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Czech Republic proposes the highest digital tax rate in Europe

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Re: Czech Republic proposes the highest digital tax rate in Europe

#81

Post by ShorsHammer »

evanriley wrote: post #61
point78 wrote: post #58

Earlier quoted context omitted.

As opposed to the billions tech giants dodge taxes

Surely there is a balance between overly taxing and letting them get away without paying them?

Consumption taxes are very difficult to avoid and often very efficient. Especially online.

Income and corporate taxes are so easily manipulated that there's entire industries built around it. Nations should be aiming for efficient taxation sources not ever more complex regulations creating yet another industry sector to simply navigate it.

Re: Czech Republic proposes the highest digital tax rate in Europe

#82

Post by mc32 »

microcolonel wrote: post #77
mc32 wrote: post #54

Earlier quoted context omitted.

So if AB&B are reducing the supply of housing to locals who don’t own, then this tax could be used to build or subsidize housing costs for those who because of the reduced inventory and commensurate price increase can’t afford the housing they were once able to.

AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly normally (AirBnB or no). The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as…

I think that’s two sides of the same coin. If someone’s rent budget meant they had in theory access to say 10% of the units for rent, but AB&B’s additional demand means now their budget only puts 5% of the units available within their range, that effectively reduces their supply (or in other words access).

Re: Czech Republic proposes the highest digital tax rate in Europe

#83

Post by adventured »

muckrakerz wrote: post #33

Once again the former eastern block is implementing smart reforms that are pro-market and anti-globalist.

They're in fact assisting in the beginning of an economic war between the US and the EU. These taxes, intentionally and specifically targeting critical US companies, are de facto tariffs. The US will have no choice but to respond in kind.

There's no scenario where Germany doesn't get its export machine hammered with tariffs if the EU broadly goes too far with this. It will drag the EU economy below water into a perma recession (which it has almost been in already since 2007, all the major economies of Europe have seen near zero net GDP expansion for over a decade). Europe is extraordinarily weak, with Brexit and France, as well as the continued residual mess in Spain, Italy, Greece and Portugal from the great recession. Germany is the only thing propping up the EU economic house of cards. And that's what the US will target to break the back of the EU. If I were the US, I'd start with finishing off the collapse of Deutsche Bank (down to a $16b market cap now) and move to decimate their auto industry (conspire with China as it makes sense, we can carve the world in half between superpowers; they'd love to take the place of some of Germany's advanced industry and move up the ladder of development further). Once it's war, it's war. Or you know, the EU could be smart, turn back and stop the targeted assault on the US economy.

If it gets really feisty, just look the other way, Russia will begin rebuilding its empire by consuming parts of Eastern Europe (which it's always desperate to do). That will destabilize an already weakened EU. These countries are either allies of the US, or not. If they are, they will stop attacking the US economy. If they're not, I don't see why the US should be protecting them from Russia with its military power. And there's absolutely nothing the EU can do to stop Russia from taking what it wants in Eastern Europe.

Re: Czech Republic proposes the highest digital tax rate in Europe

#85

Post by rvp-x »

bduerst wrote: post #59
muckrakerz wrote: post #33

Once again the former eastern block is implementing smart reforms that are pro-market and anti-globalist.

How is increased taxation pro-market?

At least for my own country, if you buy advertising from Google, you pay 0% VAT because it's not a local purchase. With a local company there's 18% VAT. The local companies are starting the competition at a huge disadvantage.

An even playing field is a healthier market, without megacorps that can run at a loss for decades to crush out any chance competition in a field.

Re: Czech Republic proposes the highest digital tax rate in Europe

#86

Post by microcolonel »

mc32 wrote: post #82
microcolonel wrote: post #77

Earlier quoted context omitted.

AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly normally (AirBnB or no). The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as…

I think that’s two sides of the same coin. If someone’s rent budget meant they had in theory access to say 10% of the units for rent, but AB&B’s additional demand means now their budget only puts 5% of the units available within their range, that effectively reduces their supply (or in other words access).

> that effectively reduces their supply

No, importantly, it does not reduce the supply. If you want to apply terms like this, pay attention to how they are defined.

Access is not supply, and supply is not access.

There is an immense supply of housing in Vancouver, and as much as is possible, AirBnB-facilitated demand (although it's really a tiny fraction of the total demand) puts pressure on the market to increase supply (even if the circumstances make that unlikely to succeed greatly). Whether people living in Vancouver are buying their housing through rental agreements, purchases, or short term rentals like AirBnB, the supply will only tend to increase (just not enough that some of it is "cheap").

For an example of high supply with poor access, just look at the tremendous number of low-quality developments across China with few or no legitimate residents.

Re: Czech Republic proposes the highest digital tax rate in Europe

#87

Post by joejerryronnie »

adventured wrote: post #83
muckrakerz wrote: post #33

Once again the former eastern block is implementing smart reforms that are pro-market and anti-globalist.

They're in fact assisting in the beginning of an economic war between the US and the EU. These taxes, intentionally and specifically targeting critical US companies, are de facto tariffs. The US will have no choice but to respond in kind. There's no scenario where Germany doesn't get its export machine hammered with tariffs if the EU broadly goes too far with this. It will drag the EU economy below water into a perma…

It’s only a matter of time until the EU implodes. And poking the bear like this will only hasten the inevitable.

Re: Czech Republic proposes the highest digital tax rate in Europe

#88

Post by Carpetsmoker »

bartimus wrote: post #57

We can do this in Europe because we are great at killing innovation through our taxes and regulations. This way we can safely tax innovative tech giants without hurting our own tech giants. Because they don't exist here. We don't like that thing that you do. So we'll just apply taxes and let you continue doing the thing we don't like you to do.

You say that like "tech giants" are a good thing. The biggest difference doesn't seem to be taxes, but a predatory attitude focused only on their own growth and "to hell with everyone else".

"Tech giants" of the past and present like IBM, AT&T, Microsoft, Facebook, Oracle, Uber, and Amazon are all widely disliked and criticized.

Aside from that there are plenty of European tech companies (ASML, Logitech, Skype, Spotify, just to name a few) the attitudes in Europe tend to be different. Attend one of the Silicon Valley conferences where it's all "we're going to change world!" vs. the German CCC where it's "we're not sure if society as a whole benefits from this technology".

There are probably other reasons too. Silicon valley and that Chinese city I forgot the name of are powerful "tech hubs" where workers, innovators, and investors meet. Europe lacks such a powerful "hub". I suspect the most important reason for this is that "Europe" isn't a single country but dozens of countries. Even in the EU – where you can legally move to another country at a whim – it's not so easy, as you may not speak the language.

This is why the UK probably has more EU immigrants than many other countries, since most people speak some English.

And sure, perhaps taxes can be a factor? I'm unsure of it, and I've never seen it proven, but I am willing to be convinced. Either way, it's certainly a lot more complex than "taxes kill innovation".

Re: Czech Republic proposes the highest digital tax rate in Europe

#89

Post by 3xblah »

bartimus wrote: post #57

We can do this in Europe because we are great at killing innovation through our taxes and regulations. This way we can safely tax innovative tech giants without hurting our own tech giants. Because they don't exist here. We don't like that thing that you do. So we'll just apply taxes and let you continue doing the thing we don't like you to do.

The parent comment suggests European countries are killing "innovation" through taxes and regulation.

This sounds like a bad idea, so I had a look at the article to see what "innovation" was being taxed.

Innovation is a "new idea, creative thoughts, new imaginations in form of device or method". (source: merriam-webster.com)

Plugging in our definition of innovation, the question becomes:

What is the new idea, creative thoughts, new imaghinations in form of device or method that trigger this new tax in Europe?

First the article says the UK gov't wants to tax "companies whose business model requires the active participation of U.K. users in creating content, being targeted with advertising or linked by intermediary platforms."

Is collecting user content and serving ads "innovation"? That is what triggers the tax.

What if we just collected user content, maybe charged a fee? No ads. Do we get taxed?

Second, it says the Czech gov't wants to tax companies with "advertising and personal data sales as the primary base" as well as "sharing economy platforms". The article says the tax "prioritizes targeted ads".

Is selling advertising and personal data "innovation"?

What if some Czech programmer make an Uber or AirBnB style app but do not sell advertising or data? Do they get taxed?

Third, it says the French gov't wants to tax "platforms that put users in touch with each other for a fee".

Is putting users in touch with each other for a fee "innovation"? Does that make ad-supported companies that do this exempt?

What if a company sells native software that puts users in touch with other, peer-to-peer. Is that a "platform"? If not, do they get taxed?

What is their definition of "platform"? Under the Wikipedia definition, the internet itself is a "platform".

As always, the devil is in the details. We need to see the text of these tax laws.

Finally, the article discusses the merits of the "[t]axing advertising that is based on personal data".

Is advertising based on personal data "innovation"? What loss would we, the majority, suffer if this particular innovation were taxed?

Is it possible to have "innovation" that does not involve advertising based on personal data? Of course. That is the kind of innovation I prefer. I am using some to write this comment.

We will not lose the benefits of personal computer-based innovations simply because we take away the financial incentive to collect personal data and serve ads. That is not the raison d'etre for the type of innovation we seek to encourage. It is the advances in hardware and networking.

Re: Czech Republic proposes the highest digital tax rate in Europe

#90

Post by jankotek »

bartimus wrote: post #57

We can do this in Europe because we are great at killing innovation through our taxes and regulations. This way we can safely tax innovative tech giants without hurting our own tech giants. Because they don't exist here. We don't like that thing that you do. So we'll just apply taxes and let you continue doing the thing we don't like you to do.

Czechia is one of a few countries with local competitors to Google and other tech giants. Why should we care about Google? Seznam actually pays taxes here.
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