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

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

#241

Post by seneca » Mon, Apr 20, 2020, 5:41 PM UTC

lotsofpulp wrote: post #230

rpiguy wrote: post #219

Earlier quoted context omitted.

There are 30.2 million small businesses in the US, which comprise a whopping 99.9% of all United States businesses and make up for the lion's share of employment. This is very different from Europe. By bailing out the small business owners, you have a better chance at maintaining employment or for employment to re-emerge after a crisis. Small business ownership is also a huge source of middle class wealth here in the…

> By bailing out the small business owners, you have a better chance at maintaining employment or for employment to re-emerge after a crisis. Why is the goal to maintain employment? Seems like the government wants to keep people on their little hamster wheels.

> Why is the goal to maintain employment? Seems like the government wants to keep people on their little hamster wheels.

Well, common sense seems to suggest that we would want to have an operational economy again at some point. That generally requires there to be jobs available to people.

What is the alternative to "their little hamster wheels", exactly?

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

#242

Post by ed312 » Mon, Apr 20, 2020, 5:41 PM UTC

bigfudge wrote: post #137

ethelward wrote: post #42

Earlier quoted context omitted.

There is a middle ground between having enough cash reserves to survive for months, and not having cash at all because everything has been bled out in dividends and buybacks; namely, having enough cash reserves to survive for some time, but not for several months.

Why not for several months. If you are a large corporate doing share buybacks why the f shouldn't you be able to weather several months of disruption?

Because your competitor who ploughs all their money into growth and rewarding shareholders would crush you within a year. Everyone loves to watch their 401k go up every quarter but hates the reality of how that happens. Sort of like people who love cooking meat but are disgusted by an image of a slaughterhouse.

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

#243

Post by kortilla » Mon, Apr 20, 2020, 5:41 PM UTC

flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

> Why should tax payers bail out a tax avoiding company?

Because every company optimizes its tax burden. “Tax Avoidance” is an arbitrary political clap trap to drum up outrage.

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

#244

Post by dang » Mon, Apr 20, 2020, 5:43 PM UTC

This submission broke HN's rules by editorializing the title. Doing that eventually causes your account to lose submission privileges on HN, so please don't do that.

"Please use the original title, unless it is misleading or linkbait; don't editorialize."

https://news.ycombinator.com/newsguidelines.html

Cherry-picking a detail from an article and making that the title is editorializing—in fact it's the leading form of editorializing. Titles are by far the biggest influence on threads, so this is a big deal. On HN, being the first to submit an article doesn't confer any special rights to frame it for everybody else.

If you want to say what you think is important about an article, please do so in a comment. Then your view is on a level playing field with everyone else's. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

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

#245

Post by tick_tock_tick » Mon, Apr 20, 2020, 5:43 PM UTC

AnthonyMouse wrote: post #109

Saaster wrote: post #27

It's a good common sense start. 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. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…

The notion that we should be encouraging corporations to hoard money is crazy. We have enough problems with them doing that as it is, because executives already have a perverse incentive to retain earnings for pet projects and wasteful empire building, and there are a bunch of dumb tax rules that already allow taxes to be avoided as long as the money isn't repatriated and paid out to shareholders, which makes the sha…

It was such a problem in the past we added laws around it https://www.investopedia.com/terms/a/accumulatedearningstax....

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

#246

Post by ed312 » Mon, Apr 20, 2020, 5:43 PM UTC

toomuchtodo wrote: post #123

0xffff2 wrote: post #105

Earlier quoted context omitted.

Why? Where exactly is the tipping point where dividends/buybacks become unacceptable? Unless you want to completely outlaw dividends and share buybacks (in which case you might as well do away with public companies), you're inherently putting the government in the position of defining completely arbitrary rules about how profitable a company is allowed to be.

Yes, that is the role of government, deciding who does and does not get a bailout based on criteria developed by policy makers, using taxpayer funds. Bailouts are not entitlements.

A key point missing is defining that criteria in advance. If your market economy rewards buybacks heavily and you didn't know it was a moral hazard, why should your company (and its employees & shareholders) suffer? I can see banning future buybacks until the gov't loan is repaid though.

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

#247

Post by gbear605 » Mon, Apr 20, 2020, 5:43 PM UTC

thrill wrote: post #224

BeetleB wrote: post #206

Earlier quoted context omitted.

I think you'll find a lot of people do not agree with your definition of "penalized". Not giving something to someone who was never entitled to it is not penalizing. > So, companies acting completely legally by seeking to minimize their tax burden, which serves to further maximize the money available for their owners, get penalized It's fairly simple. If you don't want to pay the government, the government doesn't wa…

IF someone is offered an advantage not offered to me then I have been penalized.

The rules:

1. You can incorporate in a tax-advantaged state ("tax haven") and not get benefits ("bail outs")

2. You can incorporate in a non-tax-advantaged state (eg. Denkmark) and get benefits ("bail outs")

Your company has chosen option 1 but you are claiming that your company is being penalized because you can't get the benefits of both options.

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

#248

Post by akamaozu » Mon, Apr 20, 2020, 5:44 PM UTC

thrill wrote: post #224

BeetleB wrote: post #206

Earlier quoted context omitted.

I think you'll find a lot of people do not agree with your definition of "penalized". Not giving something to someone who was never entitled to it is not penalizing. > So, companies acting completely legally by seeking to minimize their tax burden, which serves to further maximize the money available for their owners, get penalized It's fairly simple. If you don't want to pay the government, the government doesn't wa…

IF someone is offered an advantage not offered to me then I have been penalized.

Do you feel penalized every time you can't park in a convenient parking spot because it's reserved for people with mobility issues?

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

#249

Post by kortilla » Mon, Apr 20, 2020, 5:44 PM UTC

lotsofpulp wrote: post #230

rpiguy wrote: post #219

Earlier quoted context omitted.

There are 30.2 million small businesses in the US, which comprise a whopping 99.9% of all United States businesses and make up for the lion's share of employment. This is very different from Europe. By bailing out the small business owners, you have a better chance at maintaining employment or for employment to re-emerge after a crisis. Small business ownership is also a huge source of middle class wealth here in the…

> By bailing out the small business owners, you have a better chance at maintaining employment or for employment to re-emerge after a crisis. Why is the goal to maintain employment? Seems like the government wants to keep people on their little hamster wheels.

Those “hamster wheels” are the reason we get to eat, have internet, have shelter with heat/AC. It’s gonna get pretty miserable if we just pay everyone to stay home and do nothing.

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

#250

Post by cies » Mon, Apr 20, 2020, 5:45 PM UTC

malandrew wrote: post #220

arcticbull wrote: post #162

Earlier quoted context omitted.

> "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…

> In many European countries, social safety nets exist They only exist because they are funded by taxing economic activity. If governments could just will them into being without restriction than every country in the world could have European level social safety nets. If economic activity declines, so does the money faucet funding the social safety nets.

On the long run yes, on the sort run they could do some money printing to fill the hole. (which is what we're seeing now)