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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

#111

Post by nostromo »

klmadfejno wrote: post #93
nostromo wrote: post #11

Earlier quoted context omitted.

This isn't a great article. It's more about the politics than the actual proposal. Bloomberg has a better write up: https://www.bloomberg.com/news/articles/2021-04-08/plans-for... To answer your question, this wouldn't create a new organization to collect a global tax. Instead it would give the IRS the authority to tax American companies (say, Google) an additional amount on their overseas earnings. So, if they paid…

Why do other countries need to sign the agreement? They don't really seem like they have any part in this process.

Because if the US did this by itself, all of our crown jewel companies might leave. So the agreement is an attempt to prevent that from happening.

It could still happen. Maybe Amazon would move to the Bahamas, or any other country that doesn't sign the agreement. But the hope is that if most industrialized countries sign on, then that risk would be minimized.

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

#112

Post by onlyrealcuzzo »

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.

"Wherever it is made" is simple when it comes to tech.

And, anyway, almost nothing tech is made in the US.

The IRS has a (separate?) issue to deal with this - that countries will pay tax primarily based on the country where the sales take place.

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

#114

Post by teachingassist »

treespace88 wrote: post #90
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…

I would imagine many CEOs being on board with this. If your competitors are using these loopholes, you have to as well. It’s the individuals that shield their wealth by using international corporations that stand to lose the most.

From a corporation's point of view, it's fine if your competitors are treated the same as you are (in a competitive market).

But, even if so, CEOs/board members are often those high net worth individuals. So there's a potential conflict of interest that isn't resolvable.

This explains why corporations will lobby against a minimum tax, even if the institution doesn't ultimately care.

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

#115

Post by sagarm »

disabled wrote: post #73
HWR_14 wrote: post #56

Earlier quoted context omitted.

There is some fraud and abuse, of course. And the huge numbers involved mean that even a small percentage of fraud is a huge number. But there never seems to be any statistics that back up the assertion that government (in general) or the US government (in particular) produces outrageous amount of fraud or abuse.

That is correct, and many of my family members are American accountants and/or CPAs. I suspect that this individual is mixing "fraud and abuse" for "things I don't like and/or agree with paying Uncle Sam [the US government taxman] for". But, that is just a part of life for just about everyone who pays taxes. If the above individual wants to see widespread corruption, you may want to check out some European Union coun…

> nepotism is the modus operandi

It's pretty clear that a huge chunk of the US doesn't consider nepotism corruption, given the complete lack of repercussions to Trump for hiring his family into the White House.

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

#116

Post by alexpetralia »

the_optimist wrote: post #96

It’s not about a level, it’s about the rule. To everyone who says “15% is fair,” consider what you’ll feel like at 70% marginal. Literal global rule. Some would call that overreach.

This is like pretending only binaries matter (rule/not rule) vs. gradations on a continuum.

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

#117

Post by zionic »

jhedwards wrote: post #78
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.

I'm surprised to hear this sentiment, but honestly I think there's a huge amount that the government does that is invisible to most citizens. When I lived in China, I was shocked not by how controlled it was (which is what I expected given the western vision of China) but by how chaotic and uncontrolled it was compared to the US. Everything from food, health, and safety inspection, to the enforcement of traffic laws,…

>I'm surprised to hear this sentiment, but honestly I think there's a huge amount that the government does that is invisible to most citizens.

It's invisible because it provides no true value to them.

Right now you and I are paying for some NSA hacker to compromise American telecom networks, 13 carrier battle groups to put around the ocean doing nothing, literal armies of people in a hundred plus bases on literally every continent that provide NEGATIVE value to your average person on the street, and so much more.

Your car has broken down and you can't afford to fix it, while the government has taken ten grand from you in the last 12 months that could have purchased you a new car. But it's ok, some overpaid bureaucrats are making real progress in abstract geopolitical interests in a country you can't even find on a map! It's a simple example, but people really underestimate how much more they'd have in their pocket if the government wasn't siphoning off cash at every step on the economic cycle. Look at the number of people struggling, and imagine how much we could relieve that by simply stealing less from them.

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

#118

Post by milesvp »

gamblor956 wrote: post #43
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.

Most of the West treats transactions between companies and their disregarded subsidiaries as not occurring for tax purposes (i.e., the transactions are "disregarded"). They should expand that principle to simply disregard transactions between all members of a conglomerated or commonly owned group.

I might be tempted to take it a step further, and say that any interaction that would be taxed between businesses should be taxed if the same interaction happens internally. I really don’t like that the system seems to encourage acquisitions and mergers. If I buy a marketing firm so I don’t have to keep paying another firm for marketing, all those taxable events are now gone. I know my proposal starts to break down quickly and can lead to an accounting nightmare, but it seems like sort of a starting place to meditate on this topic.

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

#119

Post by randomopining »

anm89 wrote: post #113

The fact that everyone views it as normal for the US to endorse global tax laws is pretty frightening

The fact that nations can syphon off tax dollars from companies that create nothing in their lands is pretty frightening. Rentier effect x 100.

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

#120

Post by cle »

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.

"Just close the loophole" to me sounds like "just fix the bugs" in an API used by every person in the country. That would be an enormous undertaking, not something you "just do". Most likely many benign people rely on particular combinations of these rules such that changing them might have terrible consequences for them. And some loopholes are likely similar combinations of rules, and removing those might create others unexpectedly.

An expert weighing in on the specifics would be nice, since I'm just speaking in vague generalities b/c I don't actually know the specifics, I can only compare it to my experiences in software.

I'm also not arguing that it's not worth doing, just that it's probably not as easy as "just" doing it.

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