive taxation of corporate revenue: the bigger a company is the higher the tax rate. Huge corporations benefit from economies of scale, so there is an incentive for power concentration. This power concentration is bad for society: it deliver…

> it's easy to spend money until there are no 'profits'.

Will we ever live in a society where you aren't allowed to "write off" R&D/depreciation/the typical things companies use to avoid profits?

We want companies to reinvest their profits into growth to hire more employees, right?

Where do we draw the line to make it harder for them to do so?

Re: EU adopts global minimum 15% tax on big business

#199

Post by nine_k »

spywaregorilla wrote: post #196
cwkoss wrote: post #164

Earlier quoted context omitted.

Is this a tax on profits? If so, I worry it will remain weak to hollywood-accounting attacks: it's easy to spend money until there are no 'profits'. I'd really love to see progressive taxation of corporate revenue: the bigger a company is the higher the tax rate. Huge corporations benefit from economies of scale, so there is an incentive for power concentration. This power concentration is bad for society: it deliver…

Great way to kill off low margin important industries like steel

Subsidies would help then!

Only half-ironic though. There is a problem with industries that are viable and important in the longer term, but are at risk of being shut down in shorter terms due to market fluctuation. Subsidies help them off the ground on one hand, but ossify their structure and skew the incentives (by definition) on the other hand.

Re: EU adopts global minimum 15% tax on big business

#200

Post by DreadY2K »

MuffinFlavored wrote: post #198
cwkoss wrote: post #164

Earlier quoted context omitted.

Is this a tax on profits? If so, I worry it will remain weak to hollywood-accounting attacks: it's easy to spend money until there are no 'profits'. I'd really love to see progressive taxation of corporate revenue: the bigger a company is the higher the tax rate. Huge corporations benefit from economies of scale, so there is an incentive for power concentration. This power concentration is bad for society: it deliver…

> it's easy to spend money until there are no 'profits'. Will we ever live in a society where you aren't allowed to "write off" R&D/depreciation/the typical things companies use to avoid profits? We want companies to reinvest their profits into growth to hire more employees, right? Where do we draw the line to make it harder for them to do so?

Those things are fine, but many companies will e.g. register a separate company in a tax haven, give that company a piece of IP, and then have that company charge the original company for all of their profits. That way, the company has no profits to report, but the money wasn't reinvested in any way, just routed around profits taxes.
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