Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

bloomberg.com

Post reply on HN
Print view View original

181–190 of 314 posts

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#181

Post by Faark »

lovich wrote: post #121
lovich wrote: post #101

Why are a large amount of people treaing access to other nations markets as a human right? I can see the argument behind saying you should have access to your local market be realtively free, you have to live somewhere, and you and your local societies interests are relatively aligned. However,when it comes to foreign markets many people here seems to want the best of both worlds. It's a paraphrase but it seems like…

As a response to several people stating that free trade is better for everyone. I've taken economics courses, I understand how free trade is better overall. However, those calculations only work when both sides follow the same rules. Once you have different groups of people with different values, whether it's the EU valuing privacy, China valuing domestic production, or the US valuing intellectual property, absloute…

Isn't it still free trade having to comply with local regulation? As long as those regulations treats foreign companies/products the same as local ones, of cause.

Import taxes or valuing domestic production/owners are not, but i don't see a problem with requiring food not to contain toxic stuff, no matter what country it comes from.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#182

Post by danbruc »

barry-cotter wrote: post #162
asdfaoeu wrote: post #156

Earlier quoted context omitted.

He is admitting those benefits. His point is that with different tax rates and regulations the market is distorted and if anything imposing tariffs / revenue taxes is just equalising the market. I don't think he's talking literally about units.

If other people do stupid things you don’t have to do stupid things too. Market distortions, different tax rates and regulations do not change how returns to specialisation and gains from trade work. Anti-dumping tariffs are stupid because it not notnto your benefit to punish people for giving you cheap stuff that should be expensive. Being able to have different tax rates is part of the power to tax, which is part o…

Anti-dumping tariffs are stupid because it not notnto your benefit to punish people for giving you cheap stuff that should be expensive.

That is only true in a very simplistic model. If a country sells for example cheap subsidized steel you may lose your steel production capability because you are not able to compete with that price. But once you lost that capability it may become prohibitively expensive to regain it because the initial costs to rebuild the knowledge and infrastructure is going to be much higher than the marginal costs for an established industry and you would have to accept, at least to some extend, which ever price they ask for. The other country may also be able to offer a lower price due to externalities, for example exploitation of their workers or environmental destruction, and you may want to compensate for that.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#183

Post by bobcostas55 »

barry-cotter wrote: post #162
asdfaoeu wrote: post #156

Earlier quoted context omitted.

He is admitting those benefits. His point is that with different tax rates and regulations the market is distorted and if anything imposing tariffs / revenue taxes is just equalising the market. I don't think he's talking literally about units.

If other people do stupid things you don’t have to do stupid things too. Market distortions, different tax rates and regulations do not change how returns to specialisation and gains from trade work. Anti-dumping tariffs are stupid because it not notnto your benefit to punish people for giving you cheap stuff that should be expensive. Being able to have different tax rates is part of the power to tax, which is part o…

> But once you lost that capability it may become prohibitively expensive to regain it because the initial costs to rebuild the knowledge and infrastructure is going to be much higher than the marginal costs for an established industry and you would have to accept, at least to some extend, which ever price they ask for.

This has literally never happened. People keep bringing up this objection, but nobody can point to a single instance of it ever happening. It's irrelevant.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#184

Post by barry-cotter »

TheAdamAndChe wrote: post #169
barry-cotter wrote: post #159

Earlier quoted context omitted.

The case for free trade does not care about borders. It cares about consumption, which there will be more of if things can be produced most efficiently. Things can be produced most efficiently with maximum specialisation, which is likeliest with free trade. Domestic production can be consumed more easily than foreign production so it is more valued because transport costs are lower. The border between San Francisco i…

> It cares about consumption, which there will be more of if things can be produced most efficiently. This is part of the problem. Production doesn't occur in a vacuum, and the most efficient methods of production are often either terrible for the workers, terrible for the environment, or terrible for society. Pure, unfettered globalization would be ideal if the goal was production and wealth generation maximization…

If you look at where most of the world’s wealth is produced and how your worries may be allayed. The US and the EU are almost half of the world economy by themselves. Add Canada and Japanand you’re comfortably above half.

If there are problems caused by economic growth the products of said growth can buy solutions to them.

https://en.m.wikipedia.org/wiki/Kuznets_curve#Environmental_...

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#185

Post by mtgx »

cromwellian wrote: post #37
mtgx wrote: post #25

Earlier quoted context omitted.

Nothing is really changing in terms of taxation. Technically, the difference is relatively small - being taxed a small percentage of revenue instead of a larger percentage of profit (yes I know it's debatable which would be ideal). The really big difference is they can actually enforce revenue-based taxation, because revenue in a country is directly tied to the number of users/customers in that country. Meanwhile, pr…

People are up in arms about China as well, and IMHO, the US and EU should take them to the WTO over unfair trade practices. But stop focusing on Google for a moment, and consider poor Twitter. Can they really afford this tax? If you're already losing money, or breaking even, why should you have to pay taxes on $$$/user earned in the US or Japan?

Okay, let's consider Twitter. So what's this nonsense about having companies run on "break-even" or at a loss for 10 years or more? Especially when these businesses are worth tens of billions of dollars. It doesn't make any sense. In the past, such businesses wouldn't even exist. They would've died by their third or fourth year.

Same with Uber, and I think a few other companies (like MoviePass) we've seen recently that basically live off investors' money, price competition out of the market with that money (price dumping, potentially), and then get to have a monopoly on the market.

How is any of that "desirable" to have in a market, and something we should strive to enable? And if investors can afford to lose billions of dollars a year in an effort to obtain monopoly power, maybe paying an extra 3% isn't so bad.

And before we cry about these multi-billion dollar companies having to be forced to pay 3% tax on revenue, remember that in some countries in Europe even brand-new startups have to pay 3% revenue tax, and it's actually not so bad. It's obviously not ideal from a startup perspective, but it's not a complete show-stopper either. If it's not the end of the world for startups, then I don't think it is for companies worth tens of billions of dollars either. If it is, then maybe they're doing something wrong.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#186

Post by lg »

alsetmusic wrote: post #33
foobarian wrote: post #28

Earlier quoted context omitted.

But how does that work with a company like say Google? What prices are there to raise? It's more like they happened upon an incredible natural resource (the users' eyeballs connected to an unregulated digital network newly built by government funds) and are charging whatever price the market will bear. The tax is just a forced extraction of some of that margin, and I'm not sure how they can compensate for that. If an…

> If anything, if they really are a monopoly and increasing prices could have got them more revenue presumably they would have done it already. A company cannot arbitrarily raise prices in isolation without risk of alienating customers. The difference here would be that both Google and its competitors would be subject to the same price hike.

actually that's not the case here, google and its competitors will only be subject to the same price hike if its competitors cross a certain gross revenue threshold, so biasing the market in favor of smaller players.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#187

Post by shady-lady »

throwaway77384 wrote: post #157

This is fantastic and I am all for it. Even if this gets passed on to the customer, it ends up in infrastructure and the kind of things the EU does well. I'd love to see more of this. If the international conglomerates had wanted to avoid this, maybe they wouldn't have dodged taxes like they did in the first place. Brilliant and long overdue. My main worry is that countries which capitalise on enabling the tax dodger…

What was the point of the European Single Market then?

Or was that just meant to benefit the larger industrial nations(cough, Germany, cough)?

It would seem to be sour grapes on the parts of France & Germany that they weren't chosen to the main entrypoint to the EU for some US companies.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#188

Post by esarbe »

adventured wrote: post #172
gaius wrote: post #158

Google et al: (smugly) we comply strictly with the letter of the law, if you want us to pay more change the law Government: hold my beer Google: it’s not fair!!! (fx: bitter tears) Let’s charge them the back taxes for all their evading years too

Avoidance is not evasion, so your back tax / theft premise will fall apart there. It would never survive a legal challenge. This EU fake tax is actually a new tariff. The EU has a $100 billion net trade surplus with the US. Germany - by far the largest economy in the EU - in particular has an extreme trade imbalance with the US in relation to the size of the trade between the two countries. The German trade deficit i…

It's pretty much obvious that the tax avoidance perpetuated by Google, Apple, Amazon and Microsoft is against the spirit of the (tax) law, even if it is not against the letter. But you are right; it would never stand a legal challenge. That's why there is this new tax.

When you consider that companies like Apple, Amazon and Google - using these tax loopholes and sandwiches - get to pay a much lower tax rates that your local carpenter or grocery store, I don't see this as a new tariff, but as enforcement of an existing one.

About the 'trade fights'; I think you really do underestimate the straits the U.S. is currently in. The only reason the U.S. can import as much as it is currently doing is because of the strength of the U.S. Dollar. The median inflation adjusted income in the U.S. has been sinking for three decades. Even more automated production will not produce purchase power, especially if the value of the Dollar suffers because of a trade conflict.

Interested to hear your thoughts!

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#189

Post by pimmen »

tonfa wrote: post #175
pimmen wrote: post #128

Earlier quoted context omitted.

Country D, I think. That's where the sale was made.

Are you talking about sales tax, or corporate taxes? Out of curiosity, what makes you think it should be D, assuming you were talking about corporate tax? With a much simpler example, if a merchant in e.g. France sells a product to a consumer in e.g. USA, the VAT/import/sales tax should go to the US but the corporate tax on profit for the merchant is taxed in France.

Sales tax, depending on the structure of the company. If a company has a solid presence in the country where the sale was made, with physical sales and marketing departments, who make the sale it will be taxed there.

This is the case for Facebook and Google in the EU.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#190

Post by andosa »

bobcostas55 wrote: post #183
barry-cotter wrote: post #162

Earlier quoted context omitted.

If other people do stupid things you don’t have to do stupid things too. Market distortions, different tax rates and regulations do not change how returns to specialisation and gains from trade work. Anti-dumping tariffs are stupid because it not notnto your benefit to punish people for giving you cheap stuff that should be expensive. Being able to have different tax rates is part of the power to tax, which is part o…

> But once you lost that capability it may become prohibitively expensive to regain it because the initial costs to rebuild the knowledge and infrastructure is going to be much higher than the marginal costs for an established industry and you would have to accept, at least to some extend, which ever price they ask for. This has literally never happened. People keep bringing up this objection, but nobody can point to…

How has it not ever happened? China, who essentially blocked Google, Amazon et al, now have Baidu, Alibaba, Tencent and other massively successful tech companies, while EU is stuck with aforementioned monopolies with near-zero chance of a local competitor competing with them.
Post reply on HN