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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

#91

Post by zionic »

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…

>Do you use public roads or sidewalks?

Yes, and that is paid for by my outrageous property/vehicle registration/gas taxes. Huge portions of our cities have roads in near 3rd-world conditions. The major arteries of every top-50 US city grind to a halt twice a day, and you have been conditioned to believe this is normal/acceptable. Our bridges, roads, and railways are falling apart.

> Do you live, work or shop in a structure that adheres to building codes?

Yes, and I pay for that directly via the price of homes (home inspection and permit costs are passed on).

> Do you have power? Do you have access to the internet? Do you enjoy food that doesn't kill you?

I pay for all of these things directly out of the money left over that the government does not take from me. In the case of food, I pay taxes again on it when I buy it.

> share the frustration that tax money isn't always (often) spent effectively, but then I ask...what have I done? what would I do differently? At the end of the day, I'm not that interested in doing these things.

Where do you live that the government provides you home, roads, sidewalks, food, power, and water for $0 post-taxes? Because I pay for all those things directly with post-tax income.

>Paying these taxes doesn't measurably impact my overall well-being.

How does 30-50% of your take home not impact your "overall well being"? All forms of calculation that result in a lower number than that have, in my experience, come from ignorance of the comprehensive tax cycle.

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

#92

Post by zionic »

thebooktocome wrote: post #39
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.

Where are you immigrating to that doesn't "mismanage" tax revenue?

At this point mars is looking pretty comfy.

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

#93

Post by klmadfejno »

nostromo wrote: post #11
gotoeleven wrote: post #3

Does humanity really want an authority powerful enough to claim dominion over the entire planet?

This isn't a great article. It's more about the politics than the actual proposal. Bloomberg has a better write up: https://www.bloomberg.com/news/articles/2021-04-08/plans-for... To answer your question, this wouldn't create a new organization to collect a global tax. Instead it would give the IRS the authority to tax American companies (say, Google) an additional amount on their overseas earnings. So, if they paid…

Why do other countries need to sign the agreement? They don't really seem like they have any part in this process.

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

#94

Post by isbvhodnvemrwvn »

HWR_14 wrote: post #59

Is this similar to how the EU has minimum tax rates on businesses? Without recalling too many details, I recall Apple and Ireland being sued by the EU government for a sweetheart tax deal they put in place.

That was because Ireland only made this deal available to Apple, not because of low tax rates. In Estonia companies don't pay CIT unless they pay out dividends, for example.

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

#95

Post by russli1993 »

arrosenberg wrote: post #46
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?

> This makes no sense. Is the IRS a global institution now? It makes perfect sense if you take them as separate concepts. 1. Joe Biden wants other countries to work with the US and set a tax floor for corporate taxation. 2. The US Congress can pass a law that brings corporate foreign taxation in line with how real people (not just fictional ones) are taxed on foreign profits. This doesn't make the IRS any more global…

will there be any penalties for countries that do not agree to this? Say if a country wants to set a lower tax rate than this 15% global minimum in order to attract businesses. Or this country could offer lower taxes in general because they don't want to collect that much tax. After all, how much tax to collect is a structural and public spending issue, and a ideological issue. It is specific to a country, and taxation policies and methods are supposed be the sovereignty of a specific country. I also assume this 15% tax is a tax on company profits. But some countries may want to have lower income tax, but a higher value added tax.

But in the future, when this is established, US and other participants in this scheme might view countries offering significant lower tax as anti-competitive, disruption of the market, disruption of established "international order". Using these talking points, the next logical step is to enact penalties. For example, levy extra taxes on that country businesses' operations and transactions in the judications of all of the participants. Would this be a valid concern?

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

#97

Post by awillen »

codeecan wrote: post #37

If they would just close the loop holes that allow things like having Apple, setup a subsidiary that licenses its own stuff back to itself so it can move profits around the world ... you'd solve this problem. Make a rule, if you own >50% of a company, you can't buy trademarks, patents, whatever from yourself.

The problem isn't any specific rule or loophole, it's the immense complexity of the system. Removing the loophole they're using today doesn't fix the system, it just leads to corporations using other loopholes.

That's why putting in place a simple minimum tax is a good plan - if there's a complex system but an overarching rule that says regardless of any other rules, you must pay at minimum 15% of profits, then you at least can't avoid that minimum (I mean, except with clever classifications of what your profits are, but at least for the most part it's not feasible for most of the large companies, excepting some like Amazon, to claim that they make no profits).

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

#98

Post by notahacker »

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…

VAT isn't paid by corporations which shelter vast amounts of wealth whilst doing very little real trading, and is the same whether the corporation selling the goods is very low or high margin.

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

#99

Post by klyrs »

thrill wrote: post #60
ericmay wrote: post #42

Earlier quoted context omitted.

Could you walk us through your proposed solution? Like what the United States could be doing that would be a proper job of taxing its own corporations?

Set guaranteed tax rates that make keeping money in the US attractive instead of trying to punish those who find the business practices of other sovereign nations offering better treatment.

Does this mean reducing taxes to 0%, so that corporations don't need to jump through hoops to get the same effect in other jurisdictions?

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

#100

Post by wkrsz »

prepend wrote: post #9

It’s interesting to see a multinational standard to set a “standard” for taxation. Seems odd to start with corporate income taxes as it seems pretty efficient to not tax corporations and encourage more distribution to individuals and tax there. I remember in my microeconomics101 course how taxes on corporate profit are easy to squish around with tax deductible benefits that reduce profit (eg, country club dues are an…

On the other hand, pushing too much the tax burden to one payer (corporation, shareholder, employee, consumer) creates strong incentives for tax optimization for that payer. If tax burden is spread over many different taxes will decrease profitability of dodging each individual tax.
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