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Tax System in the Faroe Islands

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Re: Tax System in the Faroe Islands

#61

Post by tokai »

expazl wrote: post #60

> THE FAROES ARE ONE OF THE RICHEST COUNTRIES in the world by per capita GDP—even slightly richer than Denmark itself. The Faroe Islands are a strange place. There aren't many people, yet you'll see huge infrastructure projects to literally drill tunnels through mountains to connect at 2-3 families with the main roads. A gigantic amount of public money gets pumped into every part of their industry and infrastructure,…

I think I read that they are planning to start lowering the financial support from Denmark this year. But only by a small bit. With no concrete plan of weaning fully of it. So the end of the union still is far off it seems. As long as Greenland wants support they should get it, as they really need it, but the Faroe Islands should have been on-track for independence a long time ago imo.

Re: Tax System in the Faroe Islands

#62

Post by LatteLazy »

gpderetta wrote: post #55
LatteLazy wrote: post #24

Earlier quoted context omitted.

In the UK, less than 10% of the population even file a tax return. For 90% of people tax is just taken at source. Unless you have a small business, rent out properties or work abroad, HMRC already knows what you needed to pay and get's it right 99% of the time and your employer/pension provider just withholds as required. It's always baffled me that so many rich countries don't operate like this...

I do my own taxes on the UK, it is not complicated, but it would be everything a billion time easier if all brokerage accounts [1]and banks had a simple way to get all transactions in a tax year in a single csv file instead if having to do a billion clicks and having to parse dozens of pdf files! Also can I have everything in a single unified gui? [1] especially those barebone accounts used for employee stock grants.

That would be perfect. It would be so much better if they just sent you a form with a few numbers on. And the maths and format were the same irrespective of the firm. One from each of your brokers, add the numbers together, put onto tax return, submit and sleep soundly.

Re: Tax System in the Faroe Islands

#63

Post by digvalley »

Well,

1. the tax rate is high (50%)

2. resources (fish) is widely corrupt and just a few billioners reap the benefits (proportionally)

3. there are loopholes. Shippers who work for a faroe islands company, work abroad, has their residence in an other country pay 0% tax (something like that)

4. the tax code has not much less complexity than say norway.

Re: Tax System in the Faroe Islands

#64

Post by tokai »

metacritic12 wrote: post #5
theonlybutlet wrote: post #4

It's completely irrational but any mention of this place is tainted by their dolphin hunts. How about learn about their taxes and they learn about PR.

The article has a good point from a few Faroese guys about how the mass inhumane US harvesting of beef, chicken, and pigs, is probably very similar in aggregate. But when the food item is something Americans culturally eat, it becomes difficult for animal rights activists to push on because they get labeled as crazy immediately. Whereas food items Americans are not used to eating like whale or snake gets a round of a…

Its a bad comparison. Breeding or harvesting an animal is not the same. They provide different suffering for the animals and different pressures on different biotopes. Its very much like the old soviet whataboutism when pressured on their domestic suppression: "well in the US they lynch people". Meat production in US might be bad, but its not a defense for overfishing the Atlantic.

Re: Tax System in the Faroe Islands

#65

Post by dan-robertson »

BariumBlue wrote: post #8
nsteel wrote: post #6

They could send that journalist to almost any country and experience a better tax system than the US. Although it sounds like a nice trip and he got some hikes in. > Filing taxes takes up an estimated 6.5 billion hours each year—as the right-leaning Tax Foundation points out, the equivalent of 3.1 million people working full-time for the whole year. It's just a staggering level of waste. But hey, keep shuffling stuff…

Turbo tax and H&R Block, companies that produce software for filling taxes, lobby to keep taxes complex and non-easy (unless you pay for their software)

I read theory a lot and I can see it as an argument that the filing process for Americans with reasonably simple situations are painful and difficult (ie that there’s no government website[1] to file for free, or that the IRS can’t fill in details for you). But I would think tax companies are not hugely important in the grand scheme of things and that the actual reason that tax is so complicated is more broad, eg:

- many layers of taxation due to the political structure of the US – federal, state, city, county, maybe also school/water board?

- lots of different deductions exist, and probably for any deduction there are politicians who want it to stay. Each individual deduction may be well meaning (or the result of fraught negotiations) but the whole is undesirably complicated and hard to fix. The rich also have an advantage in a more complicated system but AMT was created so presumably this advantage has limits.

While the first point seems to somewhat naturally fall out of the US political system, I don’t have a great explanation for why the second should apply in the US but not other countries? E.g the U.K. tax system has a few special cases (something to do with child care, some married couples things, some ability for farmers to carry losses forward, maybe some special rules for reverends or Lloyds underwriters?) but nowhere near as many as the US. I think both tax systems are quite old but maybe some U.K. government in the 20th century decided to simplify it a bunch? Certainly a bunch of old taxes like rates don’t really exist for individuals anymore.

[1] presumably the US government have been terrified of launching big websites since healthcare.gov too.

Re: Tax System in the Faroe Islands

#66

Post by notahacker »

expazl wrote: post #60

> THE FAROES ARE ONE OF THE RICHEST COUNTRIES in the world by per capita GDP—even slightly richer than Denmark itself. The Faroe Islands are a strange place. There aren't many people, yet you'll see huge infrastructure projects to literally drill tunnels through mountains to connect at 2-3 families with the main roads. A gigantic amount of public money gets pumped into every part of their industry and infrastructure,…

I think the Faroes being a country with high levels of evenly-distributed wealth and a profitable but not-very-diverse business sector is why they get the luxury of having a simple tax system with limited pressure to add deductions (that and taxes not actually needing to be high enough to cover government spending). Certainly the wealth is more a cause of the tax simplicity than the other way round.

Back of the math envelope suggests the overheads of running their system aren't that low either (the 70m krone budget serves a population of just 54000 people). The IRS budget is closer to $14bn a year, but it serves around 330m people, and nobody accuses the US of being a model of efficiency.

Re: Tax System in the Faroe Islands

#67

Post by analog31 »

sokoloff wrote: post #11

Taxing businesses on gross revenues (what “no deductions” means) is a huge bias in favor of vertical integration and large conglomerates. If I’m a small company and participate in a chain of 8 companies providing a good or service, there is a large multiple of tax paid on that good as compared to a competitor who manages to do all 8 things in a single company. (This is why VAT taxation works better and is more common…

I wonder if the article perpetuates the confusion about "deductions." I run a small business and use Schedule C on my tax return. Basically, Schedule C has you write down your revenues, and subtract your costs. The difference is what ends up in the income section of your main form. "Deductions" come later in the form.

Re: Tax System in the Faroe Islands

#68

Post by kevin_thibedeau »

notahacker wrote: post #66
expazl wrote: post #60

> THE FAROES ARE ONE OF THE RICHEST COUNTRIES in the world by per capita GDP—even slightly richer than Denmark itself. The Faroe Islands are a strange place. There aren't many people, yet you'll see huge infrastructure projects to literally drill tunnels through mountains to connect at 2-3 families with the main roads. A gigantic amount of public money gets pumped into every part of their industry and infrastructure,…

I think the Faroes being a country with high levels of evenly-distributed wealth and a profitable but not-very-diverse business sector is why they get the luxury of having a simple tax system with limited pressure to add deductions (that and taxes not actually needing to be high enough to cover government spending). Certainly the wealth is more a cause of the tax simplicity than the other way round. Back of the math…

They're subsidized by Denmark. They wouldn't be able to support their infrastructure projects without outside money.

Re: Tax System in the Faroe Islands

#69

Post by imtringued »

dogma1138 wrote: post #51
dxs wrote: post #44

For several years now I've been wondering about a couple of things. One would be to come up with a simple taxation formula for individual income. (1) No deductions. (2) Peg the tax rate to a formula, something like tax = 1% per $10,000 of income. (These specific numbers would not work very well.) This would be simple, absolutely predictable, and would set a maximum income at whatever the culture decided was right. An…

That sounds like a dystopian nightmare that is incompatible with private ownership of anything.

Why is that a more dystopian nightmare than rich people owning all the private property and leaving nothing for you?

Re: Tax System in the Faroe Islands

#70

Post by silvestrov »

dxs wrote: post #44

For several years now I've been wondering about a couple of things. One would be to come up with a simple taxation formula for individual income. (1) No deductions. (2) Peg the tax rate to a formula, something like tax = 1% per $10,000 of income. (These specific numbers would not work very well.) This would be simple, absolutely predictable, and would set a maximum income at whatever the culture decided was right. An…

> Peg the tax rate to a formula

Never going to fly as most of the population does not understand math and will think you are cheating them.

Many can't even understand progressive taxation.

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