3 ms·

Just like Amazon's search for a new HQ, taxation based on borders is broken in a globalized world. Megacorporations can shop around to find a tax regime they li

by Tarq0n 9y ago

Just like Amazon's search for a new HQ, taxation based on borders is broken in a globalized world. Megacorporations can shop around to find a tax regime they like, playing countries off against each other to get a good deal. [0] Reaching for solutions that either provide for extraterritoriality is only logical, given how impossible it is to unify the whole world behind a common tax scheme. It's a typical tragedy of the commons. [0] https://www.reuters.com/article/us-google-tax/google-accounts-show-11-billion-euros-moved-via-low-tax-dutch-sandwich-in-2014-idUSKCN0VS1GP https://www.reuters.com/article/us-google-tax/google-account...

downunderman 9y ago
It would be interesting to ponder where would companies choose to go if every nation harmonised their tax system globally. Removing all tax incentive.
- tonyedgecombe 9y ago
  We are heading to a harmonised tax system, zero corporation tax everywhere.
  - freeflight 9y ago
    "Harmonised tax system" makes it sounds so nice and useful, let's rather call it what it actually is: A race to the bottom, without an actual bottom. It's not just zero tax, in some cases they are literally handing out incentives, at the expense of the remaining taxpayers.
- dane-pgp 9y ago
  Or, slightly more achievably, imagine that the EU and a few other economically large countries agreed that any corporation with more than, say, a billion dollars in annual revenue has to pay at least X% effective tax rate somewhere (and report their accounts to each of the countries concerned), or be forbidden from operating within any of their borders. Extra rules would need to be in place to stop large corporations splitting themselves into smaller smurf companies, but the X% number could initially be set to a value which doesn't cause any low-tax countries to lose any corporations which base themselves there.

by Tarq0n 9y ago

downunderman 9y ago

It would be interesting to ponder where would companies choose to go if every nation harmonised their tax system globally. Removing all tax incentive.

tonyedgecombe 9y ago
We are heading to a harmonised tax system, zero corporation tax everywhere.
- freeflight 9y ago
  "Harmonised tax system" makes it sounds so nice and useful, let's rather call it what it actually is: A race to the bottom, without an actual bottom. It's not just zero tax, in some cases they are literally handing out incentives, at the expense of the remaining taxpayers.
dane-pgp 9y ago
Or, slightly more achievably, imagine that the EU and a few other economically large countries agreed that any corporation with more than, say, a billion dollars in annual revenue has to pay at least X% effective tax rate somewhere (and report their accounts to each of the countries concerned), or be forbidden from operating within any of their borders. Extra rules would need to be in place to stop large corporations splitting themselves into smaller smurf companies, but the X% number could initially be set to a value which doesn't cause any low-tax countries to lose any corporations which base themselves there.