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US blocks crackdown on tax avoidance by net firms like Google and Amazon

guardian.co.uk

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Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#11

Post by foobarbazqux »

beedogs wrote: post #3

So, let me see if I understand this: the US is going to bat for the big software companies who don't want to pay taxes in other countries, and yet I, an expat American, am expected to file an income tax return with the IRS every single year for my foreign earnings, which may be subject to dual-taxation if I make "too much." What a crock of shit.

It's not dual taxation. The IRS deducts the foreign tax paid. So if the foreign country has a higher tax rate, you will never pay US tax. I'm not saying it's a great policy, but it isn't as bad as it sounds. You can always renounce your US citizenship - think of it as a maintenance fee. Yes, draconian.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#12

Post by hkmurakami »

beedogs wrote: post #3

So, let me see if I understand this: the US is going to bat for the big software companies who don't want to pay taxes in other countries, and yet I, an expat American, am expected to file an income tax return with the IRS every single year for my foreign earnings, which may be subject to dual-taxation if I make "too much." What a crock of shit.

"too much" being $80k last I checked, where you have to pay US taxes on any amount exceeding the $80k. (or wait, it might be that you pay the difference between your US tax rate and the foreign tax rate...)

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#13

Post by flexie »

The US IT sector is heavily subsidized. Giving Apple, Google, Facebook etc. billion dollar subsidies at home would spur trade wars. So instead the US uses its never failing ability to play European countries against eachother and its influence over smaller jurisdictions like Ireland, Netherlands, Switzerland, Guernsey, Jersey, Bahamas, Isle of Man, British Virgin Islands etc to make sure that large US corporations' foreign income - which wouldn't be taxed in the US anyways - can be kept untaxed.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#14

Post by hkmurakami »

dspillett wrote: post #9

I'm not sure why people are particularly surprised by this. Most of the large international companies that make most out of tax avoidance have large US bases. While the US economy does lose some to the schemes they use (like all the cash Apple has sat outside the US, to give a commonly quoted example) it loses less than the competing economies overall so agreeing to crack down on tax avoidance could result in a net l…

and when these US based companies eventually bring back those profits to the US (whether it be at the full current rate - unlikely - or some negotiated one time discount rate), the lower the foreign tax burden the greater the US government gains.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#15

Post by patrickaljord »

danmaz74 wrote: post #2

Let's see how this pans out. Maybe this time the UK will not play for the US team, given the outrage there about this issue, but I'm afraid that without a common EU position about this the US will be able to use their usual divide et impera tactics.

I hope the US wins. I'd rather this money stays with Google and Amazon than it goes to the EU states. Why? Because the more profit Google and Amazon make, the more value they produce for society as in more work, better technology, better life etc. What does the state do with tax money? It spends it badly and ends up creating more debt. So, it creates the opposite of value, negative value or debt, and crony capitalism because everyone wants to influence the way this money is redistributed. To give you an idea of how bad it is here, people work until the 28th of July for the state here in France because of all the taxes, if you have a company it can be even worse.

EU states are already the most taxed ones in the world and they have the biggest national debts, it's clear here that the way to fix this is not "more tax" but "less spending". For the last 60 years, spending has been skyrocketing and taxes are at the highest and are killing jobs, innovations and whole economies. Why keep spending even more by making taxes even higher than they are, this is ludicrous. It's time to admit maybe we should start spending less, not more taxes, this isn't working and hasn't worked for the last 60 years.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#16

Post by disputin »

dantheman wrote: post #4
beedogs wrote: post #3

So, let me see if I understand this: the US is going to bat for the big software companies who don't want to pay taxes in other countries, and yet I, an expat American, am expected to file an income tax return with the IRS every single year for my foreign earnings, which may be subject to dual-taxation if I make "too much." What a crock of shit.

Well I agree with you that the foreign earnings things completely crazy. Using one bad policy to argue against a good one is just as bad. This is a good move on the part of the US, what we also need is the ability to move corporate profit from foreign subsidiaries back into the US without facing tax.

"This is a good move on the part of the US" - not in terms of foreign relations.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#17

Post by cmdkeen »

dantheman wrote: post #4
beedogs wrote: post #3

So, let me see if I understand this: the US is going to bat for the big software companies who don't want to pay taxes in other countries, and yet I, an expat American, am expected to file an income tax return with the IRS every single year for my foreign earnings, which may be subject to dual-taxation if I make "too much." What a crock of shit.

Well I agree with you that the foreign earnings things completely crazy. Using one bad policy to argue against a good one is just as bad. This is a good move on the part of the US, what we also need is the ability to move corporate profit from foreign subsidiaries back into the US without facing tax.

You're missing a step though - which is that these corporations do everything possible to avoid paying the due tax on those foreign profits. I'm all in favour of getting to repatriate profits then - but taking the profits through a tax haven needs to be stopped first.

Take Google in the UK for instance. They don't "sell" anything in the UK according to their tax returns, so claim every deal is actually finalised through Ireland and therefore subject to lower Irish taxes. So their UK tax is minimal despite making large profits from there.

It provides a massive competitive advantage to companies large enough to full off these kind of operations. Google have possibly been caught out actually selling in the UK, but in most cases their conduct is legal - which is why the law needs changing.

If you want to make money in France, the UK, Germany or wherever you should pay local taxes to those countries. It would be grand if those situations could be simplified and made accessible for digital goods (which are more likely to be sold cross border).

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#18

Post by patrickaljord »

camus wrote: post #10
forgottenpaswrd wrote: post #6

It talks about France. France is a machine of expending money right now, better said, of wasting money. I am living in France this Summer, a very rich and beautiful country with a hole in the pocket. French people love to life well, and someone else to pay the bills, the Germans, the rich, whoever but not them. Mr Hollande only want to do one thing, to raise taxes. But there is never enough money when you don't expen…

You should go back to where ever you come from or wherever it is better for you to live. Sarkozy ruined France so yes now everbody needs to pay for it. And the problem is not taxes,i'm happy to pay taxes. The problem is people like French liberals ( liberals are "right-wing" in France ) that gives hand outs to their friends or vote laws without financing their them , and then all they have left is blaming the poor,th…

Sarkozy is not libertarian at all if that's what you mean by "libéral". He's just as socialist as the left when it comes to the economy. To give you an idea, Sarkozy created more than 50 taxes during his mandate [1] and didn't cut on spending while creating more social aid programs (RSA). Only in France would he be considered a libertarian or "néo-libéral" as they say just because he limited the maximum amount of tax one could pay to 50% [2]. A 50% tax makes you a libertarian, Ayn Rand disciple in France, isn't that insanity? You still have to work until the 28th of July for the State in France.

1: http://www.contrepoints.org/2012/03/07/72137-lahurissante-ac...

2: http://tempsreel.nouvelobs.com//file/318975.pdf

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#19

Post by nawitus »

cmdkeen wrote: post #17
dantheman wrote: post #4

Earlier quoted context omitted.

Well I agree with you that the foreign earnings things completely crazy. Using one bad policy to argue against a good one is just as bad. This is a good move on the part of the US, what we also need is the ability to move corporate profit from foreign subsidiaries back into the US without facing tax.

You're missing a step though - which is that these corporations do everything possible to avoid paying the due tax on those foreign profits. I'm all in favour of getting to repatriate profits then - but taking the profits through a tax haven needs to be stopped first. Take Google in the UK for instance. They don't "sell" anything in the UK according to their tax returns, so claim every deal is actually finalised thro…

The problem with preventing the use of 'tax havens' is that there's no non-arbitrary way to decide if a company is truly using another country as a tax haven, or that they are actually using developers from another country. In the Google example, Google UK is clearly benefiting from the developers that work outside UK, therefore they should be able to pay 'brand fees' or whatnot to the 'main Google'.

Of course in this case most of the development is not happening in Ireland, but how can you decide if the fees are reasonable or not? You'll either end up with a very complex tax code with loopholes (which is non-desirable), or you'll give arbitrary power to tax bureaucrats to enforce arbitrary taxes to certain companies (and this will in practise create non-just tax decisions and corruption).

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#20

Post by beedogs »

disputin wrote: post #16
dantheman wrote: post #4

Earlier quoted context omitted.

Well I agree with you that the foreign earnings things completely crazy. Using one bad policy to argue against a good one is just as bad. This is a good move on the part of the US, what we also need is the ability to move corporate profit from foreign subsidiaries back into the US without facing tax.

"This is a good move on the part of the US" - not in terms of foreign relations.

They don't seem to care much about that lately, though.
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