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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

#131

Post by icebraining »

ifthenelseend wrote: post #129
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.

You don't pay 25000€, you invest them in the company. And from what I can tell, there's a "mini-GmbH" model that avoids even that requirement.

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

#132

Post by zerocrates »

appleiigs wrote: post #110
jmcqk6 wrote: post #87

Earlier quoted context omitted.

Consumption taxes are also regressive in that in the lower your income, the harder those taxes become to pay. I would prefer a tax scheme in which you're ability to pay the tax is proportional to the taxes you owe.

It's not regressive. It's a flat tax, everyone pays the flat rate. Feels like spin when you say regressive.

The reason people call a flat consumption tax regressive is that poorer people, even though they're often buying cheaper things, generally spend a much larger proportion of their income on "consumption."

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

#133

Post by odiroot »

systemtest wrote: post #3

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

Wish I could. I'm in no way rich (middle-class); don't own my flat or a car. I still pay ~42% taxes here in Germany.

Middle class is seriously squeezed and we're not getting much back from government "services".

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

#134

Post by deogeo »

systemtest wrote: post #3

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

And more than 40% of all citizens would decline jail time if convicted of murder. You talk as if tragedy of the commons/prisoner's dilemma is something new and unknown.

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

#135

Post by mamon »

I think it is a good thing, like a free market for tax laws - you can choose the one that best suits your needs :)

More seriously though, tax havens are necessary: governments are just as greedy as corporations, so we need some means of tax avoidance, otherwise politicians would just pass a law introducing 100% tax rate on everything.

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

#137

Post by iudqnolq »

Iv wrote: post #94
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…

There is a theory saying that Brexit campaign was financed by the people afraid of the EU banking transparency laws, that would threaten many UK-based tax havens.

Then why did the financial sector campaign heavily against Brexit, and most of the employees in that sector vote against it? Brexit would make it much harder for Europeans to use British financial products.

> Britain’s financial services industry, the country’s biggest tax earner, risks being cut adrift from its main export market - the European Union - after Brexit.

https://www.reuters.com/article/us-britain-eu-finance/britai...

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

#138

Post by throwaway34241 »

mcv wrote: post #11

Corporations being able to book their profits wherever they find it most convenient to book them, is utterly unreasonable. They make their profits in specific markets, and should be paying their taxes there. Profits made from selling in the US should be paid in the US, profits made from selling in Germany should be paid there. The problem is, profits are the end result of a lot of complex corporate operations across…

I can't upvote this enough, you've just described the actual solution to this problem recommended by economists (which of course no one is interested in). It's a bit depressing to have it be almost totally absent from the conversation even on HN.

It's called a border adjustment tax, you tax at point of sale and deduct domestic factors of production. So the tax is on what's remaining (profits and foreign production costs).

For the foreign part apparently the currency exchange rate appreciates to cancel out the tax so it doesn't actually have a protectionist effect, although that's certainly not obvious to non-economists.

It was actually floated as part of tax reform a while back, and got interest from economists on the left and the right, but corporate lobbying killed it.

Of course redoing the tax code isn't simple, but this appears to actually be a totally solvable problem that doesn't require the cooperation of every country in the world or legal battles with every company about where their profits are from.

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

#139

Post by davidwitt415 »

disintegore wrote: post #62
systemtest wrote: post #3

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

This is a good point, actually. Attributing the blame to an extreme minority of people (billionaires) is counter-productive. The problem is not their individual moral failings (however numerous) but the system that permits them to exist and incentivizes their parasitic and exploitative practices.

'The system that permits them' is far too passive a voice, because the rich have aggressively gamed the system and rigged it to their advantage. The IRS is badly outgunned by armies of accountants and lawyers playing shell games and at best exploiting quasi-legal loopholes, or committing outright fraud.

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

#140

Post by Mirioron »

gamblor956 wrote: post #130
buboard wrote: post #101

Earlier quoted context omitted.

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 .

Does that one stop shop have reasonable VAT minimums yet?
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