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Tech giants face 2% UK digital services tax

bbc.com

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Re: Tech giants face 2% UK digital services tax

#31

Post by nine_k »

abainbridge wrote: post #20
nine_k wrote: post #9

Earlier quoted context omitted.

So you see it as a tariff? Do not let the more efficient foreign player in, to let the local equivalent develop? Economically it does not make sense, if we are looking for a global optimum (literally); this is the standard free-trade argument. It may make sense if there's no global trust; you don't want to depend on products of a potential unfriendly party, or let them have a large foothold in your economy, just, wel…

I take your point, but I think you've over simplified the situation. For example, in days gone by, the UK tax system happily forced retailers to pay vast amounts of tax ("business rates") based on the shops they occupied in town centres. This was part of the total tax burned on retailers. Online retailers avoid this tax and thus could be considered to have an unfair advantage over bricks-and-mortar stores.

Can any advantage even be fair, under such an angle? If it's legal, it's "fair". Hence, laws are being updated to level the playing field, that is, to remove the advantage which to the lawmakers looks excessive (as in making traditional industries fail) and exploitable to the benefit of the local economy (they will pay because it's still profitable).

Re: Tech giants face 2% UK digital services tax

#32

Post by njarboe »

infinitone wrote: post #17
user5994461 wrote: post #15

I was scared for a minute. I thought this was about taxing consumer for accessing internet. It's fine. It's about taxing giant corporations who are evading taxes.

It'll likely trickle down to the consumer... the consumer will end up paying somehow.

This only happens in highly competitive markets like say, cotton t-shirts, gasoline, or wheat. It is not like Facebook is now going to have charge more for a social media account to stay afloat among a sea of other social media companies. No, Facebook (and Google, etc) will have to pay their corporate tax like they should. Although I think the new US corporate tax code is already going to prevent the current evasion schemes until, of course, new ones are invented.

Re: Tech giants face 2% UK digital services tax

#33

Post by 7952 »

notahacker wrote: post #7
fredley wrote: post #5

Good. It is becoming more and more apparent that there is a toll on society created by these companies. They have a negative impact on our domestic businesses (traditional brick and mortar, as well as home-grown digital businesses) not to mention our mental health and even democracy. By taxing them, hopefully we can go some way to reversing some of that damage (although I'm less hopeful of that...).

Also, what seems to have provoked this tax in the UK specifically is the tendency for such companies to artificially lower their profits to more or less avoid UK corporation tax altogether by claiming that sales of UK clicks to UK companies handled by UK based account managers were in fact completed in Ireland...

Although isn't it the case that the actual product is almost entirely developed outside of the UK. It doesn't seem unreasonable to repatriate money to pay for that. It is exactly what happens to physical products that are manufactured overseas. The correct way of taxing that is VAT.

Re: Tech giants face 2% UK digital services tax

#34

Post by chrisseaton »

user5994461 wrote: post #15

I was scared for a minute. I thought this was about taxing consumer for accessing internet. It's fine. It's about taxing giant corporations who are evading taxes.

They aren’t evading taxes. If they were evading they’d be prosecuted rather than a new tax being introduced. They’re avoiding. Like we all do with our ISAs and pensions.

If you misuse the terms it makes it harder for everyone to talk precisely about the issue.

Re: Tech giants face 2% UK digital services tax

#35

Post by user5994461 »

Rjevski wrote: post #30
nicoburns wrote: post #23

Earlier quoted context omitted.

Pointing out this distinction makes it sound like it's fine as long as it's legal. It's like when people say "It's not terrorism when a state does it because terrorism is defined as non-state political violence". It's technically true, but largely besides the point.

There's a difference between killing people and (legally) avoiding tax. I care about innocent people dying, but I couldn't care less that greedy governments get less money (they don't deserve any money to be fair, considering how bad of a job they're doing).

Are you American because it sounds like you're an American and you hate your government?

There are countries where taxes actually pay things like healthcare, unemployment benefits or retirement and not financing wars in the middle east.

Re: Tech giants face 2% UK digital services tax

#36

Post by eertami »

chrisseaton wrote: post #34
user5994461 wrote: post #15

I was scared for a minute. I thought this was about taxing consumer for accessing internet. It's fine. It's about taxing giant corporations who are evading taxes.

They aren’t evading taxes. If they were evading they’d be prosecuted rather than a new tax being introduced. They’re avoiding. Like we all do with our ISAs and pensions. If you misuse the terms it makes it harder for everyone to talk precisely about the issue.

>Like we all do with our ISAs and pensions

I think it's a bit disingenuous to suggest it's like that, because the average person is not worth hundreds of billions of dollars.

Sorry but you cannot in good faith compare the impact of tax avoidance by Amazon to an individual's pension.

The problem really is that the loopholes are inaccessible to regular small businesses. A lot of small companies _do_ pay a fair level of tax which makes it difficult to compete with a company that doew not.

Re: Tech giants face 2% UK digital services tax

#37

Post by nailer »

fredley wrote: post #5

Good. It is becoming more and more apparent that there is a toll on society created by these companies. They have a negative impact on our domestic businesses (traditional brick and mortar, as well as home-grown digital businesses) not to mention our mental health and even democracy. By taxing them, hopefully we can go some way to reversing some of that damage (although I'm less hopeful of that...).

> They have a negative impact on our domestic businesses (traditional brick and mortar, as well as home-grown digital businesses

I have a home grown, UK based digital business. This is going to affect me negatively more than the continued existence of the FAANG companies.

Re: Tech giants face 2% UK digital services tax

#38

Post by chrisseaton »

eertami wrote: post #36
chrisseaton wrote: post #34

Earlier quoted context omitted.

They aren’t evading taxes. If they were evading they’d be prosecuted rather than a new tax being introduced. They’re avoiding. Like we all do with our ISAs and pensions. If you misuse the terms it makes it harder for everyone to talk precisely about the issue.

>Like we all do with our ISAs and pensions I think it's a bit disingenuous to suggest it's like that, because the average person is not worth hundreds of billions of dollars. Sorry but you cannot in good faith compare the impact of tax avoidance by Amazon to an individual's pension. The problem really is that the loopholes are inaccessible to regular small businesses. A lot of small companies _do_ pay a fair level of…

It’s fine to debate morals.

But it’s important to make a distinction between legal and illegal.

You’re accusing them of having a different opinion on a moral isssue to you. That’s one thing. Accusing them of doing something illegal - that’s something else. And it’s now super clear that it’s legal, since we’ve decided we have to introduce a new tax to tax them.

My issue isn’t with the debate - it’s about being precise. If you say everyone’s evading then you ruin the power of really saying someone’s evading. You’re crying wolf.

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