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France has approved a digital services tax despite threats of retaliation by US

bbc.com

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Re: France has approved a digital services tax despite threats of retaliation by US

#241

Post by jwr »

ripdog wrote: post #28
bko wrote: post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

Those large tech companies can make money in France because the french government provides all that is necessary for a free, fair and functioning market. How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? All money made on the white market in any country is facilitated by that government, and taxes are paid on all profits…

> Those large tech companies can make money in France because the french government provides all that is necessary for a free, fair and functioning market. How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement?

Also, those large tech companies can sell to French customers because French customers have money to buy from them. And the reason they have that money is largely due to the country/society/legal system/welfare/medical/etc. This is a "access to market" tax and it makes perfect sense.

Re: France has approved a digital services tax despite threats of retaliation by US

#242

Post by pyrale »

dcolkitt wrote: post #44
bko wrote: post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

> The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. Economists have known for 100 years that land value taxes (LVT) are by far the most efficient way to raise taxes. After that consumption taxes are the next most efficient. Corporate taxes and taxes on…

LVT and VAT are considered effective because they're hard to dodge and easy to collect.

They pose major problems in terms of tax fairness though. The reason for this is that VAT efects the poorer disproportionately (poor people spends almost 100% of their income, while richer people won't spend a larger fraction of their revenue) while LVT targets the middle class (AKA those that don't have enough capital to diversify their assets and invest beyond their home).

Re: France has approved a digital services tax despite threats of retaliation by US

#243

Post by hazza1 »

bko wrote: post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

Pretending you're based in Switzerland or some other tax haven to avoid local sales tax gives you a massive advantage over national companies.

Re: France has approved a digital services tax despite threats of retaliation by US

#244

Post by JAlexoid »

tzs wrote: post #63
Vinnl wrote: post #19

Earlier quoted context omitted.

> What public resources did Amazon, a US company, use from France? Digital infrastructure, anti-poverty programs that mean potential customers still have something to spend, financial infrastructure, legislation, ...

Shouldn't that be covered by the 20% VAT that Amazon pays on goods and services sold to entities in France?

It should. And if it were just that, then we'd not have this conversation at all. This is a very specific law targeting specific economic activity.

When it comes to B2B VAT is inconsequential for Amazon. Amazon is only affected by VAT when Amazon is the seller of a physical product to a consumer. Otherwise there's literally no impact on Amazon.

Re: France has approved a digital services tax despite threats of retaliation by US

#245

Post by JAlexoid »

cstejerean wrote: post #139
Renaud wrote: post #93

Earlier quoted context omitted.

No. VAT is basically a tax paid by people. Companies don’t really pay VAT, they collect it from the end-customers and pass it to the state. Relying on VAT alone skews the burden of financing the state on the people only, which means no participation from the companies that make money without directly contributing to the country’s expenses they benefit from. It also disproportionately disadvantages companies that also…

And you think this new surcharge won’t be passed onto the consumers in France?

It will, but it'll not be above what the market is willing to bear. Right now digital services are charged at the level that a market can bear, but only digital services are the ones that don't get taxed.

To make stuff fair - you'd have to cut all other taxes or institute this one.

(I'd prefer no taxes, but that's never going to happen)

Re: France has approved a digital services tax despite threats of retaliation by US

#246

Post by ripdog »

vixen99 wrote: post #209
ripdog wrote: post #28

Earlier quoted context omitted.

Those large tech companies can make money in France because the french government provides all that is necessary for a free, fair and functioning market. How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? All money made on the white market in any country is facilitated by that government, and taxes are paid on all profits…

What about the money the French make by using Google services? Desktop search traffic originating from Google is 90% - presumably for a good reason. https://www.statista.com/statistics/220534/googles-share-of-...

The market already rewards Google for their services by the absurd amount of money they make. The government is generally not in the business of rewarding businesses for their services.

Re: France has approved a digital services tax despite threats of retaliation by US

#247

Post by vorpalhex »

praptak wrote: post #181
bko wrote: post #102

Earlier quoted context omitted.

> All money made on the white market in any country is facilitated by that government, and taxes are paid on all profits to pay for the services which allowed the profit to be made. So any taxation is justified? > It's not arbitrary to expect businesses to pay for services they benefit from. Any digital company with revenue of more than €750m ($850m; £670m) - of which at least €25m is generated in France - would be s…

> So any taxation is justified? A corp will raise prices to whatever level the market will bear. Why shouldn't a society do the same with taxes?

Because it's short sighted to over tax your citizens from both sides?

Re: France has approved a digital services tax despite threats of retaliation by US

#248

Post by beowulfey »

bko wrote: post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

You don't understand it because it is strictly a philosophical difference of yours. You operate in the paradigm of taxation == fees or penalties imposed on people and corporations by the goverment. It is seen as strictly a negative thing. The opposite idea is that taxation is an /investment/ by corporations and individuals, directed and designed by the government, to allow society to keep running smoothly. You may not always see the effects as they often are indirect, but they are important.

The difficulty for most Americans is seeing taxation as a long term benefit rather than as a penalty, as no one is able to look past the fact that they feel forced into paying them.

Re: France has approved a digital services tax despite threats of retaliation by US

#249

Post by bmelton »

vorpalhex wrote: post #247
praptak wrote: post #181

Earlier quoted context omitted.

> So any taxation is justified? A corp will raise prices to whatever level the market will bear. Why shouldn't a society do the same with taxes?

Because it's short sighted to over tax your citizens from both sides?

To this extent, countries compete on taxation and value-add for services. Perhaps country A charges more in taxes, but offers more education to its people, and a more educated workforce to hire from, while country B offers fewer of those amenities in exchange for lower taxes.

Inter-country competition helps to keep them honest, and corporations get to choose the luxury of where they operate from and do business out of.

Re: France has approved a digital services tax despite threats of retaliation by US

#250

Post by Vinnl »

liber8 wrote: post #138
Renaud wrote: post #93

Earlier quoted context omitted.

No. VAT is basically a tax paid by people. Companies don’t really pay VAT, they collect it from the end-customers and pass it to the state. Relying on VAT alone skews the burden of financing the state on the people only, which means no participation from the companies that make money without directly contributing to the country’s expenses they benefit from. It also disproportionately disadvantages companies that also…

...Who do you think ultimately owns these companies? Something besides people?

Those are not the people that pay VAT, especially not if they're not located in the country that charges the VAT.
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