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Germany approves global minimum corporate tax

reuters.com

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Re: Germany approves global minimum corporate tax

#31

Post by richdougherty »

generic92034 wrote: post #26
johngladtj wrote: post #21

Earlier quoted context omitted.

Only temporarily. Over time investors will simply not invest if they aren't suitably compensated.

Well, wouldn't they have a hard time finding suitable markets, if about every large market adopts those taxes? The USA already has them. It is an OECD initiative.

Just speculating, but perhaps share prices would drop until the returns per dollar invested recovers to the desired level. So it might be like a one off shock to investors who hold shares now, since the new equilibrium has shares priced lower to get the same returns as before the tax.

Re: Germany approves global minimum corporate tax

#32

Post by imtringued »

perryizgr8 wrote: post #15

I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually. I don't think these additional taxes make any sense along with a personal income tax. It should be one or the other.

That isn't the point. There are lots of countries with high corporate income taxes on the domestic level.

By the way, the consumer only ends up paying the tax if the taxed corporate income is necessary for a future investment or production process. If the corporate income is paid out to owners and investors then the consumer carries none of the cost.

The point is that all countries should equalize their tax rates so that the differences between tax optimized international companies and unoptimized local companies shrinks.

Re: Germany approves global minimum corporate tax

#33

Post by smotched »

User23 wrote: post #4

The most interesting part to me is that Germany is attempting to tax worldwide income. The USA does this of course, although there are tax treaties that can reduce US taxes on some foreign earnings. The USA can get away with this because most companies simply can’t exit the US so there will be assets to seize and so on. On the other hand Amazon or Google or even Apple could just nope out of Germany and preserve their…

They cant nope out of the entire EU though.

Re: Germany approves global minimum corporate tax

#34

Post by imtringued »

thelastgallon wrote: post #30
zemvpferreira wrote: post #24

Earlier quoted context omitted.

I personally would. Corporations are not people and shouldn't be treated as such. Taxing personal income after receiving dividends or salary seems like a much better option all-around.

Or, don't tax people's income; just tax corporations on profit/revenue. The wealthiest 0.1% have negligible income; the middle class bears the brunt of taxation. All companies run on corporate welfare. They refuse to do anything without significant funding from Govt. Big 3 Auto got many bailouts, $250B in profits but don't have any money to build charging stations/network or invest in making an EV that people would l…

You can't tax on revenue because that would result in taxing the same revenue multiple times. You would have to tax added value instead.

Re: Germany approves global minimum corporate tax

#35

Post by Eddy_Viscosity2 »

User23 wrote: post #4

The most interesting part to me is that Germany is attempting to tax worldwide income. The USA does this of course, although there are tax treaties that can reduce US taxes on some foreign earnings. The USA can get away with this because most companies simply can’t exit the US so there will be assets to seize and so on. On the other hand Amazon or Google or even Apple could just nope out of Germany and preserve their…

I think Amazon and Apple noping out of Germany and EU would be a huge opportunity for new businesses to get a foothold. It would be great to get some competition back in the marketplace.

Re: Germany approves global minimum corporate tax

#36

Post by pauldenton »

generic92034 wrote: post #17
perryizgr8 wrote: post #15

I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually. I don't think these additional taxes make any sense along with a personal income tax. It should be one or the other.

> I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually. So it is impossible that the profit for owners/shareholders/etc. will sink instead of prices rising?

If that's what you want, why not just tax the money when they take it out of the corporation, instead of while within it? If that company is spending 10 million on a factory, instead of taking out that 10 million to pay bonuses to Executives, you should encourage the former and discourage the latter. If you tax something you get less of it and if you subsidize something you get more of it.

Re: Germany approves global minimum corporate tax

#37

Post by Horffupolde »

Epa095 wrote: post #27
perryizgr8 wrote: post #15

I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually. I don't think these additional taxes make any sense along with a personal income tax. It should be one or the other.

I invite you to actually spell out that argument. Remember that companies are taxed on their surplus, not their income. So this means that these kinds of taxes are not a extra cost that is evenly distributed among all companies, companies with low or no surplus will pay little. Up-coming competitors (with low surplus) get an advantage, increasing competition. If the companies could simply increase their prices 15% to…

No, because that’d be an independent increase. In this case shareholders are arbitraging their capital against central bank interest rates. So parent holds.

Re: Germany approves global minimum corporate tax

#38

Post by alphanullmeric »

golemotron wrote: post #12

They shouldn't be surprised if corporations leave their market. I'm philosophical about this. The world is moving toward smaller more fragmented economies. On the negative side, supply chains will have to adjust and the world economy will become less dynamic. On the plus side, local economic ecosystems will develop. Diversity.

This is an EU country. Their response to not liking your overreach is to make it illegal to complain, mantle it illegal to leave.

Re: Germany approves global minimum corporate tax

#39

Post by petre »

generic92034 wrote: post #26
johngladtj wrote: post #21

Earlier quoted context omitted.

Only temporarily. Over time investors will simply not invest if they aren't suitably compensated.

Well, wouldn't they have a hard time finding suitable markets, if about every large market adopts those taxes? The USA already has them. It is an OECD initiative.

Russia, China and almost the whole of African, Asian and Middle Eastern states are not OECD members. Most South American and Eastern European states are applicants. The corporations could try to sell their stuff and avoid this tax in the Middle Eastern states that are not under sanctions and possibly India and Pakistan. The rest are either under sanctions, export restrictions, too poor or too small to bother with or they'll have a hard time getting their profits out of.
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