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US blocks crackdown on tax avoidance by net firms like Google and Amazon

guardian.co.uk

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Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#71

Post by flyinRyan »

patrickaljord wrote: post #38
weavejester wrote: post #30

Earlier quoted context omitted.

The idea that private industry is always more efficient than the public sector is, at best, an over simplification. One need look no further than healthcare to find an example where the public sector is vastly more efficient than a market of competing, private sector companies. The state also spends money on things that would not be funded any other way. Pure-scientific research, such as CERN. Policing for people too…

Public health-care is a complete failure here in France. We actually pay more than Switzerland where it's privatize and the French assurance maladie is going completely bankrupt while being forced on us. Many pure scientific research have been done by private entities, I don't see why only public programs could do any pure scientific research. Plus, if the people were given their money back , maybe they could use it…

Why on earth do you live in France? It sounds like you don't believe in anything that makes France France.

And health care is most definitely more expensive in Switzerland than France. It's privatized but there are strict regulations on how much money insurance companies can make and all citizens are required by law to have insurance.

> Not for subsidizing movie producers

France makes great movies, but they could never compete against Hollywood financially. I for one am quite glad that France does what they need to to make sure good, original French movies (ok, not all of them, but much better than Hollywood) don't lose out to fast-food garbage the US is pumping out.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#72

Post by patrickaljord »

amirmc wrote: post #62
patrickaljord wrote: post #59

Earlier quoted context omitted.

> It doesn't matter whether a specific company uses tax havens or not. The only reasons there are tax havens is because there are tax hells.

No. Tax havens exist because people (and companies) want to hide assets . That's independent of the existence of any tax 'hell'. Unless you're of the opinion that all taxation is bad (an opinion I disagree with).

No, if taxation was low enough, the hasle of putting your money in a tax havens wouldn't be worth the time, money and trouble. Tax havens and the accountants needed to set them up are far from being free. If companies could spend the millions they spend on setting up these schemes on a low flat tax rate instead it would be worth it for them even if they ended up paying a bit more than by putting the money in a tax haven because of the time being saved and the good publicity + the positive effect that reasonable low taxes have on the economy.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#73

Post by Nursie »

patrickaljord wrote: post #72
amirmc wrote: post #62

Earlier quoted context omitted.

No. Tax havens exist because people (and companies) want to hide assets . That's independent of the existence of any tax 'hell'. Unless you're of the opinion that all taxation is bad (an opinion I disagree with).

No, if taxation was low enough, the hasle of putting your money in a tax havens wouldn't be worth the time, money and trouble. Tax havens and the accountants needed to set them up are far from being free. If companies could spend the millions they spend on setting up these schemes on a low flat tax rate instead it would be worth it for them even if they ended up paying a bit more than by putting the money in a tax ha…

>> No, if taxation was low enough, the hasle of putting your money in a tax havens wouldn't be worth the time, money and trouble.

You can't practically lower taxes enough to compete with tax havens.

In general they have low populations and the companies don't actually do any major activity there (there are few societal costs), so the country can survive and thrive with a very low percentage tax take from many effectively non-resident companies.

Contrast this with countries that have much larger populations. The number of profitable corporations per capita is going to be lower than a country that attracts corporations in simply on the basis of their low tax rate.

You'll notice where countries like Ireland are involved, that do have a population to support, they seem to eventually regret the tax haven arrangements they agreed to in the good times.

>> If companies could spend the millions they spend on setting up these schemes on a low flat tax rate instead it would be worth it for them even if they ended up paying a bit more than by putting the money in a tax haven because of the time being saved and the good publicity + the positive effect that reasonable low taxes have on the economy.

You can't really believe this?

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#74

Post by patrickaljord »

weavejester wrote: post #64
patrickaljord wrote: post #54

Earlier quoted context omitted.

> WHO ranks the French health care system as the best in the world, and the expenditure per capita is less than Switzerland (at least in 2007), so I'm not sure where you're getting your numbers from. http://www.securite-sociale.info/ http://reachfinancialindependence.com/french-healthcare/ FYI: it's forbidden by law to leave social security in France and to encourage others to do so. Best system ever indeed, once you…

Those sources don't appear to quote any hard numbers, and don't seem to dispute the WHO's methodology, but then again I can't read French :)

Sarkozy was elected in 2008 and he significantly lowered what national healthcare pays for you. You now need to pay for both a national healthcare and a private insurance to complete the cost. Problem is national healthcare is not a real insurance, what you pay is based on your salary, not your actual risk. So people with no risk end up paying much more than they would with a private insurance. My family in the Netherlands and Switzerland pay way less than I do.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#75

Post by amirmc »

patrickaljord wrote: post #72
amirmc wrote: post #62

Earlier quoted context omitted.

No. Tax havens exist because people (and companies) want to hide assets . That's independent of the existence of any tax 'hell'. Unless you're of the opinion that all taxation is bad (an opinion I disagree with).

No, if taxation was low enough, the hasle of putting your money in a tax havens wouldn't be worth the time, money and trouble. Tax havens and the accountants needed to set them up are far from being free. If companies could spend the millions they spend on setting up these schemes on a low flat tax rate instead it would be worth it for them even if they ended up paying a bit more than by putting the money in a tax ha…

You are making a lot of assumptions in your post. Have you questioned any of them? How much it costs to set up a system to avoid tax? How tax havens actually came about? How corporates actually use them? The information is out there and there's at least one good book on the subject (Treasure Islands by Nick Shaxon).

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#76

Post by weavejester »

patrickaljord wrote: post #74
weavejester wrote: post #64

Earlier quoted context omitted.

Those sources don't appear to quote any hard numbers, and don't seem to dispute the WHO's methodology, but then again I can't read French :)

Sarkozy was elected in 2008 and he significantly lowered what national healthcare pays for you. You now need to pay for both a national healthcare and a private insurance to complete the cost. Problem is national healthcare is not a real insurance, what you pay is based on your salary, not your actual risk. So people with no risk end up paying much more than they would with a private insurance. My family in the Nethe…

The WHO report is back from 2000, so it's certainly possible the rankings have changed since.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#77

Post by Silhouette »

danpat wrote: post #60
Silhouette wrote: post #46

Earlier quoted context omitted.

The moment you're trading in another country The difficulty is in defining what "trading in another country" actually means. If you sell a physical product, there are some unambiguous facts that can be considered: where was the product made, where did its components come from, where was it delivered, that kind of thing. If you're selling information, say an e-book or an MP3 download, things are slightly more ambiguou…

For the US, IRS publications 515 and 519 clarify all that stuff. The IRS wants to tax "US Source Income", there are various criteria that define it. For goods sold from overseas and shipped to the US, it call comes down to "where it is sold", which is at the discretion of the seller. It can be at the customers end if that's convenient for you (but it rarely is). I worked for a Canadian company that sold niche hardwar…

For the US, IRS publications 515 and 519 clarify all that stuff. The IRS wants to tax "US Source Income", there are various criteria that define it.

Are we back to talking about sales or other revenue-based tax here? The major dispute we were originally talking about in this HN discussion was to do with where profits are declared and corporation tax or the equivalent is paid; I only mentioned the sales/VAT angle as an example of how easily tax rules can get complicated when you have to decide where some intangible thing happened.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#78

Post by patrickaljord »

amirmc wrote: post #75
patrickaljord wrote: post #72

Earlier quoted context omitted.

No, if taxation was low enough, the hasle of putting your money in a tax havens wouldn't be worth the time, money and trouble. Tax havens and the accountants needed to set them up are far from being free. If companies could spend the millions they spend on setting up these schemes on a low flat tax rate instead it would be worth it for them even if they ended up paying a bit more than by putting the money in a tax ha…

You are making a lot of assumptions in your post. Have you questioned any of them? How much it costs to set up a system to avoid tax? How tax havens actually came about? How corporates actually use them? The information is out there and there's at least one good book on the subject (Treasure Islands by Nick Shaxon).

Yes, Google has to pay an army of both lawyers and accountants to take care of all the crazy complex tax scheme internationally. I know several people who run startups with such schemes and they give 1% of their revenue to their accountant. If we got rid of the IRS and equivalent and just used a flat tax on the total amount of revenue, well, let's say the CPA industry would take a plunge and regular folks and companies like Google would save billions.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#79

Post by foobarbazqux »

rorrr2 wrote: post #23
foobarbazqux wrote: post #11

Earlier quoted context omitted.

It's not dual taxation. The IRS deducts the foreign tax paid. So if the foreign country has a higher tax rate, you will never pay US tax. I'm not saying it's a great policy, but it isn't as bad as it sounds. You can always renounce your US citizenship - think of it as a maintenance fee. Yes, draconian.

That's not true. In Switzerland there's a two year line of people waiting to renounce their US citizenships, because they get double taxed.

> There is a treaty between the United States and Switzerland to avoid double taxation on income, which means that taxes paid to Switzerland by a resident of this country must not necessarily be paid to the United States. In general, an American employed in Switzerland can expect to pay at least as much tax to the various Swiss government levels as he would have to if he were paying tax in the United States.

http://bern.usembassy.gov/general_information.html

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#80

Post by foobarbazqux »

flyinRyan wrote: post #66
foobarbazqux wrote: post #11

Earlier quoted context omitted.

It's not dual taxation. The IRS deducts the foreign tax paid. So if the foreign country has a higher tax rate, you will never pay US tax. I'm not saying it's a great policy, but it isn't as bad as it sounds. You can always renounce your US citizenship - think of it as a maintenance fee. Yes, draconian.

>So if the foreign country has a higher tax rate, you will never pay US tax. If I live and work completely in a foreign country why would I ever pay US income tax under any circumstances at all? The US is one of two countries on this planet that expect people who's only tie is being a citizen (perhaps never having set foot there and not speaking the language) to file income tax and potentially pay a portion of their…

Yeah, I was only challenging the dual taxation claim. I agree that the rest is draconian.

Out of curiosity, what is the other country?

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