G7: Rich nations back deal to tax multinationals • Hacker News Board

Re: G7: Rich nations back deal to tax multinationals

#531

Post by jasonwatkinspdx » Sat, Jun 05, 2021, 5:49 PM UTC

njovin wrote: post #321

Taniwha wrote: post #292

Earlier quoted context omitted.

If you're going to legally treat corporations the same as actual humans - then tax them the same. We pay taxes for services we expect from governments, defence, policing, justice, water, sewers etc etc I don;t see why corporations that use all these things shouldn't pay their share

I look forward to the day that we punish corporations by removing their freedom (ability to operate) instead of fining them laughably small percentages of their yearly revenue for serious violations of laws and regulations. In reality I understand that this would harm the employees and the public to an unacceptable degree so maybe some form of “jail time” whereby all profits go directly to non-executive employees and…

One of my more radical political views is I'm 100% behind a corporate death penalty, as well as direct personal criminal consequences for company principals that engage in fraud or similar.

The sad reality of the world is that once a business is past a threshold of power, it's nearly impossible to hold them accountable. Craven sociopaths know they can do what they do, and worst case, suffer some bad press while they move on to the next thing, banking 100's of millions the whole way.

Make those people truly terrified of the consequences of their actions and politics will be utterly transformed.

Re: G7: Rich nations back deal to tax multinationals

#532

Post by rmah » Sat, Jun 05, 2021, 5:49 PM UTC

throwaway4good wrote: post #114

dd36 wrote: post #99

Earlier quoted context omitted.

It’s where they’re sold.

Maybe they should do a sales tax then.

The UK already has an 18% GST rate, which is equivalent to an 18% tax on revenues. In 2020, Apple had revenues of $274B and pre-tax net income of $67B. On which, they paid $10B in income tax (a 15% rate).

Apple revenues in the UK was about $2B. Which means Apple is already paying $360mil in GST tax to the UK gov. Apple also paid some amount of wage, income, real-estate and other taxes.

Let's imagine companies had to pay income tax on a pro-rated, point-of-sales basis. Thus, apple's pre-tax income for the UK would be 2/274 * 67 = $500M. At a 20% income tax rate, this would net the UK gov an additional $100M.

This is why they want this sort of thing. It has nothing to do with fairness. The US gov is generally opposed to pro-rating profits based on location of sales. Because the US tax code allows companies to effectively deduct foreign taxes from net income, income taxes paid overseas has the effect of reducing income tax paid to the US gov.

Re: G7: Rich nations back deal to tax multinationals

#533

Post by [deleted] » Sat, Jun 05, 2021, 5:50 PM UTC

usrusr wrote: post #520

dalbasal wrote: post #203

Earlier quoted context omitted.

The actual rate is the least important part. What is important is jurisdictional issues, accounting standards, corporate law, deferral rules and the like. This is the problem with corporation tax generally. You can't really have a conversation about it in "normal" terms, that a journalist, politician or MOP can understand. It can only be understood via scenario plans and spreadsheets. It's a million little details. T…

So true. It's a fixing the algorithm vs tweaking some parameters situation. PS: if I were to design a state I would make it a part of the constitution that laws must either be written with placeholder variables for any concrete numbers you'd want to put into them or specify only concrete values for those placeholders and nothing else. And no single vote can contain both kinds at once.

[deleted]

Re: G7: Rich nations back deal to tax multinationals

#534

Post by smnrchrds » Sat, Jun 05, 2021, 5:51 PM UTC

orf wrote: post #2

Summary: > Firstly, the G7 want a global minimum tax rate so as to avoid a "race to the bottom" where countries can undercut each other with low tax rates. > Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits. Good. It’s a shame that Biden had to back down from the initial 28% because of do…

Canada's corporate tax rate is 15%. Canada would have never agreed to double its tax rate overnight.

Re: G7: Rich nations back deal to tax multinationals

#535

Post by starkd » Sat, Jun 05, 2021, 5:51 PM UTC

phkahler wrote: post #500

orf wrote: post #2

Summary: > Firstly, the G7 want a global minimum tax rate so as to avoid a "race to the bottom" where countries can undercut each other with low tax rates. > Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits. Good. It’s a shame that Biden had to back down from the initial 28% because of do…

Similar could be achieved by taxing locally and also having import/export taxes. Other options exist too, but they're aiming for global control.

Agreed. You have to wonder how establishing a global minimum lessens or even removes the incentive to make local government more efficient. It may even establish an acceptable level of grift.

Re: G7: Rich nations back deal to tax multinationals

#536

Post by ptr2voidStar » Sat, Jun 05, 2021, 5:52 PM UTC

I'm fascinated that people actually believe this would make a material difference to the way all the paraphernalia surrounding taxes (e.g. legal, accounting, geopolitics etc.) are currently structured.

To quote Tancredi (from "The Leopard"):

"Everything must change for everything to remain the same”

Re: G7: Rich nations back deal to tax multinationals

#537

Post by JumpCrisscross » Sat, Jun 05, 2021, 5:53 PM UTC

mohanmcgeek wrote: post #466

Naga wrote: 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…

> Nobody is going to enforce these things

It doesn’t become effective until the G20, or at least G7, pass it. Part of the law would be automatic tariffs against non-participants. That leaves non-signatories with a choice between compliance and economic decimation.

Re: G7: Rich nations back deal to tax multinationals

#538

Post by dragonwriter » Sat, Jun 05, 2021, 5:54 PM UTC

rmah wrote: post #532

throwaway4good wrote: post #114

Earlier quoted context omitted.

Maybe they should do a sales tax then.

The UK already has an 18% GST rate, which is equivalent to an 18% tax on revenues. In 2020, Apple had revenues of $274B and pre-tax net income of $67B. On which, they paid $10B in income tax (a 15% rate). Apple revenues in the UK was about $2B. Which means Apple is already paying $360mil in GST tax to the UK gov. Apple also paid some amount of wage, income, real-estate and other taxes. Let's imagine companies had to…

> The UK already has an 18% GST rate, which is equivalent to an 18% tax on revenues.

No, GST is a VAT (in fact, the UK’s is called a VAT, not a GST), which is not the same as a revenue tax.

Re: G7: Rich nations back deal to tax multinationals

#539

Post by salawat » Sat, Jun 05, 2021, 5:54 PM UTC

ipaddr wrote: post #296

AmericanChopper wrote: post #120

Earlier quoted context omitted.

What you’re proposing is a tax on revenue, rather than a tax on profits. That is what a sales tax is.

If a tax on revenue was used the outcome would be companies would try to increase profits but reduce revenue so high margin products would be the goal which would mean higher prices / fewer sales. I think the solution should be market based. Whatever rate google US gets from google Ireland should be available to any company and google Ireland should be forced to sell any services/ip to any company who requests it at…

Congratulations, by forcing a company to sell to everyone indiscriminately, you've effectively seized their assets.

I don't really see the whole "let's unmake ownership and property rights" thing being feasible, but I've been wrong before.

Re: G7: Rich nations back deal to tax multinationals

#540

Post by rufus_foreman » Sat, Jun 05, 2021, 5:54 PM UTC

>> The G7 group of advanced economies has reached a "historic" deal to make multinational companies pay more tax

No, it hasn't. Some finance ministers met and talked:

"Finance ministers meeting in London agreed to battle tax avoidance by making companies pay more in the countries where they do business. They also agreed in principle to a global minimum corporate tax rate of 15% to avoid countries undercutting each other."

I have no idea how it works in other countries, but in the US, finance ministers don't have the power to agree to treaties. Treaties in the US require a super-majority (two thirds) vote in the Senate. Unless Mitch McConnell has signed off on this, the G7 group of advanced economies did not reach a deal on anything. I don't even see the word "Senate" in the entire article.

US Treasury Secretary Janet Yellen can tell reporters whatever she wants. Without buy-in from Republicans in the Senate, finance ministers agreeing "in principle" amounts to finance ministers agreeing that if they had ham, they could make ham and eggs, if they had eggs.