US blocks crackdown on tax avoidance by net firms like Google and Amazon • Hacker News Board

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#51

Post by amirmc » Mon, Jul 15, 2013, 12:08 PM UTC

cmdkeen wrote: post #17

dantheman wrote: post #4

Earlier quoted context omitted.

Well I agree with you that the foreign earnings things completely crazy. Using one bad policy to argue against a good one is just as bad. This is a good move on the part of the US, what we also need is the ability to move corporate profit from foreign subsidiaries back into the US without facing tax.

You're missing a step though - which is that these corporations do everything possible to avoid paying the due tax on those foreign profits. I'm all in favour of getting to repatriate profits then - but taking the profits through a tax haven needs to be stopped first. Take Google in the UK for instance. They don't "sell" anything in the UK according to their tax returns, so claim every deal is actually finalised thro…

For those who'd like to know more about Tax Havens, how corporations use them and the effect they have, I can thoroughly recommend Nicholas Shaxon's book, Treasure Islands [1]. For example, I never really considered why all my Amazon purchases mention Luxembourg.

[1] http://www.amazon.com/Treasure-Islands-Uncovering-Offshore-B...

(Disclaimer: That's an affiliate link via my college library. Feel free to strip it if you don't like such things)

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#52

Post by patrickaljord » Mon, Jul 15, 2013, 12:13 PM UTC

Nursie wrote: post #41

patrickaljord wrote: post #37

Earlier quoted context omitted.

Google and Amazon already pay plenty enough taxes here, they employ thousands of people and pay millions in salary tax. They contribute to improving people's life thanks to their great products unlike the State that only creates more debt. But to answer your question, I think that as a French citizen I pay too much tax and I'm glad Google and Amazon are able to get away with it. I applaud anyone who manages to not fe…

>> I think that as a French citizen I pay too much tax and I'm glad Google and Amazon are able to get away with it. Even though their activities directly increase your own tax bill. You have an odd way of thinking. >> taxing Google and Amazon more wouldn't change anything for local companies. Of course it would, their tax avoidance games mean nobody else can compete. You can argue that lower tax for everyone is a goo…

> Even though their activities directly increase your own tax bill. You have an odd way of thinking.

The French State creates € 12 billions in debt each month [1]. If you think them paying any more taxes would decrease my tax bill in any way, then you have an odd way of doing math.

1: http://www.planetoscope.com/comptes-publics/315-compteur-de-...

> Of course it would, their tax avoidance games mean nobody else can compete.

Are you seriously saying that the reason Google has no competition in France is because they pay less taxes? Even Microsoft, the multi-billion dollar company failed to do so with Bing but if only Google paid its full taxes then French companies would be able to take over is what you're saying? I very much doubt that.

> I really don't see how you can argue for the perpetuation of special exemptions for those that can afford it

As long as there is no low flat-tax but unfair and complicated tax system. People will always try to avoid it. Get rid of your insane tax system and you'll get rid of these special exemptions. Just like getting rid of alcohol prohibition got rid of the bootlegging problems.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#53

Post by adventured » Mon, Jul 15, 2013, 12:14 PM UTC

camus wrote: post #10

forgottenpaswrd wrote: post #6

It talks about France. France is a machine of expending money right now, better said, of wasting money. I am living in France this Summer, a very rich and beautiful country with a hole in the pocket. French people love to life well, and someone else to pay the bills, the Germans, the rich, whoever but not them. Mr Hollande only want to do one thing, to raise taxes. But there is never enough money when you don't expen…

You should go back to where ever you come from or wherever it is better for you to live. Sarkozy ruined France so yes now everbody needs to pay for it. And the problem is not taxes,i'm happy to pay taxes. The problem is people like French liberals ( liberals are "right-wing" in France ) that gives hand outs to their friends or vote laws without financing their them , and then all they have left is blaming the poor,th…

If by solidarity you mean the state slavery of collectivism, then you're absolutely right, Americans are often very individualistic.

If you by solidarity you mean there's no sense of nation, then you're just making it all up as you go along.

However, trying to pigeonhole the most diverse country in world history on such a simplistic basis, is impossible. Only someone that has never spent much time in the countless cultures of America, would make such a statement.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#54

Post by patrickaljord » Mon, Jul 15, 2013, 12:20 PM UTC

weavejester wrote: post #49

patrickaljord wrote: post #38

Earlier quoted context omitted.

Public health-care is a complete failure here in France. We actually pay more than Switzerland where it's privatize and the French assurance maladie is going completely bankrupt while being forced on us. Many pure scientific research have been done by private entities, I don't see why only public programs could do any pure scientific research. Plus, if the people were given their money back , maybe they could use it…

WHO ranks the French health care system as the best in the world, and the expenditure per capita is less than Switzerland (at least in 2007), so I'm not sure where you're getting your numbers from. I also suspect you'd have a hard time finding private companies willing to spend $9 billion on a particle accelerator with no foreseeable profits. I'm generally against subsidising any industry, but letting Google and Amaz…

> WHO ranks the French health care system as the best in the world, and the expenditure per capita is less than Switzerland (at least in 2007), so I'm not sure where you're getting your numbers from.

http://www.securite-sociale.info/

http://reachfinancialindependence.com/french-healthcare/

FYI: it's forbidden by law to leave social security in France and to encourage others to do so. Best system ever indeed, once you get it you never leave it unless you're ok with jail time.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#55

Post by amirmc » Mon, Jul 15, 2013, 12:21 PM UTC

nawitus wrote: post #19

cmdkeen wrote: post #17

Earlier quoted context omitted.

You're missing a step though - which is that these corporations do everything possible to avoid paying the due tax on those foreign profits. I'm all in favour of getting to repatriate profits then - but taking the profits through a tax haven needs to be stopped first. Take Google in the UK for instance. They don't "sell" anything in the UK according to their tax returns, so claim every deal is actually finalised thro…

The problem with preventing the use of 'tax havens' is that there's no non-arbitrary way to decide if a company is truly using another country as a tax haven, or that they are actually using developers from another country. In the Google example, Google UK is clearly benefiting from the developers that work outside UK, therefore they should be able to pay 'brand fees' or whatnot to the 'main Google'. Of course in thi…

> "The problem with preventing the use of 'tax havens' is that there's no non-arbitrary way to decide if a company is truly using another country as a tax haven..."

It doesn't matter whether a specific company uses tax havens or not. The problem is that tax havens exist (and there are reasonably good definitions of how to recognise one).

Companies, who's role is to maximise shareholder value/profits etc, will use them within the extent of the law. That means it's the laws that need to change.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#56

Post by znowi » Mon, Jul 15, 2013, 12:40 PM UTC

Actually, in the same manner the US initiated a massive FUD campaign against the "evil" (non-US) forces at the ITU summit last year in Dubai. Behind the facade of "save the Internet", the agenda was to save the Internet giants like Google and keep the US control over the net. In light of NSA revelations, it has even more sinister overtones.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#57

Post by patrickaljord » Mon, Jul 15, 2013, 12:40 PM UTC

danmaz74 wrote: post #43

patrickaljord wrote: post #33

Earlier quoted context omitted.

Any observers here for the last 60 years have noticed that the more tax revenues we get, the more ambitious we get with out spending and the more debt we create. The day France gets no or too little tax revenue and very bad rating is the day it'll be forced to cut spending. Until then, time has proven that it will never seriously cut spending.

Correlation is definitely not causation...

But there is a clear causation here. In order to keep increasing spending forever as they are doing, govs need tax revenue, the more money they are allowed to borrow, the more debt they can create. They couldn't create so much debt if they didn't have tax revenue to justify their ability to repay their debt. Problem is, at some point, if you want to keep on increasing spending and therefor your debt forever, you have to increase taxes forever too and that's what's killing the economy. Not to mention that it doesn't even work http://en.wikipedia.org/wiki/Laffer_curve

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#58

Post by patrickaljord » Mon, Jul 15, 2013, 12:55 PM UTC

mtgx wrote: post #8

If you make a certain amount of money in a certain country, then you should pay that country's taxes. Pretty simple concept, no? This whole "let's reroute all our profits from all the countries into this country where the taxes are close to zero" is utter BS. If you don't like its taxes, don't do business in that country. Simple. If the government thinks they're losing businesses with high taxes, then maybe they will…

> It's their and their citizens' prerogative.

No it's not. Our states are not pure democracies. If a majority of people decide by referendum that we should kill all Arabs, it would not be their "prerogative". That's because we are constitutional republics before being democracies. That is to say we all have to abide by what our constitutions say no matter what the majority say. And last time I checked, our constitution protects private and individual property. Therefor, a 75% tax or even 50% like we have in France goes against the protection of private property in our constitution and it was rejected by the supreme court here. Any taxation goes against the very basis of our constitutions and therefor should not be treated lightly or abused. Or do you think that if a majority decides it's ok to tax people 100% then that's ok because it's "their prerogative"? How about if a majority decide women shouldn't vote anymore either, would it be their prerogative too? The answer is no. Google and Amazon already pay lots of taxes in the US, if they had to pay in every single country, they'd have much less money to invest in all those products we enjoy while the government would just create more debt.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#59

Post by patrickaljord » Mon, Jul 15, 2013, 12:59 PM UTC

amirmc wrote: post #55

nawitus wrote: post #19

Earlier quoted context omitted.

The problem with preventing the use of 'tax havens' is that there's no non-arbitrary way to decide if a company is truly using another country as a tax haven, or that they are actually using developers from another country. In the Google example, Google UK is clearly benefiting from the developers that work outside UK, therefore they should be able to pay 'brand fees' or whatnot to the 'main Google'. Of course in thi…

> "The problem with preventing the use of 'tax havens' is that there's no non-arbitrary way to decide if a company is truly using another country as a tax haven..." It doesn't matter whether a specific company uses tax havens or not. The problem is that tax havens exist (and there are reasonably good definitions of how to recognise one). Companies, who's role is to maximise shareholder value/profits etc, will use the…

> It doesn't matter whether a specific company uses tax havens or not.

The only reasons there are tax havens is because there are tax hells.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#60

Post by danpat » Mon, Jul 15, 2013, 1:02 PM UTC

Silhouette wrote: post #46

ezequiel-garzon wrote: post #7

Earlier quoted context omitted.

The moment you're trading in another country you must honor their laws and taxes. If the costs become too high and the margins too low you can always leave, or skip said country in the first place.

The moment you're trading in another country The difficulty is in defining what "trading in another country" actually means. If you sell a physical product, there are some unambiguous facts that can be considered: where was the product made, where did its components come from, where was it delivered, that kind of thing. If you're selling information, say an e-book or an MP3 download, things are slightly more ambiguou…

For the US, IRS publications 515 and 519 clarify all that stuff. The IRS wants to tax "US Source Income", there are various criteria that define it. For goods sold from overseas and shipped to the US, it call comes down to "where it is sold", which is at the discretion of the seller. It can be at the customers end if that's convenient for you (but it rarely is).

I worked for a Canadian company that sold niche hardware primarily into the US market. We were based entirely in Canada and just shipped to the US using UPS.

We regularly had to convince US business buyers that they didn't need a W-9 from us, nor did they need to withhold taxes.