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G7: Rich nations back deal to tax multinationals

bbc.co.uk

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Re: G7: Rich nations back deal to tax multinationals

#801

Post by anoncake »

bumby wrote: post #701
anoncake wrote: post #641

Earlier quoted context omitted.

Why not? Don't shares represent ownership of a company? Aren't you responsible for your property?

Just to underscore what was previously stated, I think this philosophy would drastically change the paradigm. I’m guessing it would severely restrict the money flowing into stocks which would have repercussions in other areas like pensions etc. Point being, I don’t think it can just be layered onto the existing system without serious blowback.

As I wrote, there could be an exception for non-voting stock. At least temporarily.

But ultimately, it's supposed to change the paradigm. Because currently the economy is run by paperclip maximizers that no human is held responsible for. Which is not ideal.

Re: G7: Rich nations back deal to tax multinationals

#802

Post by nearbuy »

edoceo wrote: post #756
nearbuy wrote: post #622

Earlier quoted context omitted.

So if you had a completely Australian company selling stuff online, they'd be subject to US corporate tax for profit earned from American customers, French tax for customers from France, etc? This seems complicated because unlike sales tax, corporate tax is based on profit at the end of the year. It's much more complicated than sales tax. Companies would have to handle corporate tax code for up to 195 countries.

Sure? Why not? I practice it wouldn't be 195. We're trying to fix a tax avoidance issue so we've to fix the money somewhere. Demand-side seems the right choice. I'm assuming there'd be some minimum threshold. Most companies are selling mostly at home. And if you want to play InternationalBigCo game it seems a reasonable burden to me.

To start with, how do you figure out how much profit this completely Australian company made in France? It's not their revenue from France, and all their expenses are in Australia. Does the company calculate expenses according to Australian law, or French law? Calculating expenses is complicated, and each country has different rules. You're effectively forcing companies to file full taxes in every country where they have customers.

If the company doesn't declare a profit in France, is France going to audit them? They have no presence in France.

Multiply this issue for every country where customers reside. This is bad for consumers. Companies are going to choose which markets are big enough for it to be worth the additional burden. If you're from Canada, too bad; we don't sell to Canadians.

Australia and France have similar tax rates. This doesn't have much effect on how much tax the company pays; just how much goes to France.

We have already have sales tax, which is a much simpler system that taxes revenue, not profit.

Re: G7: Rich nations back deal to tax multinationals

#803

Post by SturgeonsLaw »

nickpp wrote: post #225
awillen wrote: post #216

Earlier quoted context omitted.

The main reason Amazon is paying a $15 minimum wage is because of substantial pressure from progressives - there's an extensive record of this. The media reporting has largely been coverage of Bernie Sanders and the like, so it's pretty clear that there are non-media folks who have been driving it.

Artificially putting a floor under the price one's allowed to charge for one's services benefits only politicians proposing such populists ideas and the non-working.

Spoken like someone who's far away from minimum wage. One would think it also benefits the people who receive the wage increase, yeah?

My country has a $20 minimum wage, and yet the unemployment rates, small business survival rate, and inflation are all around the same levels at the USA, so all the talk of impending economic catastrophe if we give poor people a few more crumbs seems to be hot air from where I'm sitting.

Re: G7: Rich nations back deal to tax multinationals

#804

Post by kortilla »

lukeschlather wrote: post #680
rayiner wrote: post #645

Earlier quoted context omitted.

Your analogy is flawed because you seem to be assuming that the people with execution authority are the ones who reached an agreement in principle. You’d expect them to succeed in papering it up. That’s not the case here. The agreement in principle was reached by someone who has no power to do anything with regards to corporate taxes. Congress sets U.S. tax law and agrees to treaties. To do that, you need 60% or 66%…

> The agreement in principle was reached by someone who has no power to do anything with regards to corporate taxes I think you are considerably understating the power of the G7 finance ministers including the US Secretary of the Treasury. Sure, they can't ratify a treaty without the cooperation of congress. They're still extraordinarily powerful individuals and have loads of direct authority to shape tax policy.

They can certainly shape implementation details not defined by laws, but they can’t create laws or change existing ones.

Re: G7: Rich nations back deal to tax multinationals

#805

Post by skissane »

wolverine876 wrote: post #794
skissane wrote: post #793

Earlier quoted context omitted.

> I would think a treaty requires all parties to it to think it's a treaty. Well, even the US agrees that "international agreements" are "treaties" in the international law sense, despite not being "treaties" in the US domestic law sense. > Any idea where I can read a bit more about the fundamentals A lot of what I know about this topic I learned from reading the Third Restatement of the Foreign Relations Law of the…

Much appreciated. I may try to read the Vienna Convention, at least. Out of curiosity, what makes you so interested? I'm interested, but I'm usually alone in that.

I used to want to be a lawyer. I even applied to law school once but didn't get in. Probably if I kept on trying I would have gotten in eventually but just decided to stick with software engineering instead.

Re: G7: Rich nations back deal to tax multinationals

#806

Post by Fordec »

jakozaur wrote: post #163

Essentially countries are forming a cartel to set bottom income tax. Forming cartels by private companies to „fix” prices is illegal, but countries are free to do it. However, the actual mechanics of that tax is hard: 1. Countries can still do subsidies, but avoid touching income tax. 2. Taxing by income where revenue is generated is hard to compute. It would make sense to enforce it only on big multinationals. E.g.…

On point 1., EU countries can't do state subsidies. It's illegal under Single Market rules. It was one of the arguments for Brexit that if they leave they can engage in state subsidies again.

Re: G7: Rich nations back deal to tax multinationals

#807

Post by alister »

Ericson2314 wrote: post #669
rsj_hn wrote: post #567

Earlier quoted context omitted.

> How is it not unfair that, for example I can’t deduct rent from my income? Tax policy isn't set by moral arguments, it's set by government need for revenue which is then tweaked by political pressure groups. The reason why you can deduct mortgage interest but not rent has nothing to do with fairness, which is undefined and a massively ambiguous term, but because banks, which are the primary beneficiaries of mortgag…

Governments like the US today can borrow money or print it with very few constraints. Taxes are not primarily about raising revenue. For small, opening (usually developing) economies the matter is different, and they should have more capital controls accordingly.

> Taxes are not primarily about raising revenue

That’s an intriguing comment. Can you explain further?

Re: G7: Rich nations back deal to tax multinationals

#808

Post by mensetmanusman »

PaulRobinson wrote: post #240
rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

If you’re going down this route, many will argue that all forms of income tax are equally “wrong”. Henry George - a 19th century political economist - proposed exactly this, and suggested the only thing that should be taxed should be land: impossible to hide from a tax inspector, potentially a waste to the public commons if useful land that could be exploited isn’t and you can even protect land you wish to keep prist…

That’s an interesting thought experiment:

What if we got rid of all taxes, and the only thing the govt. could do was print money at some fixed %GDP rate to induce inflation.

Then everyone would try to spend faster than inflation and the velocity of money could be quite fast (to increase GDP and spending, etc.)

Maybe a flywheel-economy?

Re: G7: Rich nations back deal to tax multinationals

#809

Post by beisner »

mensetmanusman wrote: post #808
PaulRobinson wrote: post #240

Earlier quoted context omitted.

If you’re going down this route, many will argue that all forms of income tax are equally “wrong”. Henry George - a 19th century political economist - proposed exactly this, and suggested the only thing that should be taxed should be land: impossible to hide from a tax inspector, potentially a waste to the public commons if useful land that could be exploited isn’t and you can even protect land you wish to keep prist…

That’s an interesting thought experiment: What if we got rid of all taxes, and the only thing the govt. could do was print money at some fixed %GDP rate to induce inflation. Then everyone would try to spend faster than inflation and the velocity of money could be quite fast (to increase GDP and spending, etc.) Maybe a flywheel-economy?

This is very similar to Modern Monetary Theory, which views taxation as a means to control inflation rather than a source of funds for a sovereign government. Maybe only applies to a country whose currency is the reserve currency of the world tho…

Re: G7: Rich nations back deal to tax multinationals

#810

Post by Fordec »

peteretep wrote: post #36

Irish are gonna be pissed. Also and not ironically, what a huge win for the workers over capital.

Let me tell you how this plays out, from an Irish perspective.

1. G7 countries can't do anything, trade treaties are sealed, Irish taxation rates are their sovereign right. Vetos baked into things because of the first rejection of the Nice treaty.

2. Even in the event of international pressure forming, (And the US can of course strong arm an arm or two), I don't think the international state understand or wish to see where Ireland is coming from. A country with no population pool, geographically isolate, and no real natural resources to exploit and a worker population very demonstrably willing to flee at the first sign of a failing economy. Enforce this rate, the only real thing that is seen to have made Ireland not a back water farming country, and Ireland engages in what it's government has ever really achieved successfully. Invent tax loopholes. The second an Irish government agrees to this, those politicians will be metaphorically taken out back and shot in the head, to be replaced with someone who won't doom the economy. Even the former terrorist party if needs be. And then they get straight back to the economic gurella warfare, because there's no chance of taking on the G7 mono-el-mono. Every system can be hacked, every tax law has a tax loophole. Ireland just needs to look hard enough, if incentivized to do so. And it's entire stability and economic future is quite the incentive.

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