G20 agrees to push ahead with digital tax • Hacker News Board

Re: G20 agrees to push ahead with digital tax

#11

Post by toyg » Mon, Jun 10, 2019, 12:30 PM UTC

tedeh wrote: post #3

I wonder how this is going to affect small businesses selling digital services to different countries within the EU while only having one office/country of incorporation. "The first pillar is dividing up the rights to tax a company where its goods or services are sold even if it does not have a physical presence in that country."

That’s an unehlpful principle, imho. It might be more practical to “tax up”, which is the traditional approach we have followed throughout the ages. We could build a g20 organism that accumulates revenue from all global companies and redistributes it on projects that make a difference on an equivalent scale, in things like energy, transportation, health, environment preservation, space exploration and so on. Obviously there would be issues of governance to sort out, as it’s always the case, but we’d be inching forward towards global cooperation on “humanity scale” - something that we will need, eventually, if we really want global peace under democratic rule.

Re: G20 agrees to push ahead with digital tax

#12

Post by free652 » Mon, Jun 10, 2019, 12:35 PM UTC

pennaMan wrote: post #10

mfatica wrote: post #6

Earlier quoted context omitted.

Can you provide some examples there support this claim of a "winner-takes-it-all economy"?

Facebook, Apple, Amazon, Netflix and Google should suffice.

All of them complete between themselves, that's a bad example.

Re: G20 agrees to push ahead with digital tax

#13

Post by shaki-dora » Mon, Jun 10, 2019, 12:36 PM UTC

toyg wrote: post #11

tedeh wrote: post #3

I wonder how this is going to affect small businesses selling digital services to different countries within the EU while only having one office/country of incorporation. "The first pillar is dividing up the rights to tax a company where its goods or services are sold even if it does not have a physical presence in that country."

That’s an unehlpful principle, imho. It might be more practical to “tax up”, which is the traditional approach we have followed throughout the ages. We could build a g20 organism that accumulates revenue from all global companies and redistributes it on projects that make a difference on an equivalent scale, in things like energy, transportation, health, environment preservation, space exploration and so on. Obviousl…

Even the EU does not have the power to tax. It’s practically impossible that a rather informal forum like the G20 would be granted such authority.

Re: G20 agrees to push ahead with digital tax

#14

Post by shaki-dora » Mon, Jun 10, 2019, 12:55 PM UTC

GolDDranks wrote: post #5

"The U.S. government has voiced concern in the past that the European campaign for a “digital tax” unfairly targets U.S. tech giants." How about admitting that the U.S. tech giants unfairly use their monopolistic powers because the Internet has become a winner-takes-it-all economy.

The issue isn’t so much any anti-competitive misbehavior. Even though there are some specific practices that have landed FAANG in hot waters, those aren’t really different from any other companies’ of similar size.

Monopolization just happens to be the natural state of any system that has network effects and where all costs are front-loaded (I. e. write the code once, scale to billions of users at, if you squint, zero marginal costs).

But neither of these issues are the motivation for calls for a “digital tax”. Nor is economic nationalism. There have always been industries that were dominated by one or just a few countries: the US has media/entertainment, consumer goods manufacturing has almost entirely moved to Asia, etc.

What’s different about “digital” is that requires essentially zero presence or taxable activity at the consumers’ location. Nobody felt the need to tax Hollywood’s movies because a ticket to ‘Titanic’ in Austria may have meant 2€ leaving the country, but the bulk of it actually stayed in the local economy, as (taxed) revenue of the theatre, local distributors, corn growers, and breweries.

For physical products, this is even more obvious. French champagne served in a Billings, Montana restaurant is about 50% margin for the venue, 30% for the US-based distribution chain, and only 20% goes to funny mustaches people in striped shirts.

Re: G20 agrees to push ahead with digital tax

#15

Post by motohagiography » Mon, Jun 10, 2019, 1:23 PM UTC

Related to a comment I made on another thread about identity, FANG companies have two leverage points in this discussion. One is they can adjust their features to the countries in question, as few democratically elected governments could win an election if their population couldn't have iphones, amazon delivery, or netflix.

The second is that without the US, sanctions against these companies are unenforceable, these companies own the digital identities of those populations, so those countries can only enforce data laws at the discretion of US authorities. They are increasingly an arm of US policy.

The bargaining chips now are between the US wanting to regulate them domestically, and foreign countries wanting control and taxation. IMO, the deal proposed by US legislators will be, "deal with us, or them," where the US can offer protection and moderate taxation in exchange for more direct surveillance and policy levers.

The real danger is new foreign tax obligations will likely be leveraged to break up the founder dictatorship equity model and create a scramble for their data assets.

Re: G20 agrees to push ahead with digital tax

#16

Post by Pungsnigel » Mon, Jun 10, 2019, 1:24 PM UTC

pennaMan wrote: post #10

mfatica wrote: post #6

Earlier quoted context omitted.

Can you provide some examples there support this claim of a "winner-takes-it-all economy"?

Facebook, Apple, Amazon, Netflix and Google should suffice.

They compete between themselves and also has several external competitors?

Re: G20 agrees to push ahead with digital tax

#17

Post by TheOtherHobbes » Mon, Jun 10, 2019, 1:33 PM UTC

free652 wrote: post #12

pennaMan wrote: post #10

Earlier quoted context omitted.

Facebook, Apple, Amazon, Netflix and Google should suffice.

All of them complete between themselves, that's a bad example.

I wasn't aware Facebook has its own hardware ecosystem or music delivery store, Google does grocery deliveries, and Apple runs its own open import and reseller market.

The "competition" is pretty nominal at this point. The areas of competitive overlap are much smaller than the areas of monopolistic market dominance.

Re: G20 agrees to push ahead with digital tax

#18

Post by toyg » Mon, Jun 10, 2019, 1:33 PM UTC

shaki-dora wrote: post #13

toyg wrote: post #11

Earlier quoted context omitted.

That’s an unehlpful principle, imho. It might be more practical to “tax up”, which is the traditional approach we have followed throughout the ages. We could build a g20 organism that accumulates revenue from all global companies and redistributes it on projects that make a difference on an equivalent scale, in things like energy, transportation, health, environment preservation, space exploration and so on. Obviousl…

Even the EU does not have the power to tax. It’s practically impossible that a rather informal forum like the G20 would be granted such authority.

The EU can’t tax directly... yet. It’s inching closer, though, with each subsequent “sovereign crisis” and the looming inevitability of easier mechanisms for fiscal transfers.

I agree that it’s unlikely the g20 could or would do this tomorrow; I just think it’s what we should eventually aim for, and establishing principles against this so early-on is, imho, a mistake. But I guess I shouldn’t complain about what is, overall, positive news.

Re: G20 agrees to push ahead with digital tax

#19

Post by [deleted] » Mon, Jun 10, 2019, 1:42 PM UTC

motohagiography wrote: post #15

Related to a comment I made on another thread about identity, FANG companies have two leverage points in this discussion. One is they can adjust their features to the countries in question, as few democratically elected governments could win an election if their population couldn't have iphones, amazon delivery, or netflix. The second is that without the US, sanctions against these companies are unenforceable, these…

[deleted]

Re: G20 agrees to push ahead with digital tax

#20

Post by ptah » Mon, Jun 10, 2019, 1:44 PM UTC

motohagiography wrote: post #15

Related to a comment I made on another thread about identity, FANG companies have two leverage points in this discussion. One is they can adjust their features to the countries in question, as few democratically elected governments could win an election if their population couldn't have iphones, amazon delivery, or netflix. The second is that without the US, sanctions against these companies are unenforceable, these…

tongue firmly in cheek: people may actually be motivated to elect officials that cause them to scale back operations in their countries