11–20 of 89 posts
Presumably the political logic to Tech Giants is: agree to higher taxes, unperson our political and ideological opponents, and we won't break you up?
Whether or not we see such a harmonized tax rate emerge and even if we could find a way to have some governing body “enforce” it, you’d still see countries lowering their effective tax rates to lure firms or bolster growth. I bet there’s a maximum sustainable effective corporate tax rate, but I have no idea what it is (and for all I know it could be zero or negative).
Can these small countries who offer the low rates stand up the US sanctions and tarrifs apparatus. The US has alot of strings to pull to make these tax havens cooperate. Thats a nice export industry you have there, would be a shame if something were to happen to it wink nudge.
For instance, you could have a country change what it considers to be “profit” so that you’re paying $2 on $100 of revenue, whereas in the neighboring country you’d be paying $6. Same nominal tax rate, different effective tax rates.
There are even more ways to play this: “Sure, we tax you at the required 20%, but you can then direct how those funds are used to reduce costs you’d otherwise have to pay directly.”
And this happens a ton— see the WTO and “effective” but not nominal tariffs.
My theory is that inequality is simply the result of globalization and it's not necessarily a bad thing. If you had build the most successful retail business, in 1900 you would own the market in your town; in 1950 in your country; in 2020 you'd own the world (or a big part of it). The opportunity is just a lot bigger now than 50 years ago and that trickles down. Also technology enables goods and services to be produc…
That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.
That doesn't seem fair to the smaller (sovereign) countries who want to set their own tax laws to incentivize companies to do business there. In fact, it seems fundamentally outrageous that one country should be able to dictate anything about tax laws in another country. Wars have been fought over such abuses of power.
This is a wild misunderstanding of how the world actually works. Welcome to Realpolitik.
My theory is that inequality is simply the result of globalization and it's not necessarily a bad thing. If you had build the most successful retail business, in 1900 you would own the market in your town; in 1950 in your country; in 2020 you'd own the world (or a big part of it). The opportunity is just a lot bigger now than 50 years ago and that trickles down. Also technology enables goods and services to be produc…
I don't want to sound like some kind of hardcore Austrian fundamentalist, because I'm not. Taxes are fine, but levying them on fictitious non-person entities is just a means of obscuring to voters where the tax burden ultimately lies. All taxes are paid by individuals, either directly, or by corporations raising or lowering the prices they charge and prices they pay, to suppliers, employees, owners, and customers. But this just means who bears the burden is now an opaque function of relative bargaining power and price elasticity of supply and demand.
But that is not what we want from tax rates. We want them to be an open, transparent reflection of democratically passed laws. To that end, it is far better to levy taxes directly on suppliers, employees, owners, and customers of businesses, rather than on the businesses. This would also have the nice side effect of causing businesses to choose where they locate headquarters and factories based on something other than comparative tax rates, reducing an avenue of both dead weight loss and potential corruption.