Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg • Hacker News Board

Re: Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg

#71

Post by dogma1138 » Fri, Nov 07, 2014, 1:13 AM UTC

tomp wrote: post #23

mike_hearn wrote: post #14

Earlier quoted context omitted.

Well, this problem is fundamental to trying to tax entities that don't have any specific location. Taxing people is quite simple because you can't split a person up - just count the days they reside in a particular tax jurisdiction and once it goes over a certain number of days per year, you say "you are resident here, benefiting from our services, so pay us tax" and as long as that number of days per year is reasona…

> Companies get taxed without representation Equating companies with actual people seems to be a uniquely american view (also, complaining about "double taxation" of corporate profits). Personally, I don't think those who pay the tax are those who "deserve" to vote or be represented by politicians/laws. In my view, companies (and their investors) have the privilege of being able to profit by providing services to cit…

Taxing companies is actually very European and it dates back to the era of big trading companies such as the East Indian.. Taxing companies makes zero sense in the current market and it is not only double but triple taxation. Companies profits are taxes, however if they are not taxed any direct benefit from these profits will be taxed any how(usually at much higher rates), outside of operational expenses companies can't do much with their money which will not be taxed as releasing the profits as dividends to the share holders or owners will incur either capital gain taxes or income tax. Investing that money will incur a capitals gain tax. The only thing that a straight corporate tax does is forcing companies to operate at operational losses in order to avoid paying tax. Not having to pay tax on operational income means that the company can grow faster, hire more, divide the profits across is share holders and invest it in the market generating greater wealth. All of the above benefit the people much more than the taxes the companies pay in corporate tax. And yes abolishing the income tax in favor of a sales tax(not VAT which is a horrible solution) is much better. Sales tax means makes it much easier to reduce the tax burden on lower classes, especially in times of crisis. The economy is in the shit? reduce sale taxes on diapers and base food products.. Need more money? increase sales taxes on luxury items. Need to help young couples attaining a home reduce the sales tax on properties for people under 30. All these are much easier to adjust than income tax, allowances, and mortgages they also can be managed on the local level when others require a huge political effort to change. Also a direct sales tax is far superior to VAT, VAT is utter nonsense, sales tax is charged at every sale of the product which means that the car you bought will generate revenue for the state every time its sold. And more importantly sales tax affects everyone including companies/self employed which are exempt of VAT. Why does Google have to pay 20% less for it's care fleet or desks than you?

Re: Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg

#72

Post by brazzy » Fri, Nov 07, 2014, 7:51 AM UTC

higherpurpose wrote: post #32

brazzy wrote: post #12

Earlier quoted context omitted.

Actually, wouldn't the story have to be licensed under the same license to satisfy the terms? Is it?

You must be thinking GPL licensing?

The "share alike" variant of the cc license that was used here does seem to have similar copy left clauses.

Re: Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg

#73

Post by tomp » Fri, Nov 07, 2014, 10:03 AM UTC

dogma1138 wrote: post #71

tomp wrote: post #23

Earlier quoted context omitted.

> Companies get taxed without representation Equating companies with actual people seems to be a uniquely american view (also, complaining about "double taxation" of corporate profits). Personally, I don't think those who pay the tax are those who "deserve" to vote or be represented by politicians/laws. In my view, companies (and their investors) have the privilege of being able to profit by providing services to cit…

Taxing companies is actually very European and it dates back to the era of big trading companies such as the East Indian.. Taxing companies makes zero sense in the current market and it is not only double but triple taxation. Companies profits are taxes, however if they are not taxed any direct benefit from these profits will be taxed any how(usually at much higher rates), outside of operational expenses companies ca…

I must admit I agree with you, regarding corporate tax. Although I think it would need to be offset by a significant increase in capital gains/dividends tax, which might be hard to achieve politically.

Regarding sales tax, I don't see why VAT couldn't be manipulated in the same way. I don't know about other countries, but in Slovenia, books and food/non-alcoholic drinks have a lower VAT, and e.g. expensive cars (actually, those that have low mileage) have extra tax. The only advantage that I see of sales tax is that resale is taxed as well. Which would only obviously apply to big items (houses, cars), but people would avoid it by simply having their companies own these items.

If sales tax were to apply to companies as well (i.e. companies selling stuff to companies), I would oppose it, because it effectively penalizes a long supply chain and encourages monolithic, vertically-integrated companies.

Re: Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg

#74

Post by mike_hearn » Fri, Nov 07, 2014, 1:06 PM UTC

return0 wrote: post #62

mike_hearn wrote: post #55

Earlier quoted context omitted.

EU law functions via directives, which are implemented by governments into local law. It's a little different to the US federal system. Those southern European countries do have direct control of their own finances. They could declare bankruptcy and start over if they wanted to. When people say they are 'controlled' by Germany or whatever, those people are in a lazy and misleading way saying that those countries pref…

So in any case, EU is something a lot deeper than the UN. Wrt to wrongness, yes, it is wrong that a small country takes advantage of the openness and loopholes of global economies to funnel money in their direction. There is a simple asymmetry at the core that thei exploit: a big democratic country will never be able to lower corporate taxes because the citizens/wealth generators will protest. A tiny dictatorship or…

Yes, the Greek people really really didn't want to see the Drachma come back. They know that their corrupt and inefficient government would inflate away their currency at a prodigious rate if they went back to having their own currency and the rules imposed by the foreign lenders are really the best way to reform their governments. Kind of messed up, but there it is.

Do you seriously think Luxembourg is actually some kind of third world state that is only doing well because it has low corporation taxes? I think you should review the economies of countries painted as tax havens before concluding that. And of course big democratic countries can lower corporation taxes. If the citizens prefer not to do that, OK, that's their choice, but companies leaving is the expected outcome of that. It's not some kind of immorality on the behalf of other citizens of other countries to exploit that. Unless you're going to paint all Irish people as immoral, for example, which is absurd.

Re: Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg

#75

Post by dogma1138 » Fri, Nov 07, 2014, 10:25 PM UTC

tomp wrote: post #73

dogma1138 wrote: post #71

Earlier quoted context omitted.

Taxing companies is actually very European and it dates back to the era of big trading companies such as the East Indian.. Taxing companies makes zero sense in the current market and it is not only double but triple taxation. Companies profits are taxes, however if they are not taxed any direct benefit from these profits will be taxed any how(usually at much higher rates), outside of operational expenses companies ca…

I must admit I agree with you, regarding corporate tax. Although I think it would need to be offset by a significant increase in capital gains/dividends tax, which might be hard to achieve politically. Regarding sales tax, I don't see why VAT couldn't be manipulated in the same way. I don't know about other countries, but in Slovenia, books and food/non-alcoholic drinks have a lower VAT, and e.g. expensive cars (actu…

Because VAT is only "created" when a business sells you something, it's an archaic method that is collected by the government from the business only once. This is why VAT is usually about 10 times higher than sales tax. VAT made sense when you could not collect tax from individual easily, today with PayPal, bank transfer, Payment Cards and heck even BitCoins it doesn't make sense any more. VAT means that the first consumer gets screwed the most this also means that consumers that buy mostly perishable goods or cannot afford to buy goods in a quick cycle get the highest tax burden. If you are from a low income family which means that most of your expenses go on food means that you pay an unreasonably higher tax rate than people spend most of their money on buying new Ipads. This also means that if you cannot buy an new Ipad every year and can only afford to buy one say every 3-4 years you get stuck with the entire burden from VAT vs some one who buys a new one and sells their old one every year rolls the VAT price on the person who bought the old one. What sales tax is is a small tax added to each transaction doesn't matter if you are buying a new product or not, it also means that every time you sell the product to some one else it keeps generating capital to the state.

Also companies can't avoid paying sales TAX unlike VAT, and if your company owns a car and gives you it as a perk you have to pay value tax for it, basically it means that the taxable amount of your salary increases by a certain amount even tho you actual salary doesn't.

On the supply chain, well first long supply chains are not good for the end consumer while monopolies are not good either you should not pay for the middle man, especially not for 50 of them. That said the sales tax is only paid for goods that are intend to be used. This means that if i buy nails from you as a vendor i do not pay sales tax because I'm not the end consumer, if i buy nails to make a furniture i pay it because I'm consuming it. The fact that the EU still uses VAT while pretending to spearhead the evolution of human society is still mind boggling.