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40% of multinational profits are shifted to tax havens each year

missingprofits.world

11–20 of 167 posts

Re: 40% of multinational profits are shifted to tax havens each year

#11
Corporations being able to book their profits wherever they find it most convenient to book them, is utterly unreasonable. They make their profits in specific markets, and should be paying their taxes there. Profits made from selling in the US should be paid in the US, profits made from selling in Germany should be paid there.

The problem is, profits are the end result of a lot of complex corporate operations across many countries. Who's to say which bit of which revenue was used to pay for which costs, while other bits are pure profit?

There is another corporate tax that is entirely linked to the market they're selling to, though: VAT. The problem is: it's only over revenue made from selling to consumers, not to other businesses, and it's always completely offloaded to those consumers, and therefore not really a corporate tax but a consumption tax.

So how about treating profits that way? In every market, you count the revenue made from selling in that market, and subtract the costs made by buying, hiring, etc in that market. The difference is the profit you made in that market, and you've got to pay your corporate tax over that amount to the tax authority in that market.

That way you can't book your profits in a country where you didn't make any revenue. And if somehow you do make your revenue in a country where you didn't make incur costs, you pay tax over the entire amount. If you don't make revenue, then tough. You could have made some tax-free revenue there.

I'm no international tax lawyer, though, so there are probably problems with this idea. I like the principle, though: they've got to pay back to the market they're profiting from, and not to a completely unrelated country that offers them tax breaks for coming there.

Re: 40% of multinational profits are shifted to tax havens each year

#14

I am fairly certain 40% of all citizens would shift their income to a tax haven if possible.

Might be interesting if you could use something like a pooled earnings fund secured and collateralized by some kind of smart contract, thereby achieving sufficient economies of scale to allow for the "non-hyperrich" to get some of these tax savings.

Someone should pitch this to the Mossack Fonseca guys.

Re: 40% of multinational profits are shifted to tax havens each year

#15
post #4

Corporations already pay myriad income taxes and distributed profits (capital gains and dividends) are taxed, paid by the recipient. Corporate tax is double taxation and is inefficient. The optimal corporate tax rate is zero and I wish people would understand this. 35% corporate tax rate the US had before the tax cut was completely absurd and the only corps that paid it were small ones that didn’t have in house staff…

I think the idea is that taxes aren't only evaded at the level of the firm. Shareholders also evade taxes, but through "double taxation" they might still end up paying something.

Re: 40% of multinational profits are shifted to tax havens each year

#16
post #4

Corporations already pay myriad income taxes and distributed profits (capital gains and dividends) are taxed, paid by the recipient. Corporate tax is double taxation and is inefficient. The optimal corporate tax rate is zero and I wish people would understand this. 35% corporate tax rate the US had before the tax cut was completely absurd and the only corps that paid it were small ones that didn’t have in house staff…

[deleted]

Re: 40% of multinational profits are shifted to tax havens each year

#19
post #6

Earlier quoted context omitted.

That's exactly how I feel about it. I don't think "paying" taxes are something that is honorable. The money is removed from you forcefully.

Honestly, I'm down for paying taxes. It pays for my lifestyle and is propostional to my lifestyle. If I own land, that land is only valuable due to the society that land exists in. It's protected, and safe, due to public services like roads, which law enforcement, fire control folks, postal service, and ambulances drive upon. I've earned my income from a lifetime of education, starting from my public school kindergar…

> It pays for my lifestyle

No it doesn't. You're deluded, a hypocrite or a liar.

Re: 40% of multinational profits are shifted to tax havens each year

#20
post #9

Wow. Power , in all its forms -- economic, cultural, social, political -- is highly concentrated among impersonal giant corporations today. For this kind of legal tax avoidance would be impossible without mutual understanding, collaboration, and coordination across national boundaries among many disparate groups of people, all serving their corporate masters in one way or another (as their employers, as their custome…

> Power ... is highly concentrated among impersonal giant corporations

That power ultimately belongs to the billionaires that own the relative majority of stocks. The faceless companies are just proxies.

This is where wealth inequality comes from.

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