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G7: Rich nations back deal to tax multinationals

bbc.co.uk

481–490 of 931 posts

Re: G7: Rich nations back deal to tax multinationals

#481

Earlier quoted context omitted.

> Henry George - a 19th century political economist - proposed exactly this, and suggested the only thing that should be taxed should be land That may have made sense in the 19th century when agriculture dominated the economy, but it’s irrelevant today. At scale it becomes a tax on how space-inefficient your business is. Bad news for farmers, great news for the business running a 1000-person operation out of a skyscr…

Land taxes are based on the value of the land, not the size of the land. The property tax system already performs land value assessments. Land taxes are highly progressive. Note that land taxes are only assessed on the value of the land, not the value of any buildings on the land. This incentivizes land owners to put the land to its highest and best use.

> Land taxes are highly progressive.

Maybe in the 19th century, where this idea originated. Economics of business have changed too significantly to use it as a one size fits all taxation scheme.

It may have made sense when revenue was somewhat proportional to the amount of land a business occupied, but that no longer holds true in the age of skyscrapers and digital revenue generation.

An internet company in a 10-story building would love this scheme, though, because they could generate billions in revenue but be taxed at the same rate as a local neighborhood of people who owned their homes for a few decades.

Land-only taxes may have been an interesting idea in the 19th century, but they aren’t relevant to a modern economy.

Re: G7: Rich nations back deal to tax multinationals

#482

Earlier quoted context omitted.

It's even better - they work out if you paid too much automaticallly and send you a check in the mail. Had 3 checks over the past decade or so from having time off between jobs but paying full rate for the remaining time. Nothing quite so satisfying as a £1000 check from HM Revenue and Customs!

Would I be correct in suspecting that you don't get interest on overpaying, but get charged serious fees for having to pay too much on tax day?

No. HMRC pay interest on money they hold that belongs to you. You pay interest if you fail to pay on time.

They may additionally fine you though.

Re: G7: Rich nations back deal to tax multinationals

#483
post #480
post #248

Earlier quoted context omitted.

> Anyway this could be the push that the EU needed to start their own Silicon Valley. Given the combined market caps of Apple, Microsoft, and Amazon (~$5.6T) is larger than the national net worth of all but the four largest EU countries, I don’t think there’s a lack of motivation here.

[edit] "all but the four largest"... my bad, I misread. Not sure why comparing mega-corps to small nations has much value though. Not sure where you got your info, but I'm afraid it seems inaccurate. The total wealth of the four largest EU nations, as of 2019, are as follows: Germany: $14.7T UK: $14.3T France: $13.7T Italy: $11.37T Just FYI, the three wealthiest nations are: the US at $106T, China at $64T, and Japan…

" of all but the four largest "

So those 4 not included.

Re: G7: Rich nations back deal to tax multinationals

#484

Earlier quoted context omitted.

> Henry George - a 19th century political economist - proposed exactly this, and suggested the only thing that should be taxed should be land That may have made sense in the 19th century when agriculture dominated the economy, but it’s irrelevant today. At scale it becomes a tax on how space-inefficient your business is. Bad news for farmers, great news for the business running a 1000-person operation out of a skyscr…

Tax intellectual property too then. This would also help push back against ridiculous patents and eternal copyright.

This would prevent me, an individual inventor of (I'll claim) non-ridiculous inventions, from monetizing my efforts. The monetary barriers to patent protection and enforcement are already significant to me. I can't be the only one in this circumstance.

Eternal copyright, however - yes, sucks.

Re: G7: Rich nations back deal to tax multinationals

#486

Earlier quoted context omitted.

That’s a choice, and one we could change. My company is taxed on revenue (under the Washington State B&O tax scheme, and similar local tax schemes). Taxing based on revenue is viable, it just needs to be done with a little more care up front.

Tax on revenue is just a sales tax on the consumer of that product or service. You might as just increase sales taxes and remove corporate taxes entirely.

All taxes are ultimately paid by the consumer. In that regard, I agree just impose a national sales tax, get rid of everything else, and be done with it. Gets rid of all the complexity and games played with income taxes.

Give everyone an automatic refund of $X to make it non-regressive. This could be done as a monthly payment, an "advance refundable tax credit" like the stimulous payments.

Re: G7: Rich nations back deal to tax multinationals

#487
post #15

Earlier quoted context omitted.

It's complicated. "Money they made in their country" is hard to define. Large companies abuse intangible assets to shift profits around, but it's hard to say at what point abuse starts. For example, Google USA sells advertising to its clients. But, the assets it is selling are actually owned by Google Ireland. Google Ireland charges Google USA a license fee of 100% of the revenue they made. Suddenly, Google USA has n…

> Probably the best solution is a minimum tax worldwide. I saw a similar comment earlier this week. I don't understand why first world people think developing countries would agree to this minimum tax and not undercut them on day 1 to attract investments and jobs. There are no global tax authorities. Nobody is going to enforce these things. Even this G7 treaty is going to be a mess in practice because multilateral tr…

It’s like fixing bugs in software: I don’t expect any given proposal to solve everything or to close every loophole and workaround, but it’s still important to put continuous effort into trying.

Re: G7: Rich nations back deal to tax multinationals

#488

Earlier quoted context omitted.

A flat tax on business without deduction seems like it would squash smaller players that must devote a larger percentage of their profits to fixed costs.

Deduction means hiring people to do your deductions. Flat rate for everyone means less money spent on tax consultants.

I was thinking of either a standard deduction, or a deductionless progressive tax

Re: G7: Rich nations back deal to tax multinationals

#489
post #469

Earlier quoted context omitted.

But then it's highly unfair to tax humans on revenue , but corporations on profit . I think the right answer is VAT + externalities taxes (LVT, Cabon tax, etc.) + UBI, which is both very easy to enforce and perhaps net progressive enough. Re "progressive enough": I don't so much care if BWM owners are screwed over relative to private jet owners on paper, I think reducing work hours and propping up demand at the botto…

> But then it's highly unfair to tax humans on revenue, but corporations on profit. Wow, it's a good thing we don't do that. Good news, the income you spend to further your business is deductible. We include a personal exemption for generic costs, child exemptions, mortgage exemptions, healthcare cost exemptions, retirement savings exemptions, and numerous others. Additionally, the whole concept behind a progressive…

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Re: G7: Rich nations back deal to tax multinationals

#490

Is this really about taxing multinational companies or is this about establishing a "minimum 15% corporate tax rate" for every SME and mom and pop shop? TFA says that Ireland is going to accept the change: atm they've got a 12.5% tax rate. What about Hungary? Corporate tax rate at 9%. Once this shall be in place, the one sure thing is this "minimum 15%" is only ever go up, never down. There won't be any incentive eve…

Both. USA wanted minimum tax another countries were more competitive.

Other countries are pissed at Google charging for day Adverts but paying no tax in there country on services they sell.

A compromise was made.

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