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Another solution is to move from taxing profits to taxing consumption, i.e. through VAT, and then enforce it even for virtual services. That way, Apple's US tax
by Hermel 11y ago
Another solution is to move from taxing profits to taxing consumption, i.e. through VAT, and then enforce it even for virtual services. That way, Apple's US tax would for example be proportional its US sales, which sounds fair.
- Retric 11y agoThat pushes people to buy goods and services overseas. AKA, why buy a US yacht and pay an extra 20%. The real solution IMO is to tax US companies for world wide profits and have punitive taxes on foreign companies to keep US companies from pretending to move offshore.
- seanmcdirmid 11y agoYou mean close the economy to foreign companies ala North Korea? I'm not sure that is a nice way to go, definitely not WTO friendly.
- Retric 11y agoNo, more like disqualify them for specific tax breaks, or slightly increase there tax rate ~1-5%. Don't forget China for example is very hard on foreign corporations, yet they are generally happy to jump though hoops for such a large market.
- seanmcdirmid 11y agoYes, they are, being a US citizen working in China I know that very personally. So if the US goes the China approach, we only welcome foreign companies that we can screw something from, like IP or expertise, and block the rest out (foreign social networking websites? create a great firewall). The US benefits GREATLY from its open market while China's semi closed market in turn hurts it a lot. Ya, foreign companies still operate there, but only with an expectation that it will open in the future, not given today's situation! Having a different tax rate for foreign companies would basically destroy the WTO, all those treaties that benefit the USA in lopsided ways go away, and we will just lose a lot of wealth in one swoop. All the other countries will retaliate of course, taking a significant chunk of global GDP that relates to trade down, almost probably causing a few wars and such.
- Retric 11y agoYour vastly overstating things. All countries including the US already favor local industry's. Just look at the taxes on sugar. PS: In a wider context, the benefits of free trade are overstated. Not all industries have equal long term benefits even if the short term looks great. https://en.wikipedia.org/wiki/Phosphate_mining_in_Nauru https://en.wikipedia.org/wiki/Phosphate_mining_in_Nauru The problem of Nauru presents a paradox. The striking contrast is between a superficially happy state of affairs and an uncertain and indeed alarming future... But this picture of peace and well-being and security is deceptive. Indeed it is a false paradise. For these gentle people are dominated by the knowledge that the present happy state of affairs cannot continue. (1962)
- seanmcdirmid 11y agoThe benefits of free trade are of course lopsided in the USA's favor. But the whole world gets a boost anyways, especially Nauru who can't produce much locally. If America was left to its own market, there would be no Boeing or Silicon Valley to speak of. Ya, we could go back to local production, isn't that what North Korean juche is all about?
- ryandrake 11y agoIf I as a US Citizen were to work overseas, I would owe US tax on the wages I make outside the country. Why doesn't the same logic apply for a company that makes profits overseas? This is a rhetorical question, obviously, we all know why the system is stacked in favor of corporations.
- seanmcdirmid 11y agoI am a US citizen who works overseas. You get to deduct your foreign tax obligations on your US tax returns (if you don't go for the standard foreign income earned deduction). Oh, well, some "taxes" aren't really taxes in the US sense, like taxes on health insurance, or what about social security contributions? And then there are weird situations where a US citizen goes on a business trip in the US and is on the hook for both Chinese and US taxes. Believe me, US citizens working abroad and US companies doing business abroad suffer through similar pain when it comes time to file tax returns. Resolving differences in two completely different systems is very hard.
- matt4077 11y agoVAT is, unfortunately, a flat tax. Moving to a VAT-only system without any offsets would be the biggest redistribution of wealth (upwards) since the Bush tax cuts.
- marcosdumay 11y agoVAT isn't flat. Since it does not apply to monetary instruments, a VAT is regressive. I still think that VAT with offsets is the best taxation form available (and universal income the best offset form). But it alone is disastrous. And, while we are at it, make sure the VAT is really a VAT, not a sale-value tax. Because it usually is, and it's the one tax form worse than a VAT.
- jcfrei 11y agoVAT is one of the worst possible solutions. The ones who carry most of the tax burden are usually the consumers, through higher prices (though it depends on the nature of the good). VAT is one of the most discriminating taxes out there, where the poor pay relatively speaking much more tax than the rich - because consumption doesn't increase linearly with wealth.
- morgante 11y ago> Apple's US tax would for example be proportional its US sales, which sounds fair. Apple's US tax already is proportional to its US sales. The major strategy that it and other US tech companies use is keeping overseas profits off-shore, not avoiding taxes on US sales.