G7: Rich nations back deal to tax multinationals • Hacker News Board

Re: G7: Rich nations back deal to tax multinationals

#251

Post by kapuasuite » Sat, Jun 05, 2021, 2:35 PM UTC

StopHammoTime wrote: post #201

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

Here’s an idea, let’s charge tax on revenue and it can just be the cost of doing business. Small businesses get a tax holiday for the first few years. Problem solved.

Why tax a corporation's income at all when you can tax its shareholders income instead?

Re: G7: Rich nations back deal to tax multinationals

#252

Post by EMM_386 » Sat, Jun 05, 2021, 2:37 PM UTC

This is absolutely necessary.

Think about this Microsoft Irish subsidiary that "made" $200 billion with ZERO EMPLOYEES.

Not even a single person to go buy a sandwich at lunch and "help the local economy".

Nobody.

The only beneficiary is Microsoft because nobody gets any tax revenue. And Microsoft can just hoard cash, it's not like they are going to rain it down to everyone's paycheck.

This is a global problem, it requires a global solution. As much as that answer is anathema to some, it seems necessary here.

Re: G7: Rich nations back deal to tax multinationals

#253

Post by IanCal » Sat, Jun 05, 2021, 2:38 PM UTC

mrgordon wrote: post #214

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

You’re ignoring that the companies can just keep lots of cash without distributing it to individuals in order to avoid taxation under your system. So for example the company can rent houses, cars, and airplanes for every employee to ensure there is not much money left to be taxed as income. On paper they look like corporate expenses but it’s really just a way to distribute money without it being taxable.

> You’re ignoring that the companies can just keep lots of cash without distributing it to individuals

Nobody benefits from a company growing indefinite wealth without distributing it to actual people.

> So for example the company can rent houses, cars, and airplanes for every employee

If they could do this, all companies would do this already to avoid taxes. In reality, this is dealt with by (in the UK) considering those things "benefits in kind" aka equivalent to cash.

Re: G7: Rich nations back deal to tax multinationals

#254

Post by runarberg » Sat, Jun 05, 2021, 2:38 PM UTC

toyg wrote: post #235

runarberg wrote: post #177

Earlier quoted context omitted.

If the tax havens are democratic (and most are) then government boycotts + divestment + sanctions could go a long way. Imagine being a panama citizen, your government is hellbent on protecting foreign billionaires from paying taxes in their home country. Now the Panama Canal is seeing only 50% of the traffic with resulting job-loss, the national team is no longer allowed to play in Copa America, and your countrymen h…

Panama is probably the one country that could hold it out - retaliation on the Canal would escalate matters to a point where rich countries have to choose between a dangerous military occupation or sitting at the table with the local government. But yes, isolation of countries like Bermuda and Cayman Islands could achieve a lot very quickly. To be brutally honest, the UK government could shut down most of them tomorr…

I wonder how essential the Panama canal actually is. If the Panamanian government decided to play rough and use it as a threat, there are several alternatives for global shipping. Some could use the Suez canal instead with only a minor increase in shipping time. Others could use rail, and the worst affected could still go through the Magellan straight.

Re: G7: Rich nations back deal to tax multinationals

#255

Post by rjknight » Sat, Jun 05, 2021, 2:39 PM UTC

swiley wrote: post #174

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

9. Just kept in a large pile like Apple does.

This is really a case of 8. I doubt that Apple has an account full of US dollars, and I mentioned that low yields on safe investments is already a way of “taxing” this money in order to encourage spending or riskier investment.

Re: G7: Rich nations back deal to tax multinationals

#256

Post by jlokier » Sat, Jun 05, 2021, 2:39 PM UTC

rjknight wrote: post #145

H12 wrote: post #136

Earlier quoted context omitted.

Thank you for your reply. In hindsight it makes a ton of sense that this would only apply to companies with a physical presence in multiple countries. Tracking country of origin for every online purchase and grouping them in order to pay international taxes would be an absolutely ludicrous requirement. No matter how low your opinion of the G7 is, they're not that dumb.

The European Union did introduce a system similar to this for VAT, where the rate paid depends on the country of the buyer, not the seller: https://europa.eu/youreurope/business/taxation/vat/cross-bor... It might be a bad idea but it's not beyond the realms of possibility.

However, within the EU they also have a nice (or at least automatable) online system where small businesses can process inter-country VAT sales declarations through their own country's tax system. It's not particularly onerous for small businesses to sell across borders to other countries within the EU.

Re: G7: Rich nations back deal to tax multinationals

#257

Post by ncallaway » Sat, Jun 05, 2021, 2:40 PM UTC

acomjean wrote: post #238

BurningFrog wrote: post #215

Earlier quoted context omitted.

This a typical economist analysis, and I think it's mostly right. But I don't think those making these decisions think in such terms at all. People love to tax companies, because they think it's "someone else" paying those taxes. Maybe there is also some anthropomorphising going on where you think of the company as another person who is much wealthier than you.

In the US at least companies have many rights like they’re people. https://en.m.wikipedia.org/wiki/Corporate_personhood#Case_la...

To the point that we call the bundle of rights corporations get “corporate personhood”. (https://en.m.wikipedia.org/wiki/Corporate_personhood)

Frankly, if OP doesn’t want me to anthropomorphize corporations for tax purposes, they’ll need to go back in time and stop the courts from anthropomorphizing them for various rights.

If a company gets 1A rights under citizens united, then it can have tax obligations as well.

I’m pretty over this double standard where companies are handed various rights, but not commensurate obligations.

Re: G7: Rich nations back deal to tax multinationals

#258

Post by kapuasuite » Sat, Jun 05, 2021, 2:40 PM UTC

raverbashing wrote: post #232

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

Ending corporate tax would be an interesting proposition and it would be interesting to study the possible effects of that However I think the main downside on the abolition of corporate tax is that companies are hiring even fewer people with time (automation, subcontracting, etc) so the taxation "opportunities" are reduced if you only have "payroll"/income taxes and sales taxes. The current situation leads to things…

The government could tax shareholders, i.e. the people who receive a corporations profits to begin with.

Re: G7: Rich nations back deal to tax multinationals

#259

Post by SMAAART » Sat, Jun 05, 2021, 2:42 PM UTC

mrgordon wrote: post #214

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

You’re ignoring that the companies can just keep lots of cash without distributing it to individuals in order to avoid taxation under your system. So for example the company can rent houses, cars, and airplanes for every employee to ensure there is not much money left to be taxed as income. On paper they look like corporate expenses but it’s really just a way to distribute money without it being taxable.

> So for example the company can rent houses, cars, and airplanes for every employee ...

there's already laws in the books today that those are taxable as in-kind compensation

Re: G7: Rich nations back deal to tax multinationals

#260

Post by heliodor » Sat, Jun 05, 2021, 2:43 PM UTC

runarberg wrote: post #198

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

I’m of the opinion that there should only be income tax (paid as a function of standard deviations from from the mean wage on the logistical curve). And all personal profits should be considered income, including sold shares, paid dividends, earned interest, etc. However I can see how that system would be abused. E.g. instead of buying that yacht from your personal money (which you need to pay 70% tax on when you tra…

How about the self-sustaining farmer who doesn't need to work in society? Completely capable individual, has a certain way of life, and suddenly they don't need to contribute?

How about the person who has so much wealth that they will never need to work in their life?

Government is labor that benefits the people. The only way an individual can escape the duty is if they are incapable or if society deems that they deserve a break.

Taxing only income misses the mark by a bunch.