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I think you are fundamentally missing the nature of the loopholes being exploited. They have less to do with the complexity of the taxes in one country but rath

I think you are fundamentally missing the nature of the loopholes being exploited. They have less to do with the complexity of the taxes in one country but rather the complexity that emerges naturally from different countries having different tax codes. How would a flat tax help avoid this scheme for example?: http://www.nytimes.com/interactive/2012/04/28/business/Double-Irish-With-A-Dutch-Sandwich.html http://www.nytimes.com/interactive/2012/04/28/business/Doubl... The whole point is they skip the U.S. tax code entirely.

eru 9y ago
There are taxes that are harder to skip than others. (At the risk of sounding like a broken record, land value taxation is basically impossible to avoid if you are using land.)
- dontreact 9y ago
  Would that really be effective? A lot of very large companies may just own very little land.
  - eru 9y ago
    You'd pay for land by value, not amount. So Google owning an block in Manhattan to put their office on would probably garner a higher bill than a farmer with a bunch of fields. But yes, you can side-step the tax by using less land and eg more capital. (But that's fine, somebody else will use that land you are not using, and pay the tax for it. And if everyone is doing that substitution, it'll make land more expensive in the end.)
cm2187 9y ago
If you don't have control over foreign loopholes, you eliminate them by applying to companies what you apply to individuals in the US. I.e. that US companies may not pay less taxes than they would pay if their activity was all in the US. It would of course increase the effective tax rate in for US large companies a lot, but the US corporate tax rate is very high vs other countries. If it becomes efficient you can afford to reduce it.
- dontreact 9y ago
  I don't think getting rid of these foreign loopholes is as simple as you think it is. 1. What counts as a "US Company"? 2. So you're proposing that Apple pay the U.S. taxes on sales in Germany? Also that every country should do this?
  - cm2187 9y ago
    1. Companies which parent owner is based in the US. Companies are already paying taxes based on consolidated regime, it is just that they consolidate all entities within a tax jurisdiction. So the concept exists, it could just be extended. 2. You wouldn't have a double taxation. You would apply to companies what the US applies to US individuals. If you have a subsidiary in Germany and paying local taxes of 10, but that would be paying 15 if you had the same income in the US, then you owe 5 to the US taxman in addition to the 10 you owe to the German taxman.
    - dontreact 9y ago
      Alright here are my new loopholes to evade your amendments: I'll set it up so that my other company in the other country is sharing profits with my main company. Maybe I'll have a family member or someone I trust actually own that company. Perhaps this doesn't work for some reason that already exists in the tax code, but I've already met the letter of the law that you spelled out here. Obviously that would be easy to fix with some further amendments but the problem is that this back and forth we are having is happening at a larger scale through the years. And in real life I have 10-1000 times as much money to figure out how to defeat or get around your tax codes.
      - cm2187 9y ago
        I think what you are describing is a company not based in the US not having to pay this tax. Effectively companies fleeing the US. Agree that this would likely be a consequence. But that's the price to pay to maintaining high tax rates. Countries don't like competition but the reality is that this competition exists among them.
valuearb 9y ago
Apple doesn’t skip the US tax code, they pay huge amounts of US taxes. They don’t repatriate foreign earnings because it would cost shareholders over a 50% tax rate.
- dontreact 9y ago
  It is not believable to me that such a high fraction of Apple's profits are happening in Ireland. Clearly something is being distorted or manipulated to avoid either the U.S. or some other country's tax code. If this was all so above board and not a loophole or gray area, why do they want to be so secretive about it? "“For those of you who are not aware Apple are extremely sensitive concerning publicity,” wrote Cameron Adderley, global head of Appleby’s corporate department, in a March 20, 2014 email to other senior partners. “They also expect the work that is being done for them only to be discussed amongst personnel who need to know.” https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.html https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey....
  - valuearb 9y ago
    Virtually none of Apples profits are made in Ireland and Apple doesn’t claim they are. Ireland is where they’ve invested the profits, after paying taxes on them to the countries they were earned in. The controversy is only on how much tax they should pay on the interest on their profits. Ireland gave them a sweet deal because it cost them nothing to let Apple deposit $100B+ in Irish banks. And all corporate decisions have basic levels of privacy attached. No accountant, tax or otherwise, should talk about their clients tax and business decisions.

eru 9y ago

There are taxes that are harder to skip than others. (At the risk of sounding like a broken record, land value taxation is basically impossible to avoid if you are using land.)

dontreact 9y ago
Would that really be effective? A lot of very large companies may just own very little land.
- eru 9y ago
  You'd pay for land by value, not amount. So Google owning an block in Manhattan to put their office on would probably garner a higher bill than a farmer with a bunch of fields. But yes, you can side-step the tax by using less land and eg more capital. (But that's fine, somebody else will use that land you are not using, and pay the tax for it. And if everyone is doing that substitution, it'll make land more expensive in the end.)

cm2187 9y ago

If you don't have control over foreign loopholes, you eliminate them by applying to companies what you apply to individuals in the US. I.e. that US companies may not pay less taxes than they would pay if their activity was all in the US. It would of course increase the effective tax rate in for US large companies a lot, but the US corporate tax rate is very high vs other countries. If it becomes efficient you can afford to reduce it.

dontreact 9y ago
I don't think getting rid of these foreign loopholes is as simple as you think it is. 1. What counts as a "US Company"? 2. So you're proposing that Apple pay the U.S. taxes on sales in Germany? Also that every country should do this?
- cm2187 9y ago
  1. Companies which parent owner is based in the US. Companies are already paying taxes based on consolidated regime, it is just that they consolidate all entities within a tax jurisdiction. So the concept exists, it could just be extended. 2. You wouldn't have a double taxation. You would apply to companies what the US applies to US individuals. If you have a subsidiary in Germany and paying local taxes of 10, but that would be paying 15 if you had the same income in the US, then you owe 5 to the US taxman in addition to the 10 you owe to the German taxman.
  - dontreact 9y ago
    Alright here are my new loopholes to evade your amendments: I'll set it up so that my other company in the other country is sharing profits with my main company. Maybe I'll have a family member or someone I trust actually own that company. Perhaps this doesn't work for some reason that already exists in the tax code, but I've already met the letter of the law that you spelled out here. Obviously that would be easy to fix with some further amendments but the problem is that this back and forth we are having is happening at a larger scale through the years. And in real life I have 10-1000 times as much money to figure out how to defeat or get around your tax codes.
    - cm2187 9y ago
      I think what you are describing is a company not based in the US not having to pay this tax. Effectively companies fleeing the US. Agree that this would likely be a consequence. But that's the price to pay to maintaining high tax rates. Countries don't like competition but the reality is that this competition exists among them.

valuearb 9y ago

Apple doesn’t skip the US tax code, they pay huge amounts of US taxes. They don’t repatriate foreign earnings because it would cost shareholders over a 50% tax rate.

dontreact 9y ago
It is not believable to me that such a high fraction of Apple's profits are happening in Ireland. Clearly something is being distorted or manipulated to avoid either the U.S. or some other country's tax code. If this was all so above board and not a loophole or gray area, why do they want to be so secretive about it? "“For those of you who are not aware Apple are extremely sensitive concerning publicity,” wrote Cameron Adderley, global head of Appleby’s corporate department, in a March 20, 2014 email to other senior partners. “They also expect the work that is being done for them only to be discussed amongst personnel who need to know.” https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.html https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey....
- valuearb 9y ago
  Virtually none of Apples profits are made in Ireland and Apple doesn’t claim they are. Ireland is where they’ve invested the profits, after paying taxes on them to the countries they were earned in. The controversy is only on how much tax they should pay on the interest on their profits. Ireland gave them a sweet deal because it cost them nothing to let Apple deposit $100B+ in Irish banks. And all corporate decisions have basic levels of privacy attached. No accountant, tax or otherwise, should talk about their clients tax and business decisions.