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

Denmark: No aid for companies which pay out dividends or are reg. in tax havens

bloomberg.com

Post reply on HN
Print view View original

191–200 of 308 posts

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#191

Post by arcticbull »

arcticbull wrote: post #162
oconnor663 wrote: post #133

Earlier quoted context omitted.

> Why should tax payers bail out a tax avoiding company? I think that depends on our answer to the prior question, "Why should tax payers bail out any company?" If the answer is "because we like them and we feel a patriotic/moral/righteous duty to help them", then the distinction between tax-paying and tax-avoiding companies does seem relevant. But if the answer is "to help workers keep their jobs", then the distinct…

> "because we like them and we feel a patriotic/moral/righteous duty to help them" Sounds like an abusive relationship. Again, if a company wants to be bailed out by the tax payer, I don't think it's a stretch to ask that they pay taxes . Otherwise it's like me, a foreigner with no connection to Denmark other than that I've 'helped the economy' when I went on vacation there last year asking for a bailout. > But if th…

Just replying to myself, I was incredulous that cruise lines were requesting a bailout from the US taxpayer. They've been registering their ships in Panama, the BVI and Liberia to avoid minimum wage law, labor laws and paying taxes. They make staff work 8-20 hours a day 7 days a week for months on end, paying well below market wages. [1]

Need a bailout? Ask the Liberians.

Similarly, these companies should be asking for bailouts from the tax havens in which they are registered. Surely all those "registration fees" they've been paying to avoid taxes are being kept safely for just such an occasion.

None of this is making me feel super patriotic/moral/righteous duty for them.

[1] https://www.businessinsider.com/cruise-line-workers-reveal-g...

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#192

Post by pinkfoot »

gruez wrote: post #186
bigfudge wrote: post #136

Earlier quoted context omitted.

Perhaps this should be a cost of doing business in the future? We all pay for this anyway, so why should taxpayers face all the risk and none of the reward.

>so why should taxpayers face all the risk and none of the reward. Simple, bail the companies out (thus saving all the jobs), but wipe out (or significantly dilute) existing shareholders.

The problem then comes (regrettably) when national/regional/local government next tries to get another round of capital-intensive fixed investment form the captains of industry.

They find themselves talking to themselves for the money.

They hate that.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#193

Post by apazzolini »

ericmason wrote: post #81
yalogin wrote: post #69

I keep saying over and over but the economic policy is something trump fucked up big time. He gave away the corporate tax breaks in times of prosperity when there was no need and the companies just made bank. He was dealt a great hand, a strong economy that would chug along no matter who the president was. Those are the times to focus on the poor and lift people up. Instead he wasted his opportunity on the tax cuts.…

Trump cut taxes on corporate profits. That only helps when there are actually profits, so it would not do much right now.

Right - it helped out a year ago when those companies used their profits to buy back stocks, giving executives piles of money, while leaving the companies broke and in need of a bailout.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#194

Post by oconnor663 »

sanderjd wrote: post #150
oconnor663 wrote: post #133

Earlier quoted context omitted.

> Why should tax payers bail out a tax avoiding company? I think that depends on our answer to the prior question, "Why should tax payers bail out any company?" If the answer is "because we like them and we feel a patriotic/moral/righteous duty to help them", then the distinction between tax-paying and tax-avoiding companies does seem relevant. But if the answer is "to help workers keep their jobs", then the distinct…

What if the answer is "to strike a balance between many workers being able to keep their jobs and disincentivizing tax-avoidance"?

That could be the real answer, for sure. Or the aggregate answer, maybe, in the sense of "we need to do X, but can't do too much of Y, because then voters will notice and get angry." In that case, it might not be a deliberate choice at all, just the reality of politics in a democracy.

If it was a deliberate choice, my instinct would be that designing one policy with a dual mandate sounds a lot more complicated and less effective than designing two policies. It's a lot simpler to target a bailout to saving jobs only, say, and then separately change the tax code to disincentivize tax havens. That would also separate the part that needs to be done urgently, from the part we could do whenever.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#195

Post by deeth_starr_v »

ericmason wrote: post #81
yalogin wrote: post #69

I keep saying over and over but the economic policy is something trump fucked up big time. He gave away the corporate tax breaks in times of prosperity when there was no need and the companies just made bank. He was dealt a great hand, a strong economy that would chug along no matter who the president was. Those are the times to focus on the poor and lift people up. Instead he wasted his opportunity on the tax cuts.…

Trump cut taxes on corporate profits. That only helps when there are actually profits, so it would not do much right now.

The point you're missing is that the tax cuts were unfunded and paid for by huge deficits. So that huge overhang will limit how much deficit spending politicians might undertake to offset any downturn. And they may need to raise corp taxes now and create even more drag.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#196

Post by oconnor663 »

klyrs wrote: post #174
kleiba wrote: post #157

Earlier quoted context omitted.

There is some truth to that line of thought. Either it is legal to avoid taxes, then no distinction should be made. Or it is illegal, in which they should be persecuted. But making this distinction as a means to "punish" certain companies seems to conflate two unrelated issues.

Bailouts are a reward. Not getting a reward is not a punishment. If you buy a lottery ticket and win, your neighbor was not punished for not buying a ticket.

The point I'm trying to drive at is that bailouts are not a reward. If they were a reward, we wouldn't wait until emergencies to issue them. Rather, they're an emergency response, and in that sense they should really be optimized for effectively addressing the emergency, regardless of what feels fair.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#197

Post by 1123581321 »

calcifer wrote: post #165
chrisseaton wrote: post #112

Earlier quoted context omitted.

> lining investor pockets Investors are often normal people like you and me, using dividends and the sale of shares to put food on their families' tables.

I've never once met a person who would otherwise go hungry if they didn't get dividends, have you? What you really mean is those "normal people" would have to sell their third car or maybe rent out their summer home without that dividend, which is just fine by me.

I know a bunch of retirees who live modestly off of dividend income, couldn’t afford a significant cut and couldn’t easily return to work. I don’t think you have broad enough experience to assume no one earns a few thousand a month from dividends and needs most of it to help pay bills.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#198

Post by NovemberWhiskey »

Saaster wrote: post #179
NovemberWhiskey wrote: post #127

Earlier quoted context omitted.

> Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. You present that as a statement of fact; but it's not at all clear to me why that should be true. Can you give your thinking on that? A company may not be paying a dividend because it's reinvesting; or because it's unable to do so because it's making a loss. Do you t…

Companies that intentionally run with razor-thin balance sheets and don't have any buffers built in to withstand shocks, are more fragile than companies with some buffer, all other things being equal. If the company chooses to pay out said buffer as dividends, it's to the benefit of shareholders. That's completely fine, market working as intended! But they shouldn't then be able to turn around and get state aid becau…

> Companies that intentionally run with razor-thin balance sheets and don't have any buffers built in to withstands shocks, are more fragile than companies with some buffer, all other things being equal.

That's true; but it's not at all the statement you made originally, is it? Do you actually have some data that suggests that dividend-paying companies are more likely to be run as you described?

Contrary example: AAPL in its Q1 2020 filing reported ~$200bn of cash, equivalents and marketable securities on hand. AAPL also pays a dividend.

Moreover: it's absolutely not to the benefit of shareholders to have a company fail just in order to pay a dividend (unless the dividend yield is something ridiculous); shareholders are often interested in a combination of growth and yield, and the value of the stock going to zero as the company fails is a bad outcome.

In fact, companies that pay a dividend by definition have a buffer. They can chose not to pay a dividend.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#199

Post by wool_gather »

dev_tty01 wrote: post #190
barkingcat wrote: post #182

Earlier quoted context omitted.

If you think at all about why a company was registered in a tax haven to begin with, then it's clear that they shouldn't even be in a line to get bailouts from "foreign entities" (from the point of view of the company) at all. If a company wants to be eligible for benefits inside a country, they have to follow all the laws. No ifs, buts, ands. If you feel that the company is "doing good work" why not ask them to be r…

>>If a company wants to be eligible for benefits inside a country, they have to follow all the laws. Minimizing tax liability is not necessarily doing anything outside the law.

I don't think that's quite what parent meant. There's a difference between

"Does not break any rules"

and

"Follows all the rules"

Where the gap is in whether the entity is subject to the rules. You are correct that one that isn't subject to the rules is right to not follow them.

But, where the outcome of those rules incurs some benefit, why should the non-subject incur it?

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#200

Post by Certhas »

komali2 wrote: post #155
oconnor663 wrote: post #133

Earlier quoted context omitted.

> Why should tax payers bail out a tax avoiding company? I think that depends on our answer to the prior question, "Why should tax payers bail out any company?" If the answer is "because we like them and we feel a patriotic/moral/righteous duty to help them", then the distinction between tax-paying and tax-avoiding companies does seem relevant. But if the answer is "to help workers keep their jobs", then the distinct…

The government has unilateral ability to invent jobs and even invent money if the goal is to help workers keep their jobs and/or remain fed and housed. So I feel that no company should get a bailout. If they fail, they fail, and the government can scoop up the workers and create an agency or just government-staked company that does the same thing, find some work in the country that needs doing and put the workers on…

For historic reasons states have built systems that prevent normal governments from inventing money at scale: Independent Central Banks. It's of course an important ongoing debate in economics whether this is still appropriate, but it's unrealistic to expect governments to so dramatically alter the fundamental structure of monetary policy. That said, of course it's even more unrealistic to expect them to do so absent a massive external shock.
Post reply on HN