Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Global minimum corporate tax: 130 nations to support U.S. proposal

cnbc.com

Post reply on HN
Print view View original

61–70 of 362 posts

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#61

Post by axlee »

motohagiography wrote: post #51
colechristensen wrote: post #41

Earlier quoted context omitted.

I don't think the New World Order conspiracy theorists were particularly paranoid about closing corporate tax haven loopholes.

I thought their whole schtick was "one world government," which is precisely what colluding to destroy tax competition is, as is banning capital flight which results from abusive policy.

colluding: to act together secretly or illegally in order to deceive or cheat someone.

And please: capital flight being the results of abusive policy? Corporations and wealthy individuals will always try to avoid giving the fair share to the society that enabled their wealth in the first place: the case where wealth moves because of abusive policies is so marginal in the ocean of pure greed. Some countries are fiscal parasites and benefit from the theft of other societies, and this is how we deal with parasites. Should we just watch wealth evaporate away to offshore stashes, wealth that actually belongs to the people?

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#62

Post by bradford »

jbaudanza wrote: post #26

Imposing taxes on a legal entity always seemed fishy to me. Politically, it sounds great to say, "Make the corporations pay their share!", but who exactly are we targeting with these taxes? Is it the rich executives? Why not just raise taxes on the rich directly? I suspect in most cases the tax burden is just shifted onto the lower-income workers or the customers somehow.

> it sounds great to say, "Make the corporations pay their share!"

the Global minimum tax rate is only tangentially related to the 'make corporations pay their share' problem. The real problem is a 'race to the bottom' where corporations will shop around and put tax headquarters in the country with the smallest tax rate (i.e., Ireland).

> I suspect in most cases the tax burden is just shifted

The big question for me is: is it really a significant tax burden? or do the companies choose nations with the lowest tax rate because they are seeking a competitive advantage, and thereby inducing all their competitors to make a similiar choice?

the minimum tax rate is trying to level the playing field in this regard.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#63

Post by jhrmnn »

disposekinetics wrote: post #55
cinntaile wrote: post #43

Earlier quoted context omitted.

While it may be a cowardly way to divert responsibility I don't agree that this is so bad. This problem can only be solved by cooperating, otherwise companies can just shop around for the cheapest taxation rate.

But isn't it good that companies shop around for the cheapest tax rate?

In what sense is it good that a company can make profit through a business activity in some country, but instead of paying the tax there, it pays it somewhere else?

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#64

Post by jacobr1 »

LatteLazy wrote: post #3

Does anyone know at what point the tax is paid? I ask because publicly traded companies avoid it by doing share buy backs. So Apple technically makes no profit. 1% or 15% or 100% of technically nothing is nothing... >The deal also reportedly includes a framework to eliminate digital services taxes, which targeted the biggest American tech companies. Quid Pro quo Clarice!

The classic offshore approach is that Apple USA doesn't make any profit because they find a way to make the accounting work such that Apple Ireland actually made the profit. It only becomes income or dividends when it gets transferred back to the USA.

An example might be to assign the patent ownership for the new M1 chips to the Ireland subsidiary. Sell them for $1. Then charge the USA based firm $1 billion in licensing costs. Make $1 billion in income selling the chips. Boom $0 profit. Except now there is massive profit in the Ireland subsidiary, which can pay very low taxes. The problem is that the money is stuck there. If they give it back the parent company as a dividend, then that is income to the parent.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#66

Post by rio_de_mierda »

newsclues wrote: post #38
natvert wrote: post #29

When the benefits of creating a new country outweigh the costs (to shareholders), does it fall within the fiduciary duty of corporate leaders to form a new country?

Why would a corporation want a country? If you don’t control the planet you’re just waiting for your competitors to crush you.

Corporate motives can usually be reduced to one of three things: cheap (ideally free/forced) labor, cheap resources, and limits on liability.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#67

Post by rebelos »

colechristensen wrote: post #47
ppeetteerr wrote: post #32

The complexity of this agreement and its execution are incredible. Not only getting alignment from 130 members, but a system by which companies report their revenue _and the cost of the revenue_ for every country! Future tax avoidance schemes will most likely try to "divert" their costs towards high-revenue countries like the US. After all, what is the profit margin of an iPhone sold in Romania? For some context, cor…

How much revenue is "missing" due to tax magic?

A lot. Changes in policy cut the effective corporate tax rate down from ~40% around 1950 to where it is today. Lyn Alden covered this in an excellent post: https://www.lynalden.com/tax-shift/.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#69

Post by jacobr1 »

Retric wrote: post #21
brobinson wrote: post #11

Earlier quoted context omitted.

Restaurants and other low margin businesses would cease to exist under this plan.

That’s a common misunderstanding, restaurants are low margin due to competition. As long as the industry moves in lockstep with cost increases the margins stay the same. Sales taxes for example vary widely yet have minimal impact on low margin business. Lower them and customers save money but restaurants margins stay the same.

For the same reason though, complementary goods don't necessarily have the same tax burden or margins. So the distribution of purchases might shift. Restaurant-goers might just eat at home more, or maybe even just go out to more expensive places that can operate with lower margins.

Re: Global minimum corporate tax: 130 nations to support U.S. proposal

#70

Post by disposekinetics »

jhrmnn wrote: post #63
disposekinetics wrote: post #55

Earlier quoted context omitted.

But isn't it good that companies shop around for the cheapest tax rate?

In what sense is it good that a company can make profit through a business activity in some country, but instead of paying the tax there, it pays it somewhere else?

It minimizes the amount of taxes paid overall, which weakens the state.
Post reply on HN