7 ms·

The funny thing is, if the tax rate was much lower - say 15% - there would be no incentive for "tax planning" described in article (which is legal, of course).

by _red 9y ago

The funny thing is, if the tax rate was much lower - say 15% - there would be no incentive for "tax planning" described in article (which is legal, of course). The expense for all those accountants, lawyers, lobbyist, and inefficiencies caused by artificially shuffling money around would outweigh just paying the 10-15% tax bill. Semi-relatedly: Why do you think religions for eons have set the tithe rate to be approx 10%? Seems like history has worked out a rate that most people are comfortable paying.

robert_foss 9y ago
15% is still more than 0%+overhead depending on the total amount we're talking about. Should only the very biggest player, to whom the overhead is inconsequential, be allowed to avoid taxes?
- _red 9y ago
  Your assumption is that the overhead is only a "one-time cost", but its never going to be that simple. Most of the time there are a multiplicity of overlapping cost; Opportunity cost (you have your money safely in a tax-haven, but now to move it out for legitimate production use has another cost and associated accountant / lawyer overhead). Or simply ongoing inefficiencies - You've opened an office in Country Z because doing so allows you to save on taxes in your main area of Country A, but the truth is you have no real need for an office in Country Z - its simply an ongoing and perhaps ever growing cost subject to a whole new need for budget forecasting, currency fluctuations, etc. I have no idea what the number is, but currency fluctuations alone could make a corporation decide to simply pay their 15% and escape headaches and split brainpower, trim staff of lawyers, consolidate offices, etc. Now, if the corporate tax rate is 36+% well, thats a different story.
sheeshkebab 9y ago
I have no simpathy for these ultrarich dipshits and their companies that think that they are better than the rest of us. They'll probably get what they deserve eventually.
limeblack 9y ago
Tim Cook I believe stated he needed a single digit number to consider bringing back the money[1] which is different but certainly important to note. The 2013 Apple hearing further explains the tax number he believes would be needed to be competitive[2]. [1] https://www.theverge.com/2013/5/21/4351978/tim-cook-defends-apples-overseas-cash-im-not-an-unfair-person-not-who https://www.theverge.com/2013/5/21/4351978/tim-cook-defends-... [2] https://www.youtube.com/watch?v=s7H1Y6Nr3c4 https://www.youtube.com/watch?v=s7H1Y6Nr3c4
FLUX-YOU 9y ago
>The expense for all those accountants, lawyers, lobbyist, and inefficiencies caused by artificially shuffling money around would outweigh just paying the 10-15% tax bill. That will certainly raise the bar to which paying for those services is worth it, assuming none of them change their prices, find a loophole or scheme, or don't develop new technology to reduce their operating costs. In fact, establishing a 10-15% tax and then getting the public to wring their hands while saying "thank god that's taken care of" is asking to continue to lose tax money to these schemes.
valuearb 9y ago
Corporate tax rate would be far better for society if it was set to zero.
- vixen99 9y ago
  Options for negating the effect of corporate tax are: reduce dividends (for pension fund holders among others), pay employees less / get rid of them or increase the price of their products. Someone pays. They could increase productivity of course. Any data on this?
karmajunkie 9y ago
Ok, what you're basically saying here is that we should let companies decide how much taxes they're going to pay. Why would 10% be the number? Why is it not profitable to move money around at 5%, or 2.5%? Lawyers are only expensive to normal-income people—the amount it costs to put all this kind of thing together is an order of magnitude smaller than a rounding error on the sums in question. No. International conglomerates should have to follow the same rules as everyone else, and that means that we as a country determine what their fair share is, not them. To be clear, I'm in favor of tax reform, though not the sleight-of-hand that's currently on the table. I agree with the argument that small to medium sized businesses are really the ones taking the brunt of a higher tax rate, because they can't afford or otherwise don't have the means to avail themselves of the kind of accounting tricks that multinationals do, and I'm in favor of closing those and reducing the corporate tax rate. But its not up to the company to decide what taxes they're going to pay or not.
- gbacon 9y ago
  It’s an interesting idea in principle, but how will you implement it in the real world?
  - karmajunkie 9y ago
    If we can pass a law forbidding US companies from doing business with or in nations like Cuba or Iran, we can certainly do so for countries that fail to enforce their international reporting duties.
AstralStorm 9y ago
You cannot compete with 0% tax rate. In the past it was not available because global markets didn't work efficiently and there were strong prohibitions on such attempts.

by _red 9y ago

robert_foss 9y ago

15% is still more than 0%+overhead depending on the total amount we're talking about. Should only the very biggest player, to whom the overhead is inconsequential, be allowed to avoid taxes?

_red 9y ago
Your assumption is that the overhead is only a "one-time cost", but its never going to be that simple. Most of the time there are a multiplicity of overlapping cost; Opportunity cost (you have your money safely in a tax-haven, but now to move it out for legitimate production use has another cost and associated accountant / lawyer overhead). Or simply ongoing inefficiencies - You've opened an office in Country Z because doing so allows you to save on taxes in your main area of Country A, but the truth is you have no real need for an office in Country Z - its simply an ongoing and perhaps ever growing cost subject to a whole new need for budget forecasting, currency fluctuations, etc. I have no idea what the number is, but currency fluctuations alone could make a corporation decide to simply pay their 15% and escape headaches and split brainpower, trim staff of lawyers, consolidate offices, etc. Now, if the corporate tax rate is 36+% well, thats a different story.

sheeshkebab 9y ago

I have no simpathy for these ultrarich dipshits and their companies that think that they are better than the rest of us. They'll probably get what they deserve eventually.

limeblack 9y ago

Tim Cook I believe stated he needed a single digit number to consider bringing back the money[1] which is different but certainly important to note. The 2013 Apple hearing further explains the tax number he believes would be needed to be competitive[2]. [1] https://www.theverge.com/2013/5/21/4351978/tim-cook-defends-apples-overseas-cash-im-not-an-unfair-person-not-who https://www.theverge.com/2013/5/21/4351978/tim-cook-defends-... [2] https://www.youtube.com/watch?v=s7H1Y6Nr3c4 https://www.youtube.com/watch?v=s7H1Y6Nr3c4

FLUX-YOU 9y ago

>The expense for all those accountants, lawyers, lobbyist, and inefficiencies caused by artificially shuffling money around would outweigh just paying the 10-15% tax bill. That will certainly raise the bar to which paying for those services is worth it, assuming none of them change their prices, find a loophole or scheme, or don't develop new technology to reduce their operating costs. In fact, establishing a 10-15% tax and then getting the public to wring their hands while saying "thank god that's taken care of" is asking to continue to lose tax money to these schemes.

valuearb 9y ago

Corporate tax rate would be far better for society if it was set to zero.

vixen99 9y ago
Options for negating the effect of corporate tax are: reduce dividends (for pension fund holders among others), pay employees less / get rid of them or increase the price of their products. Someone pays. They could increase productivity of course. Any data on this?

karmajunkie 9y ago

Ok, what you're basically saying here is that we should let companies decide how much taxes they're going to pay. Why would 10% be the number? Why is it not profitable to move money around at 5%, or 2.5%? Lawyers are only expensive to normal-income people—the amount it costs to put all this kind of thing together is an order of magnitude smaller than a rounding error on the sums in question. No. International conglomerates should have to follow the same rules as everyone else, and that means that we as a country determine what their fair share is, not them. To be clear, I'm in favor of tax reform, though not the sleight-of-hand that's currently on the table. I agree with the argument that small to medium sized businesses are really the ones taking the brunt of a higher tax rate, because they can't afford or otherwise don't have the means to avail themselves of the kind of accounting tricks that multinationals do, and I'm in favor of closing those and reducing the corporate tax rate. But its not up to the company to decide what taxes they're going to pay or not.

gbacon 9y ago
It’s an interesting idea in principle, but how will you implement it in the real world?
- karmajunkie 9y ago
  If we can pass a law forbidding US companies from doing business with or in nations like Cuba or Iran, we can certainly do so for countries that fail to enforce their international reporting duties.

AstralStorm 9y ago

You cannot compete with 0% tax rate. In the past it was not available because global markets didn't work efficiently and there were strong prohibitions on such attempts.