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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

#81

Post by paul_f »

germinalphrase wrote: post #19
hellow0rldz wrote: post #13

Thank God the US is taking charge of the GLOBAL finances. What could go wrong!? This is ladder pulling. Who needs smaller countries competing on fiscal rates when all tech should be registered in Dellaware? Note how it's a small 15% to start with. If this goes through and all the treaties are in place moving it to 25% should be much easier. Maybe the US should investigate all the creative ways US corporations pay so…

“It's a problem caused by US and US corporation and now they come to provide a solution” Shouldn’t the responsibility for US corporate problems be (presumably) addressed by the US government? I’m not understanding your point here.

It is overly simplistic to think of a global company, such as Oracle, or Coca Cola, as a single monolithic US corporation. They have literally hundreds of subsidiary companies all over the world, manufacturing and selling into different markets.

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

#82

Post by x3n0ph3n3 »

somethingwitty1 wrote: post #66
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.

I always find this kind of thought interesting. The government provides a ton of things. Do you use public roads or sidewalks? Do you live, work or shop in a structure that adheres to building codes? Do you have power? Do you have access to the internet? Do you enjoy food that doesn't kill you? So many of these things wouldn't be possible for the general population without government. It takes money to operate a gove…

Everything you described is done with less than 15% of total spending budget that the U.S. currently allocates. The vast majority goes to paying for military spending and benefits to people who pay very little tax.

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

#83

Post by foobarian »

disabled wrote: post #73
HWR_14 wrote: post #56

Earlier quoted context omitted.

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 coun…

> Croatia is a good example

When I think of a country like Croatia, I like to compare it to some locale in the US with a similar total pop (4-5M?). Things start to make more sense then, that's a smallish metro region where that kind of networking is more common.

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

#84

Post by neither_color »

throwawaysea wrote: post #36
andrepd wrote: post #29

Earlier quoted context omitted.

"Medoicrity" is countries around the world losing hundreds of billions of dollars per year in tax evasion and capital flight. A "cartel" in this case, meaning a (democratic) agreement between major economic blocs to put a floor on corporate tax, and sanction those who violate this, is precisely what you need.

It isn't "countries around the world" that lose taxes and capital. It's a small number of very rich countries, mostly in the West, and primarily the US. This is simply a way for the US to retain economic power (and all the other powers that come from it) while cutting off competitive paths for other countries to compete and get rich. The reason this feels like a cartel is because the proposed policies amount to a joi…

It's similar to the clean energy debate. Rich countries telling developing countries that they cannot get rich the same way they did. It's more about securing their positions from competitors than actually helping the poor or whatever.

Also, every country that agrees to this minimum tax loses a bit of sovereignty, because if a member state needs to for example lower their rate to 14% or 10% in the future for a very good reason, they can't.

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

#85

Post by thegreatpeter »

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.

It sounds like you should do some research and see what the govt actually provides for you!

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

#86

Post by coliveira »

onlyrealcuzzo wrote: post #41
hellow0rldz wrote: post #27

Earlier quoted context omitted.

Precisely. But instead of solving this problem inside US they want to re-engineer the whole globe. Most countries are mad about multinationals, most of them rich US multinationals. If the US would do a proper job of taxing their own corporations none of this would be necessary. Interesting how this is just in time for the Dutch sandwich scheme to expire. Clearly something else was missing!

How else do you solve this in the US? Company A sells all of its IP to Ireland. They have the Irish company charge them 100% of the profits for IP. Poof. No US taxable income. What's your magic beans solution for this beside what the IRS plans to do?

It is very simple: just make corporate profits for US corporations (or more sensibly, the difference in taxes) taxable on the US, wherever it is made. This is already the rule for individuals.

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

#87

Post by toast0 »

hellow0rldz wrote: post #27
germinalphrase wrote: post #19

Earlier quoted context omitted.

“It's a problem caused by US and US corporation and now they come to provide a solution” Shouldn’t the responsibility for US corporate problems be (presumably) addressed by the US government? I’m not understanding your point here.

Precisely. But instead of solving this problem inside US they want to re-engineer the whole globe. Most countries are mad about multinationals, most of them rich US multinationals. If the US would do a proper job of taxing their own corporations none of this would be necessary. Interesting how this is just in time for the Dutch sandwich scheme to expire. Clearly something else was missing!

What does a proper job of taxing US corporations look like?

Currently, US corporations have a minimum tax of 10% on global income or 20% on US income; sounds like the numbers are proposed to change to 15% and 28% (or something; NYT paywall is loading too fast today, and it's a proposed law so the details aren't set and not worth fighting over); and the US is saying hey, these guys are going to pay 15% on income from your country, you may as well have them pay it to you instead.

The AMT on global income was part of the Trump tax changes, and is a departure from the full corporate rate on global income, but only due when/if money made it back to the US.

I imagine a next step would be charging multinationals headquartered elsewhere but operating in the US the AMT on their global income. That's kind of far reaching though, so if they can get a few major countries on board instead, that's better.

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

#88

Post by tonfa »

alpha42 wrote: post #74
hellow0rldz wrote: post #30

Earlier quoted context omitted.

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.

> 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.

Historically that proposal was pushed by EU states and the US wasn't onboard. It's recent development that the US agrees to it.

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

#89

Post by vladvasiliu »

mgolawala wrote: post #75
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 wha…

I don't have a good answer to this question, and am actually curious about it.

But note that in the EU we do have VAT, and the governments are still (pretending to be) looking for ways to curb "tax optimization".

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

#90

Post by treespace88 »

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…

I would imagine many CEOs being on board with this.

If your competitors are using these loopholes, you have to as well.

It’s the individuals that shield their wealth by using international corporations that stand to lose the most.

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