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40% of multinational profits are shifted to tax havens each year

missingprofits.world

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Re: 40% of multinational profits are shifted to tax havens each year

#71

Post by mcv »

aembleton wrote: post #51
Nasrudith wrote: post #36

Earlier quoted context omitted.

The problem with that is the expenses are already arbitrary with international businesses. It is Hollywood accounting of making movies "never turn a profit" writ large and arguably more honest. If say Amazon UK "rents" their branding, storefront, and similiar from Amazon US the value. Essentially unfixed value goods + deductions = massive loophole. Unfixed fuzzy values are also very valuable to money launderers. It i…

That's why I think corporation tax should be applied to UK Sales - UK Costs. - Buy in the branding from the US? That can't be deducted. - Import from China? Can't be deducted. - Employ more people. Deductible - Buy more from UK suppliers. Deductible. Now go on and export more with that. Those export sales won't affect your tax.

> "Now go on and export more with that. Those export sales won't affect your tax."

Not in the UK, but of course they will be taxable in the country you're exporting to. Assuming that country uses similar tax rules.

Re: 40% of multinational profits are shifted to tax havens each year

#72

Post by mcv »

danaris wrote: post #64
aembleton wrote: post #51

Earlier quoted context omitted.

That's why I think corporation tax should be applied to UK Sales - UK Costs. - Buy in the branding from the US? That can't be deducted. - Import from China? Can't be deducted. - Employ more people. Deductible - Buy more from UK suppliers. Deductible. Now go on and export more with that. Those export sales won't affect your tax.

Unfortunately, that would make some entire categories of business non-viable. Any business that relies on importing raw materials would be hit with punishing taxes—unless their margins were huge, or their local & labour costs were orders of magnitude higher than their import raw material costs, they would likely not be able to operate. Effectively, you would be taxing them on revenue, rather than profit.

They wouldn't get to deduct the costs of importing those raw materials, but they would get to deduct the costs (labour, probably) of refining them and making something out of those raw materials. And if they sell back to the country they imported raw materials from, they get to deduct the raw material costs from those profits (assuming that country uses a similar scheme).

But you're right, for a company that makes their revenue in a different country than where they make their costs, it's effectively a tax on revenue. So it would encourage countries to make their costs in the same countries where they sell. It might stop companies from moving all their jobs to low-wage countries.

I admit raw materials would be an issue; those are not equally available everywhere. But at the same time, it would effect every company in that industry equally, so I don't think the end result would be that much of a problem. I guess it'd discourage extracting raw materials from poor countries. Would that reduce their exploitation by western companies, or would that deny them the exports they need to grow their economy? I don't really know.

Re: 40% of multinational profits are shifted to tax havens each year

#73

Post by snsr »

appleiigs wrote: post #66
SolaceQuantum wrote: post #10

Earlier quoted context omitted.

Honestly, I'm down for paying taxes. It pays for my lifestyle and is propostional to my lifestyle. If I own land, that land is only valuable due to the society that land exists in. It's protected, and safe, due to public services like roads, which law enforcement, fire control folks, postal service, and ambulances drive upon. I've earned my income from a lifetime of education, starting from my public school kindergar…

A consumption tax (a tax on sales) is proportional to your lifestyle. If someone chooses to buy a gas guzzler v8, they should pay taxes on the gallons they burn to pay for roads and emissions. Consumption tax is also easier to be set to a geographic location, and harder to shift to different tax jurisdiction. Harder to play games in comparison to an income tax. But nobody wants it. Very unpopular in a vote because, p…

Consumption taxes are regressive, serving to further exacerbate income inequality.

Re: 40% of multinational profits are shifted to tax havens each year

#74

Post by chrisdhoover »

jfim wrote: post #32
mcv wrote: post #21

Earlier quoted context omitted.

I think paying taxes to the society you're profiting from is entirely reasonable. The problem is that corporations are free to profit in one country but declare those profits in another country. Corporations can do that but people can't. (What's even worse, US citizens (US "persons" even, you don't have to be a citizen for this) that live and work abroad and have nothing to do with the US, still have to pay their tax…

Another big issue with US taxes is that tax dollars aren't well spent. I'd be happy to pay the amount of taxes I'm currently paying in California if tax dollars were used well, but as it stands the public schools are underfunded, the highways are full of litter on the side, higher education isn't free, healthcare isn't universal, social security is underfunded, public transportation is dysfunctional, and so on.

California has high pension obligations that will only make the problem worse. The pension recipients refuse to discuss the matter. They wont even let grandfathered changes. Fees and taxes will continue to increase and services will be cut to pay pensions.

Re: 40% of multinational profits are shifted to tax havens each year

#75

Post by buboard »

the exact next line is rather underwhelming:

> This shifting reduces corporate income tax revenue by nearly $200 billion, or 10% of global corporate tax receipts.

Companies sometimes have to shift profits through tax heavens because many 'proper' countries are too bureaucratic when it comes to things like IP or international profits handling. "Multinational" no longer means that it's a megacorp - we live in a connected globe. Perhaps we should talk about why tax compliance is such a big burden for mid-size businesses.

Seems Germany is losing more than everyone

Re: 40% of multinational profits are shifted to tax havens each year

#77

Post by khyryk »

appleiigs wrote: post #66
SolaceQuantum wrote: post #10

Earlier quoted context omitted.

Honestly, I'm down for paying taxes. It pays for my lifestyle and is propostional to my lifestyle. If I own land, that land is only valuable due to the society that land exists in. It's protected, and safe, due to public services like roads, which law enforcement, fire control folks, postal service, and ambulances drive upon. I've earned my income from a lifetime of education, starting from my public school kindergar…

A consumption tax (a tax on sales) is proportional to your lifestyle. If someone chooses to buy a gas guzzler v8, they should pay taxes on the gallons they burn to pay for roads and emissions. Consumption tax is also easier to be set to a geographic location, and harder to shift to different tax jurisdiction. Harder to play games in comparison to an income tax. But nobody wants it. Very unpopular in a vote because, p…

Rich people rarely buy stuff in proportion to their greater income (earning 100x more but not buying cars worth 100x more, etc). This would mainly affect the not-so-rich people, who, given fixed purchase budgets, would probably respond by consuming less, which is likely to hurt businesses with lower demand for just about any product.

Re: 40% of multinational profits are shifted to tax havens each year

#78

Post by buboard »

cs702 wrote: post #9

Wow. Power , in all its forms -- economic, cultural, social, political -- is highly concentrated among impersonal giant corporations today. For this kind of legal tax avoidance would be impossible without mutual understanding, collaboration, and coordination across national boundaries among many disparate groups of people, all serving their corporate masters in one way or another (as their employers, as their custome…

The corp. tax loss is 10%

Its becoming clearer that the world is shifting towards coordinated world-wide tax rates, similar to how central banks are coordinated. Modern trade is complex and almost always multinational. Clear and easy tax rates will actually allow anyone to enjoy fair taxation, instead of the current unequal situation in which megacorps can use complex schemes to drastically reduce their rates, while normal businesses can't.

Incidentally , the most unequal territory in terms of shifted profits is Europe. An EU-wide corporate tax of 20-25% would be good for business

Re: 40% of multinational profits are shifted to tax havens each year

#79

Post by mcv »

bluecalm wrote: post #39
mcv wrote: post #21

Earlier quoted context omitted.

I think paying taxes to the society you're profiting from is entirely reasonable. The problem is that corporations are free to profit in one country but declare those profits in another country. Corporations can do that but people can't. (What's even worse, US citizens (US "persons" even, you don't have to be a citizen for this) that live and work abroad and have nothing to do with the US, still have to pay their tax…

Please don't confuse income taxes with taxes on profit. Income tax is like a tax on revenue - you pay it where you get it, you can't deduct costs. You can tax corporations on revenue or you could tax consumption (by VAT or sells tax) and that wouldn't be evaded either. The problem is with taxing profits and elusive concept of "profits in specific market". The concept doesn't really makes much sense though. It also is…

> "It's really is not your business how much I spend in my country to produce goods I sell in yours."

That's exactly my point: you tax the economic activity only in your country: the revenue minus the profits in your country. What the company does in a different country is irrelevant to this.

Note: this is my tax proposal. Not how I claim things currently work, but what I think they should be changed to.

Although on a different level, I think what happens across borders absolutely does matter: I think countries should not import products created through slavery, child labour or other forms of oppression. Companies and countries should take more responsibility for the entire supply chain and not just the bits inside their own border.

Re: 40% of multinational profits are shifted to tax havens each year

#80

Post by mcv »

mywittyname wrote: post #46
jfim wrote: post #32

Earlier quoted context omitted.

Another big issue with US taxes is that tax dollars aren't well spent. I'd be happy to pay the amount of taxes I'm currently paying in California if tax dollars were used well, but as it stands the public schools are underfunded, the highways are full of litter on the side, higher education isn't free, healthcare isn't universal, social security is underfunded, public transportation is dysfunctional, and so on.

When it comes to international corporate interest, American tax dollars are extremely well spent. The US State Department, Military, and to a degree, Intelligence Agencies do everything they can to compel favorable treatment for large American companies from every other country. I guess it's possible that large companies have outgrown the need for US Government support internationally and figure its cheaper and more…

> "When it comes to international corporate interest, American tax dollars are extremely well spent."

That just makes it worse: people pay taxes but don't get value for their money, while corporations pay no taxes but get lots of value for other people's money.

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