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Let's flip the question. Why SHOULD a company pay taxes on foreign countries? Why shouldn't the foreign country get to collect the tax because the economic acti

Let's flip the question. Why SHOULD a company pay taxes on foreign countries? Why shouldn't the foreign country get to collect the tax because the economic activity is completely part of their nation? The US is the only developed nation that has this ridiculous tax system.

dragonwriter 10y ago
Corporations are creatures of government which either should not be created at all, or which should serve the public interest. Companies that are not corporations may be another matter...
spoonie 10y ago
Arguably it was largely workers performing R&D inside of the US which resulted in the creation of these products. So there is at least a bunch of income, payroll, property taxs, etc. paid already inside of the US. Now, if the company were to move all of their R&D to Bermuda & Ireland like they moved their IP, we could argue that they deserve to pay the ~0% corporate income tax on their overseas profits.
- AnthonyMouse 10y ago
  > Now, if the company were to move all of their R&D to Bermuda & Ireland like they moved their IP, we could argue that they deserve to pay the ~0% corporate income tax on their overseas profits. This is actually the thing that politically prevents such taxes from being collected. You have these companies that spend e.g. ten billion dollars on R&D that produces a hundred billion dollars in profits. Right now the ten billion dollars they spend on R&D gets taxed in various ways (payroll/sales/property taxes) in the place they do the R&D, which is very good for that place. What happens if you then demand that on top of that, 35% of the hundred billion be paid to the same place? You just made it actually profitable for them to go to California, find some engineers, and pay them five times the previous market rate plus their relocation costs to move to Ireland and set up shop there.
internaut 10y ago
Yes. A corollary to this is if I buy an item from the United States and ship it to Ireland (where I live), then why should I pay tax on it? The customs officials are acting as rentiers in that case. I'm saying no taxes need to be paid. I am saying that increasingly with the Net there is diminished moral rationale for some forms of taxation, leaving out the subject of the right of a government to levy taxes. I think we'll increasingly see Henry George style taxation coming back into fashion as a result of this.

dragonwriter 10y ago

Corporations are creatures of government which either should not be created at all, or which should serve the public interest. Companies that are not corporations may be another matter...

spoonie 10y ago

Arguably it was largely workers performing R&D inside of the US which resulted in the creation of these products. So there is at least a bunch of income, payroll, property taxs, etc. paid already inside of the US. Now, if the company were to move all of their R&D to Bermuda & Ireland like they moved their IP, we could argue that they deserve to pay the ~0% corporate income tax on their overseas profits.

AnthonyMouse 10y ago
> Now, if the company were to move all of their R&D to Bermuda & Ireland like they moved their IP, we could argue that they deserve to pay the ~0% corporate income tax on their overseas profits. This is actually the thing that politically prevents such taxes from being collected. You have these companies that spend e.g. ten billion dollars on R&D that produces a hundred billion dollars in profits. Right now the ten billion dollars they spend on R&D gets taxed in various ways (payroll/sales/property taxes) in the place they do the R&D, which is very good for that place. What happens if you then demand that on top of that, 35% of the hundred billion be paid to the same place? You just made it actually profitable for them to go to California, find some engineers, and pay them five times the previous market rate plus their relocation costs to move to Ireland and set up shop there.

internaut 10y ago

Yes. A corollary to this is if I buy an item from the United States and ship it to Ireland (where I live), then why should I pay tax on it? The customs officials are acting as rentiers in that case. I'm saying no taxes need to be paid. I am saying that increasingly with the Net there is diminished moral rationale for some forms of taxation, leaving out the subject of the right of a government to levy taxes. I think we'll increasingly see Henry George style taxation coming back into fashion as a result of this.