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U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

nytimes.com

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Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#101

Post by disabled »

x3n0ph3n3 wrote: post #82
somethingwitty1 wrote: post #66

Earlier quoted context omitted.

I always find this kind of thought interesting. The government provides a ton of things. Do you use public roads or sidewalks? Do you live, work or shop in a structure that adheres to building codes? Do you have power? Do you have access to the internet? Do you enjoy food that doesn't kill you? So many of these things wouldn't be possible for the general population without government. It takes money to operate a gove…

Everything you described is done with less than 15% of total spending budget that the U.S. currently allocates. The vast majority goes to paying for military spending and benefits to people who pay very little tax.

> benefits to people who pay very little tax

This is extremely misinformed.

Social Security Retirement, Survivors, and Disability Insurance are entitlement programs, and by far account for the vast majority of this budget (along with the Medicare that most of these individuals are entitled to have). You do not have a right to it, and you are obligated to participate in the insurance program by paying taxes. They are payed for by the individual worker and in some cases, partially, by the employer, via FICA taxes deducted from your US paycheck. Other taxes may be withheld from your paycheck, which lower income individuals will get money back from the IRS for, upon filing their taxes. But, this is not the case for FICA taxes.

The issue is that actuaries have not properly estimated the costs of things like Medicare, and then Congress has really never updated the tax code to account for proper FICA taxes for future projections.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#102

Post by zionic »

dmautz wrote: post #65
zionic wrote: post #32

Earlier quoted context omitted.

As a US taxpayer who sees the fraud, abuse, and general mismanagement of my tax money why would I willingly support the same government getting more? It is incredibly depressing how little I get from the government vs how much they take from me. The entire system is a sham and I honestly don't want to support it anymore. I'm working as hard as I can to try and escape it at the earliest possible moment.

Although there is mismanagement, fraud, and abuse sometimes the alternative, not having that service, is worse. There is a balance usually.

> not having that service, is worse.

Is it really? We could eliminate entire sectors of the federal government and your average person would have no clue. Why do we need 18 intelligence agencies? Why do we need 13 carrier battle groups? What, exactly, do our 100+ overseas bases do for the average tax payer?

None of it makes sense in a supposedly representative government where those who slave away and pay for it get a say in how things are run, or where their collective effort is spent. The current distribution however makes perfect sense if said representative government is an illusion and the taxpayers instead really work to supply the whims of an unelected and unaccountable few. They want to play the great game, and you're gonna go to work to pay for it or we'll send men with guns to your house to take you away. This underlying threat of violence underpins every aspect of our civilization.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#103

Post by 627467 »

mgolawala wrote: post #75
0xB31B1B wrote: post #48

Pretty hype about this TBH. There is a long history of companies domiciling in say, Monaco, The Cayman Island, Panama etc to avoid taxes and regulations where they mainly operate. My understanding is that the current process in vogue for the mega cap companies is the "double irish dutch sandwich" https://www.investopedia.com/terms/d/double-irish-with-a-dut... No one, including tax lawyers, will tell you with a straig…

Does anyone know why this approach would be preferred over the use of VAT (Value added tax) instead of a corporate profit tax? I recall a US presidential candidate in the most recent election cycle mentioning this as the solution to the current corporate tax avoidance problem. In fact it was a major part of his campaign. I am not very knowledgeable of the downsides of a VAT approach and how it could be gamed, but wha…

VAT is a very regressive tax. All consumers would be taxed the same regardless of their income.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#105

Post by vladvasiliu »

ksec wrote: post #70
codeecan wrote: post #37

If they would just close the loop holes that allow things like having Apple, setup a subsidiary that licenses its own stuff back to itself so it can move profits around the world ... you'd solve this problem. Make a rule, if you own >50% of a company, you can't buy trademarks, patents, whatever from yourself.

You then end up having FAANG setting a company called FAANG which each FAANG owns exactly 20% of the FANNG companies and the sole purpose was to relicensing trademarks patents or whatever. At the end of the day moving profits around isn't illegal and I dont see how banning it solves that problem. As long as it is taxed somewhere, which is what all country cares.

> At the end of the day moving profits around isn't illegal and I dont see how banning it solves that problem. As long as it is taxed somewhere, which is what all country cares.

Well, that's the crux of the matter, isn't it?

Because they actually are taxed "somewhere", it's just that this usually tends to be a place with very low taxes. We're not talking tax evasion here, but actually legal ways of paying the least tax possible.

The issue with this approach is that some countries can attempt to undercut others with taxes. Of course, this could be seen as "capitalism at work", why should a country charge (tax) more if they can get by with less by being more effective?

The issue is that this doesn't happen in a vacuum. And if BigCorp makes a ton of profit in HiTaxCountry it's likely because the good conditions there are afforded by the taxes (which pay for education, infrastructure, etc). Whereas LoTaxCountry is usually some small island nation with next to no one actually living there, which means little cost for infrastructure, etc, so of course they can get by with next to no taxes. Even though "next to no taxes" on billions and billions of dollars can actually make up quite a hefty amount for a minuscule country.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#106

Post by wolfi1 »

mgolawala wrote: post #75
0xB31B1B wrote: post #48

Pretty hype about this TBH. There is a long history of companies domiciling in say, Monaco, The Cayman Island, Panama etc to avoid taxes and regulations where they mainly operate. My understanding is that the current process in vogue for the mega cap companies is the "double irish dutch sandwich" https://www.investopedia.com/terms/d/double-irish-with-a-dut... No one, including tax lawyers, will tell you with a straig…

Does anyone know why this approach would be preferred over the use of VAT (Value added tax) instead of a corporate profit tax? I recall a US presidential candidate in the most recent election cycle mentioning this as the solution to the current corporate tax avoidance problem. In fact it was a major part of his campaign. I am not very knowledgeable of the downsides of a VAT approach and how it could be gamed, but wha…

simple, VAT is paid by the customer not by the corporation

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#107

Post by Retric »

bpodgursky wrote: post #72
Retric wrote: post #52

Earlier quoted context omitted.

You’re assuming a 1:1 relationship between company country and stockholder’s country. That’s simply no longer even remotely true. So, in practice lowering US corporate taxes is a tax break on the Saudi royal family etc and a net increase in taxes for American citizens.

The US could tax dividends and cap gains for foreign shareholders, if it wanted.

The backlash of foreign countries taxing both their companies and US investors would also make such a change a net loss for American citizens. By far the best option is to just raise taxes on US companies and thus lower taxes on American citizens.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#108

Post by [deleted] »

coliveira wrote: post #86
onlyrealcuzzo wrote: post #41

Earlier quoted context omitted.

How else do you solve this in the US? Company A sells all of its IP to Ireland. They have the Irish company charge them 100% of the profits for IP. Poof. No US taxable income. What's your magic beans solution for this beside what the IRS plans to do?

It is very simple: just make corporate profits for US corporations (or more sensibly, the difference in taxes) taxable on the US, wherever it is made. This is already the rule for individuals.

[deleted]

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#109

Post by s_dev »

0xB31B1B wrote: post #48

Pretty hype about this TBH. There is a long history of companies domiciling in say, Monaco, The Cayman Island, Panama etc to avoid taxes and regulations where they mainly operate. My understanding is that the current process in vogue for the mega cap companies is the "double irish dutch sandwich" https://www.investopedia.com/terms/d/double-irish-with-a-dut... No one, including tax lawyers, will tell you with a straig…

>My understanding is that the current process in vogue for the mega cap companies is the "double irish dutch sandwich"

You're understanding is outdated this mechanism is finished as of 2018.

https://en.wikipedia.org/wiki/Double_Irish_arrangement

However this article is a little biased -- it's main contributor is a user called "Britishfinance" -- who appears to be a London based corporate shill to take the heat off the City of London being a tax haven.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#110

Post by sagarm »

x3n0ph3n3 wrote: post #82
somethingwitty1 wrote: post #66

Earlier quoted context omitted.

I always find this kind of thought interesting. The government provides a ton of things. Do you use public roads or sidewalks? Do you live, work or shop in a structure that adheres to building codes? Do you have power? Do you have access to the internet? Do you enjoy food that doesn't kill you? So many of these things wouldn't be possible for the general population without government. It takes money to operate a gove…

Everything you described is done with less than 15% of total spending budget that the U.S. currently allocates. The vast majority goes to paying for military spending and benefits to people who pay very little tax.

> benefits to people who pay very little tax.

By which you mean Social Security, Medicare, and Medicaid? Those programs have broad public support.

https://www.cbo.gov/publication/56324

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