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

missingprofits.world

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

#121

Post by rolltiide »

cs702 wrote: 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…

I’m glad you are questioning your views on taxation and concentration.

These things don’t happen in a vacuum and the non-participant’s view is highly distorted and intentionally manipulated.

Exhibit A is the IRS’ role. For most people the IRS is viewed as an adversary that retroactively attacks them and unilaterally decides how much that person will pay them. For perceptive people the IRS can preemptively approve your plan of how much you won’t pay them, and most of these multinational tax saving schemes are signed off by the IRS in advance.

This reality always escapes the populist furor that results in changing a tax rate or two, primarily because the people are not exposed to it and can only imagine some arbitrary loophole and an adversarial IRS that is limited by an interpretation of a passed law. When the reality is very different and not adversarial at all.

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

#122

Post by IAmEveryone »

cs702 wrote: 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…

You're attributing this to malice, or even conspiracy. But it's just basic game theory: because international cooperation has not kept up with the mobility of capital flows, national governments succumb to the mechanics of a Prisoners' Dilemma, or race-to-the-bottom, or tax competition, or whatever you want to call it.

I'm pointing this out because when people draw the conclusion that "all politicians are corrupt" they tend to weaken the very institutions that could solve these and many other problems.

Of course there's also the fascinating tendency of the US public to empathise with corporations. That's why they can't even solve this entirely obvious dynamic within their own borders, and happily pay Amazon's taxes in an entirely zero-sum competition for HQ2.

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

#123

Post by IAmEveryone »

mcv wrote: post #72
danaris wrote: post #64

Earlier quoted context omitted.

Unfortunately, that would make some entire categories of business non-viable. Any business that relies on importing raw materials would be hit with punishing taxes—unless their margins were huge, or their local & labour costs were orders of magnitude higher than their import raw material costs, they would likely not be able to operate. Effectively, you would be taxing them on revenue, rather than profit.

They wouldn't get to deduct the costs of importing those raw materials, but they would get to deduct the costs (labour, probably) of refining them and making something out of those raw materials. And if they sell back to the country they imported raw materials from, they get to deduct the raw material costs from those profits (assuming that country uses a similar scheme). But you're right, for a company that makes th…

That's totally unworkable. That banana you buy in the supermarket is imported and sold with a gross margin in the low single-digits. Taxes the revenue at income tax levels would effectively raise prices by the tax rate, i. e. 30% or so.

If the supermarket doesn't buy the banana directly from the plantation, that tax would accrue at every step of the chain. You'd effectively be prohibiting trade and people would switch to monthly drives to local farms and an entirely potato-based diet.

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

#124

Post by IAmEveryone »

mrfusion wrote: post #40

Weren’t the corporate tax cuts supposed to help with this? Has it been helping? Isn’t the us corporate tax rate now basically competitive with other countries?

It helped in the way that legalising murder would lower the crime rate.

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

#125

Post by rolltiide »

systemtest wrote: post #3

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

More than 40% when you remove their stigmas around discussing money topics, as it only perpetuates ignorance

“Ah this person aware of the rules is playing by a more effective set of rules than we are, there are more of us so lets change the rules so our worse strategy is the only strategy, ah but we don't know which rules they are using!”

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

#126

Post by jariel »

Have a good look at that map and it's immediately evident that the starkest contrast among 'major nations' lies right within the EU itself.

The outgoing President of the EU Commission, Jean-Paul Junker was literally the architect of Luxembourg's primary tax-avoidance strategies while he was PM from 1995-2013.

Not only does this speak to primary, 'first order' divisions within a supposed economic union, but the blatant hypocrisy of their leadership (completely unelected, I might add).

One of the 'big red flags' for current EU negotiators on Brexit, an issue which lies at the heart of their negotiation strategy, is the concern that the UK will attempt to offer lower-tax status to major European entities after departure, kind of like a 'Western Singapore'. The other 'most important issue' is that of Ireland and the Irish border. It's not ironic at all, that it is in fact Ireland which has become the 'other Luxembourg', sucking taxes into it's nation from other EU nations as we've seen on these pages with Google, Apple, Dell etc..

It's beyond pale that the EU is primarily targeting foreign multinationals, most of whom are just rationally following the letter of EU was, whilst this gross imbalance perpetuates right in front of anyone willing to pay attention for a few minutes.

This is a huge issue that we need to see real leadership on very soon.

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

#127

Post by ifthenelseend »

Tax heavens have MUCH lower taxes, but they also have other benefits like very little bureaucracy, better privacy and better protection from lawsuits.

You will also have a lot of freedom managing your company. For example, if you try to move a German company to another country and that country has lower tax rate, then Germans will put additional punishing taxes on your company for the next 10 years, despite you are not living there anymore. You will never have that issue with offshore corporations.

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

#128

Post by njarboe »

cs702 wrote: 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…

It would be interesting to see how these numbers have changed since 2016 with the new US corporate tax scheme. The promise was this avoidance would be greatly reduced. I wonder if it has been?

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

#129

Post by ifthenelseend »

ifthenelseend wrote: post #127

Tax heavens have MUCH lower taxes, but they also have other benefits like very little bureaucracy, better privacy and better protection from lawsuits. You will also have a lot of freedom managing your company. For example, if you try to move a German company to another country and that country has lower tax rate, then Germans will put additional punishing taxes on your company for the next 10 years, despite you are n…

If you need an offshore corporation, it can be opened for a few hundred $, but if you need to do the same for example in Germany, then you have to pay 25000 EURO to found a GmbH.

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

#130

Post by gamblor956 »

buboard wrote: post #101
gamblor956 wrote: post #96

Earlier quoted context omitted.

Tax rates are clear and easy. Corporations were taking advantage of loopholes that increasingly no longer exist.

They are really not. E.g. i have to use a US business to collect in-game payments because accounting for all the various taxes and VAT is a f’in nightmare.

I did not say tax compliance was easy. But figuring out the rates is a simple table lookup.

Also, using a US business to collect in-game payments no longer lets you avoid VAT compliance if you sell to EU customers. Which is why you can now use an EU VAT compliance "one-stop shop" which does it all for you.

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