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France Plans 5% Digital Tax as Governments Chase Internet Giants

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Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#291

Post by amanaplanacanal »

adventured wrote: post #211
thoughtstheseus wrote: post #165

Earlier quoted context omitted.

A VAT tax makes a lot of sense. It would reduce the incentive for large market quasi-monopoly seeking companies to optimize for no profits to avoid taxes. The current dynamic is- why pay taxes when you can spend it to expand your market share?

VAT taxes are extraordinarily regressive. Next to lowering taxes on the rich, it's among the worst possible options. Increasing the income tax and taxing capital gains at regular income rates, along with bolstering estate taxes on the rich, are the ideal near-term solutions to the US budget problem. The US still has a lot of slack taxing capacity on the wealthy. That should be maxed out long before we look at a VAT.

Regressive taxes can be fine, as long as you balance them with transfer payments so that the poor don't end up paying more.

They might even make the economy more efficient. I'll leave that argument to the economists, though.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#292

Post by magduf »

amanaplanacanal wrote: post #291
adventured wrote: post #211

Earlier quoted context omitted.

VAT taxes are extraordinarily regressive. Next to lowering taxes on the rich, it's among the worst possible options. Increasing the income tax and taxing capital gains at regular income rates, along with bolstering estate taxes on the rich, are the ideal near-term solutions to the US budget problem. The US still has a lot of slack taxing capacity on the wealthy. That should be maxed out long before we look at a VAT.

Regressive taxes can be fine, as long as you balance them with transfer payments so that the poor don't end up paying more. They might even make the economy more efficient. I'll leave that argument to the economists, though.

I think you also need to have tax breaks on certain things, for instance groceries and non-luxury clothing. Many high-tax, high-CoL states here in the US are like this, so that poorer people don't pay so much for essentials.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#293

Post by magduf »

ttoinou wrote: post #191
tonyedgecombe wrote: post #160

Earlier quoted context omitted.

The trouble with that is it will penalise low margin businesses, Apple could easily afford it on their 30% margin but a budget PC maker with a 3% margin would struggle.

Small businesses are already penalized by our current laws and ways of taxing profits. I believe the alternative I am proposing (that will never come to reality) is easier for everyone

Sure, it's easier, but it also means you'll just have a bunch of giant vertically-integrated monopolies. Easier, sure, but I don't see how that's better.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#294

Post by magduf »

fauigerzigerk wrote: post #140
cpursley wrote: post #60

Earlier quoted context omitted.

Banning tax evasion is easy. Just get rid of corporate income taxes and replace it with a sales tax. It's not like corporations pay taxes anyways; their customers do as tax is built into the cost of products.

I see a couple of issues with this solution: 1) Companies would not pay most of their taxes where they put the greatest strain in public infrastructure. 2) Moderate differences in VAT rates would create enormous price differnces, which would invite smuggling. 3) The incentive for rich people to move to low tax destinations would be even greater than it already is. I won't deny that the solution has upsides as well th…

>3) The incentive for rich people to move to low tax destinations would be even greater than it already is.

I don't know why people keep harping on this, it simply isn't true at all. If it were, all the rich people would be living in Somalia right now, and they aren't, they're living in high-tax, high-CoL areas.

Very few rich people live in a way that allows them to live anywhere on the planet. Most "rich" people in the US are still working, and have to live someplace that allows them to continue to work. Some millionaire running a business in Silicon Valley can't just relocate to rural Alabama and expect to continue that.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#295

Post by yostrovs »

magduf wrote: post #294
fauigerzigerk wrote: post #140

Earlier quoted context omitted.

I see a couple of issues with this solution: 1) Companies would not pay most of their taxes where they put the greatest strain in public infrastructure. 2) Moderate differences in VAT rates would create enormous price differnces, which would invite smuggling. 3) The incentive for rich people to move to low tax destinations would be even greater than it already is. I won't deny that the solution has upsides as well th…

>3) The incentive for rich people to move to low tax destinations would be even greater than it already is. I don't know why people keep harping on this, it simply isn't true at all. If it were, all the rich people would be living in Somalia right now, and they aren't, they're living in high-tax, high-CoL areas. Very few rich people live in a way that allows them to live anywhere on the planet. Most "rich" people in…

You're conflating all sorts of rich people into a single type and then use that as the universal example. Warren Buffet lives in Nebraska and operates his conglomerate just fine from there. This he was doing before the internet age, something that now allows for even greater freedom of moving and operating from distant places.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#296

Post by xondono »

dawnerd wrote: post #163
xondono wrote: post #48

Earlier quoted context omitted.

You are assuming that somehow that tax revenue is theirs in the first place. What if that tax rate makes a business non-profitable in France but a money-making machine in Ireland? Also, too much focus is centered around taxes when spurious regulations are generally more damning for a lot of companies. For example some friends of mine have attempted to start escape rooms, they have all abandoned their pursuits because…

Escape rooms and haunted houses are a nightmare in local fire code in the states as well. Ends up putting a lot of smaller productions out of business.

If it were that, I’d understand. The main issue my friends had was with declaring their “official activity”. In spain you need to declare what activity your bussiness is into, and the categories available are so restrictive and ill defined that a lot of people end up just making up something and going with it.

I’ve seen contractors with numbers in their paperwork that was obviously made up by putting a completely random number (they even admitted to that privately).

It’s important? No, is a risk that could destroy your bussiness? Certainly.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#297

Post by magduf »

yostrovs wrote: post #295
magduf wrote: post #294

Earlier quoted context omitted.

>3) The incentive for rich people to move to low tax destinations would be even greater than it already is. I don't know why people keep harping on this, it simply isn't true at all. If it were, all the rich people would be living in Somalia right now, and they aren't, they're living in high-tax, high-CoL areas. Very few rich people live in a way that allows them to live anywhere on the planet. Most "rich" people in…

You're conflating all sorts of rich people into a single type and then use that as the universal example. Warren Buffet lives in Nebraska and operates his conglomerate just fine from there. This he was doing before the internet age, something that now allows for even greater freedom of moving and operating from distant places.

Warren Buffet is one of the richest people in the world, on par with Bill Gates. He isn't representative of "rich people", which in America can be said to be 1% of the population (or several million people).

Nebraska isn't exactly third-world either.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#298

Post by dawnerd »

xondono wrote: post #296
dawnerd wrote: post #163

Earlier quoted context omitted.

Escape rooms and haunted houses are a nightmare in local fire code in the states as well. Ends up putting a lot of smaller productions out of business.

If it were that, I’d understand. The main issue my friends had was with declaring their “official activity”. In spain you need to declare what activity your bussiness is into, and the categories available are so restrictive and ill defined that a lot of people end up just making up something and going with it. I’ve seen contractors with numbers in their paperwork that was obviously made up by putting a completely ran…

Wow that's pretty lame then. We have something similar but it's not really something you're held to, mostly just for them to have an idea what your deductions should be (or something like that, not a tax expert). Wondering, could they classify themselves as theater or similar? That's what's commonly used at least in the circles Im part of.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#299

Post by freedomben »

Proven wrote: post #108
yann63 wrote: post #2

Couldn't we just ban tax evasion? What makes it so hard? (honest question) A recent European study has shown that the more company win money, the less they pay in taxes (in percentage). Is it because of bad laws? Corrupt politicians? Something else?

> Is it because of bad laws? No, it's because of the good laws. Taxation is theft. And it's not called tax evasion but tax planning. No one is obliged to pay more than the minimum.

Dude I know this is weird but looking at your comment history I'd love to talk to you. If you're up for it, my contact info is in my profile.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#300

Post by JetSpiegel »

sbacic wrote: post #261
BartBoch wrote: post #235

Earlier quoted context omitted.

I think you are completely missing what's going on... Google generates revenue in Poland. They have operations in Poland and all (so they use all the public goods like employees, infrastructure, safety etc.). They should pay taxes in tens of millions of Euros for this. But instead, they generate fake expense in Ireland, send an invoice to the Polish office, call it "branding" or something else, the invoice is big eno…

I'm genuinely curious - what operations does Google have in Poland? I was under the impression that all the "valuable" stuff was being made in the US and that their subsidiaries just handle localization, support and local sales. Is that incorrect? If that is correct, then it makes perfect sense to shift profits - after all, it's not like Google Poland just came up with their new foobuz algorithm that is providing val…

> local sales

> They're just selling it there.

This is literally the money generating part, the rest are cost centers.

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