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U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

nytimes.com

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Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#71

Post by paul_f »

hellow0rldz wrote: post #30
Analemma_ wrote: post #24

Earlier quoted context omitted.

Read the proposal: it doesn't matter whether small countries agree to it. The idea is that if any country levies less tax than the global minimum, the IRS will automatically charge the difference. i.e. if the global minimum is 15% and a company based in Luxembourg is paying only 5%, the IRS will levy an additional tax burden to bring it up to the minimum. No coordination or cooperation is required.

The US can tax US corporations anyway it sees fit. What do other countries have to do with it? Read the subtitle: >The Biden administration wants other countries to back a minimum tax as part of its plan to raise the U.S. corporate tax rate to 28 percent from 21 percent. This makes no sense. Is the IRS a global institution now?

The US can tax the US company. The US will have a hard time taxing the Luxembourg subsidiary of the US company especially if the parent owns less than 100% of the subsidiary.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#72

Post by bpodgursky »

Retric wrote: post #52
prepend wrote: post #31

Earlier quoted context omitted.

I tried to call out the other way is to push the income to individuals so corporate profits are always near zero. So to apply energy on taxing individuals rather than corps. For corps income is so fluid, I think we get more revenue with tariffs, usage taxes, property tax, VAT, sales, etc. Profit isn’t as important to corporations as it is to individuals.

You’re assuming a 1:1 relationship between company country and stockholder’s country. That’s simply no longer even remotely true. So, in practice lowering US corporate taxes is a tax break on the Saudi royal family etc and a net increase in taxes for American citizens.

The US could tax dividends and cap gains for foreign shareholders, if it wanted.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#73

Post by disabled »

HWR_14 wrote: post #56
zionic wrote: post #32

Earlier quoted context omitted.

As a US taxpayer who sees the fraud, abuse, and general mismanagement of my tax money why would I willingly support the same government getting more? It is incredibly depressing how little I get from the government vs how much they take from me. The entire system is a sham and I honestly don't want to support it anymore. I'm working as hard as I can to try and escape it at the earliest possible moment.

There is some fraud and abuse, of course. And the huge numbers involved mean that even a small percentage of fraud is a huge number. But there never seems to be any statistics that back up the assertion that government (in general) or the US government (in particular) produces outrageous amount of fraud or abuse.

That is correct, and many of my family members are American accountants and/or CPAs. I suspect that this individual is mixing "fraud and abuse" for "things I don't like and/or agree with paying Uncle Sam [the US government taxman] for". But, that is just a part of life for just about everyone who pays taxes.

If the above individual wants to see widespread corruption, you may want to check out some European Union countries that have this culture. Croatia is a good example, where nepotism is the modus operandi, as in whom you know will get you places in society. Bulgaria is also a great example.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#74

Post by alpha42 »

hellow0rldz wrote: post #30
Analemma_ wrote: post #24

Earlier quoted context omitted.

Read the proposal: it doesn't matter whether small countries agree to it. The idea is that if any country levies less tax than the global minimum, the IRS will automatically charge the difference. i.e. if the global minimum is 15% and a company based in Luxembourg is paying only 5%, the IRS will levy an additional tax burden to bring it up to the minimum. No coordination or cooperation is required.

The US can tax US corporations anyway it sees fit. What do other countries have to do with it? Read the subtitle: >The Biden administration wants other countries to back a minimum tax as part of its plan to raise the U.S. corporate tax rate to 28 percent from 21 percent. This makes no sense. Is the IRS a global institution now?

> Is the IRS a global institution now?

In their own minds, they always have been.

I also find it funny that a country that can't even level-set taxation within it's own 50 territories wants to dictate taxation for the world now.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#75

Post by mgolawala »

0xB31B1B wrote: post #48

Pretty hype about this TBH. There is a long history of companies domiciling in say, Monaco, The Cayman Island, Panama etc to avoid taxes and regulations where they mainly operate. My understanding is that the current process in vogue for the mega cap companies is the "double irish dutch sandwich" https://www.investopedia.com/terms/d/double-irish-with-a-dut... No one, including tax lawyers, will tell you with a straig…

Does anyone know why this approach would be preferred over the use of VAT (Value added tax) instead of a corporate profit tax?

I recall a US presidential candidate in the most recent election cycle mentioning this as the solution to the current corporate tax avoidance problem. In fact it was a major part of his campaign.

I am not very knowledgeable of the downsides of a VAT approach and how it could be gamed, but what he seemed to say did make sense to me. The idea was to tax the value created in the location it was created. I suppose the way you could game that system was to somehow show that no (or very little) value was created in the US?

Would moving to taking a small percentage of revenue solve this? A federal sales tax that is included in the price of products that cannot be avoided. Sure the argument against this may be that they will just pass the increased costs down to the consumer, but why wouldn't the same would happen if the corporations start having to pay more taxes in general .. whether on their profits or on something else?

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#76

Post by djbebs »

dannyw wrote: post #34
prepend wrote: post #31

Earlier quoted context omitted.

I tried to call out the other way is to push the income to individuals so corporate profits are always near zero. So to apply energy on taxing individuals rather than corps. For corps income is so fluid, I think we get more revenue with tariffs, usage taxes, property tax, VAT, sales, etc. Profit isn’t as important to corporations as it is to individuals.

Wealthy individuals will just keep all their wealth in a company and accumulate forever. It's terrible for wealth inequality.

Punitive taxes and regulation is what heightens wealth inequality.

In any case I find that any appeals to decrease wealth inequality is ultimately no more than greedy appeals to take from the responsible and give to the irresponsible, so I've long since stopped seeing that as a legitimate argument.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#78

Post by jhedwards »

zionic wrote: post #32
adamsvystun wrote: post #15

While I have never looked deeply into the topic of big business corporate taxes, I do share a strong suspicion that the corporate tax system is flawed, and would be supportive of reform in the system. Including international cooperation for solving this. But the way they went about this is disappointing. There should be a way to solve this that would still allow countries to compete in attracting businesses. They tal…

As a US taxpayer who sees the fraud, abuse, and general mismanagement of my tax money why would I willingly support the same government getting more? It is incredibly depressing how little I get from the government vs how much they take from me. The entire system is a sham and I honestly don't want to support it anymore. I'm working as hard as I can to try and escape it at the earliest possible moment.

I'm surprised to hear this sentiment, but honestly I think there's a huge amount that the government does that is invisible to most citizens.

When I lived in China, I was shocked not by how controlled it was (which is what I expected given the western vision of China) but by how chaotic and uncontrolled it was compared to the US. Everything from food, health, and safety inspection, to the enforcement of traffic laws, the regulation of lenders and financial products, academic integrity, I could go on forever. I became aware of these things only when I lived in a place that lacked them.

Re: U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

#80

Post by jbverschoor »

0xB31B1B wrote: post #48

Pretty hype about this TBH. There is a long history of companies domiciling in say, Monaco, The Cayman Island, Panama etc to avoid taxes and regulations where they mainly operate. My understanding is that the current process in vogue for the mega cap companies is the "double irish dutch sandwich" https://www.investopedia.com/terms/d/double-irish-with-a-dut... No one, including tax lawyers, will tell you with a straig…

The thing is, why would T$ company want to pay 15% if it can also pay less than 2%?
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