France has approved a digital services tax despite threats of retaliation by US • Hacker News Board

Re: France has approved a digital services tax despite threats of retaliation by US

#351

Post by alwayseasy » Thu, Jul 11, 2019, 9:49 PM UTC

European regulations and taxes always come up in these threads and some libertarians complain about how it's an unfair way to treat a digital company that shouldn't pay taxes.

Just remember that the United States are subsidizing tech companies (tax amnesties) and all the upside (high salaries, innovation, stock market growth etc...) is going back to the US while the downside of tech companies (electoral manipulation, teen depression, tax avoidance, privacy breaches) is only felt in Europe with no upside.

Re: France has approved a digital services tax despite threats of retaliation by US

#352

Post by opportune » Thu, Jul 11, 2019, 9:49 PM UTC

charlesdm wrote: post #333

opportune wrote: post #284

Earlier quoted context omitted.

>tax-evasion and tax-reduction are two different things, equating them is an argument in bad faith I beg to differ, the only difference is that one is by definition illegal and the other is by definition legal. Tax reduction can mean chasing tax incentives responsibly, which is fine, but can also mean deliberately engaging in weird financial engineering that violates the spirit of the law but not the letter. Like if…

To each their own view, but the more wealth someone builds up, the more complex their tax affairs become. Especially if operating internationally. The 401k example is good for a normal employee. But what if I have businesses in Poland, the UK and Belgium and I can book my investment gains in either of those countries? Am I evading tax because I book it in the country with the lowest taxes? No. You'd be crazy to book…

"In my view only the exact letter of the law can be interpreted as a set of rules to determine whether you're breaking the law or not."

True, and that's what happens in practice. Which is why it's fine and understandable, to me, when countries take measures to close tax loopholes.

"But what if I have businesses in Poland, the UK and Belgium and I can book my investment gains in either of those countries? Am I evading tax because I book it in the country with the lowest taxes? No. You'd be crazy to book it in the highest tax county if you have the freedom to not do so."

Yeah, that makes sense. But going out of your way to create an optimal corporate structure of subsidiaries, licensing agreements, etc. all based in particular tax advantaged countries based purely on tax law is a lot more involved than that.

Re: France has approved a digital services tax despite threats of retaliation by US

#353

Post by weberc2 » Thu, Jul 11, 2019, 9:51 PM UTC

abdullahkhalids wrote: post #330

weberc2 wrote: post #278

Earlier quoted context omitted.

> Having the option to not comply with laws, is an unfair advantage. All parties in this scenario are legally compliant. > VAT is a sales tax, effectively, but even that is managed away fairly easy. It's an efficient tax, but when it comes to B2B activity it's effectively unpaid. Amazon, though is a retailer, has a very large amount of B2B business. How does its B2B business help Amazon evade taxes? When I think abou…

> All parties in this scenario are legally compliant. They were complaint with the letter of the law, but the law makers decided that the companies were not complaint with the original spirit of the law. So they introduced a new law so that all parties can also be complaint with the spirit. In software engineering terms, the written down code was not producing intended behavior. So new code has been written to deal w…

That seems like a reasonable history of the events, but I don't think it supports the original position that these tech companies had an unfair advantage. Or if it does, only for some definition of "fairness" that is subject to the whims of (biased) French legislators.

Re: France has approved a digital services tax despite threats of retaliation by US

#354

Post by leppr » Thu, Jul 11, 2019, 9:53 PM UTC

smolder wrote: post #339

colpabar wrote: post #310

Earlier quoted context omitted.

Out of curiosity, would you say most French people think the same way? I ask because I'm American and we really hate taxes here.

I'm American and I support the French doing this. Some Americans "hate taxes", but I have enough money. What I don't have is enough control in a country ruled by oligarchs and corporate fiefdoms. Governance is all about fostering a healthy society, by balancing incentives and disincentives. If you don't do that actively and carefully, curbing abuse and exploitation, then they grow to a breaking point.

So you believe paying more taxes somehow gives the taxpayers more control over their country ? Giving away more money doesn't mean you have more control over how said money is used. The most direct consequence actually goes in the other direction, you have now less agency (=money). There's no obvious mechanism that makes a monopoly (=government) more accountable the more money it's given.

Re: France has approved a digital services tax despite threats of retaliation by US

#355

Post by bacon_waffle » Thu, Jul 11, 2019, 9:54 PM UTC

alwayseasy wrote: post #351

European regulations and taxes always come up in these threads and some libertarians complain about how it's an unfair way to treat a digital company that shouldn't pay taxes. Just remember that the United States are subsidizing tech companies (tax amnesties) and all the upside (high salaries, innovation, stock market growth etc...) is going back to the US while the downside of tech companies (electoral manipulation,…

In addition, the United States is exporting its tax system around the world and imposing costs on the rest of the world in the process via FATCA and FBAR.

Re: France has approved a digital services tax despite threats of retaliation by US

#356

Post by labster » Thu, Jul 11, 2019, 9:55 PM UTC

fzeroracer wrote: post #306

colpabar wrote: post #287

Earlier quoted context omitted.

Sure, but assume they somehow pass the tax 100% onto the customer. So now French citizens are the ones paying for the "right to the free market" of their own country. Does that seem fair?

This typically doesn't happen. Companies don't pass the increases in taxes 100% to the consumer. By that argument all taxes would be immoral since they directly increase the prices consumers pay. Now we can argue as to how much said tax is passed onto the consumer and whether or not the additional tax revenue towards various social services offsets the hit. Which is an important distinction to make when choosing what…

> By that argument all taxes would be immoral since they directly increase the prices consumers pay.

I'm not following this chain of logic. How is increasing the consumer price immoral? Regressive tax structure or something?

Re: France has approved a digital services tax despite threats of retaliation by US

#357

Post by ska » Thu, Jul 11, 2019, 9:56 PM UTC

bko wrote: post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

Your stated view of taxation is oversimplified. Certainly some taxes can be viewed as fee-for-service, others are protectionist or strategic, or otherwise effect policy.

If you want a simplified version, you are better off thinking of it something like this: The purpose of taxation is to capture a fraction of the economic activity and use that to fund the business of government.

(this doesn't capture explicit redistribution, but keeps it simple)

Re: France has approved a digital services tax despite threats of retaliation by US

#358

Post by nybble41 » Thu, Jul 11, 2019, 9:58 PM UTC

sbov wrote: post #222

vixen99 wrote: post #209

Earlier quoted context omitted.

What about the money the French make by using Google services? Desktop search traffic originating from Google is 90% - presumably for a good reason. https://www.statista.com/statistics/220534/googles-share-of-...

How much of that money is money that was going to be spent anyways? It's only money Google "made" for the French if it wasn't going to be spent in France in the first place.

It's not the quantity of money spent that matters, but rather the value received in exchange. People spent their money at e.g. Amazon because that is where they expected to receive the most value for it. Take that option away and the money will still be spent but the value received in return will be less.

Re: France has approved a digital services tax despite threats of retaliation by US

#359

Post by braythwayt » Thu, Jul 11, 2019, 9:59 PM UTC

AdrianB1 wrote: post #337

braythwayt wrote: post #239

Earlier quoted context omitted.

With respect, you do not understand the logic behind taxes, much less the logic behind taxing international businesses. > The idea behind taxes is that you use some public resource and you pay for that service You are framing taxes as if the government is a business selling people health care, fire protection, security, and infrastructure. I benefit from infrastructure I don't personally use. For example, even if I a…

The flaw of this argument that government is selling services is that the government is not selling, it is forcibly collecting money for some vague promises of services. When you buy something in the store the owner doesn't point a gun at your head asking for the money.

Your reply is a great example of why talking about taxes in an open forum is often a waste of time.

We start with a discussion about whether this one particular tax is reasonable or unreasonable because of jurisdiction issues, and before long you realize that a bunch of the people arguing against that tax don't really care about the jurisdiction issue, their real agenda is that they don't want any taxes, any governments, or any societies.

You are entitled to your beliefs, of course, but you really shouldn't respond to me. You should just post at the top level that not only should France not tax internet giants, but it shouldn't tax its citizens or anyone else.

Re: France has approved a digital services tax despite threats of retaliation by US

#360

Post by da_chicken » Thu, Jul 11, 2019, 10:01 PM UTC

99052882514569 wrote: post #206

weberc2 wrote: post #184

Earlier quoted context omitted.

I'm trying to follow the argument in good faith, so bear with me... > This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris that's trying to compete online. Are you sure it's "an unfair advantage" and not just "an advantage"? Doesn't your position presume that the brick-and-mortar business model deserves special protection? If so, why? If not, what then is unfair abou…

>Are you sure it's "an unfair advantage" and not just "an advantage"? Doesn't your position presume that the brick-and-mortar business model deserves special protection? If so, why? Because it employs more people and pays taxes locally. It's perfectly valid for the government to ignore that and focus solely on the consumer side (i.e. minimize prices), but it's also perfectly valid (and economically sound) to do what…

> > Doesn't this all point to a fundamental problem with "corporate tax"? Wouldn't it be better (fairer) to reduce or remove corporate tax and raise sales tax or similar, such that it doesn't matter whether the business has a presence in the country in question?

Well, now you run into the problem of progressive vs regressive taxation. Since consumption taxes, as the name implies, tax consumption, and the poor have a marginal propensity to consume of almost 1.0 while the wealthy can have an extremely low marginal propensity to consume, it's reasonable to conclude that consumption taxes are taxing the people who are least able to pay and who would already be spending that money anyways. You're taking away money that would already have stimulated the economy elsewhere.

Taxing the poor runs into these kind of zero-sum problems much more quickly. The rich tend to save or are more able to engage in activities which produce products of much more questionable economic value (i.e., bitcoin farms, copyright trolls, rent-seeking, etc.). Obviously investment has value, but in economic terms it may or may not generate a commensurate amount of wealth.