4 ms·

Nothing is really changing in terms of taxation. Technically, the difference is relatively small - being taxed a small percentage of revenue instead of a larger

by mtgx 9y ago

Nothing is really changing in terms of taxation. Technically, the difference is relatively small - being taxed a small percentage of revenue instead of a larger percentage of profit (yes I know it's debatable which would be ideal). The really big difference is they can actually enforce revenue-based taxation, because revenue in a country is directly tied to the number of users/customers in that country. Meanwhile, profit could be much more easily switched around in Google's accounting books, to the point it hardly had to pay any tax in the EU. One other thing, while many are accusing EU of doing this because of "envy", they're ignoring the fact that China is doing way worse against American companies. Not only are foreign companies taxed locally in China, and I don't think they get away with their accounting shenanigans over there, but China also basically demands that 50% of their assets over there are owned by a local company. Can you imagine if the EU said it needs to own 50% of Google or Amazon's assets on EU territory? And then throw in the much larger tariffs for foreign imports that China has. Why isn't the media focusing on that more?

cromwellian 9y ago
People are up in arms about China as well, and IMHO, the US and EU should take them to the WTO over unfair trade practices. But stop focusing on Google for a moment, and consider poor Twitter. Can they really afford this tax? If you're already losing money, or breaking even, why should you have to pay taxes on $$$/user earned in the US or Japan?
- cryptoz 9y ago
  > consider poor Twitter. Can they really afford this tax? If they can't afford a simple tax on their business in a region then they shouldn't be doing business there or at all. What do you mean, "poor Twitter"? It's not a person. It doesn't have emotions or feelings. We don't need to treat it like a poor little snowflake and make sure it never melts. If Twitter can't handle being taxed then Twitter should die. That's capitalism. You don't get to reap the benefits of a region unsustainably and not aide in the development and growth of the region. Twitter in the EU without a tax is a parasite, not a business.
  - BurningFrog 9y ago
    Being taxed to death is not "capitalism". Get a better dictionary!
  - Mononokay 9y ago
    It can be argued that Twitter is less a for-profit corporation and more a public-benefit corporation at this point. Considering most EU officials communicate with denizens on it, and that it arguably costs them a far greater amount than what they'll be taxed for, it's hard to argue that they aren't already really paying tax in a roundabout way, donating computational resources to the EU to maintain stability of the Union at a cost to themselves.
    - nl 9y ago
      Having public officials on their platform is a benefit to them (network effects), and the marginal cost is as close to zero as to immeasurably different.
      - Mononokay 9y ago
        It's a negative to them - loss in quality of discussions on platform, with viewers of these politicians generally using more bandwidth than the host will be able to make up with ad revenue.
        nl 9y ago
        Good luck with that argument.
  - stale2002 9y ago
    > If Twitter can't handle being taxed then Twitter should die. That's capitalism. Alternatively, the US could create retaliatory trade tariffs against these countries. Let the trade wars being. I wonder who will come out on top. Or even better, some of these tech companies could simply ban all users from these countries and point to the new tariff as to why. I wonder how much those voting citizens would like it if they lost access to the most popular social networks, ect for a couple days?
- riffraff 9y ago
  They have, the EU has recently imposed WTO approved import tariffs on Chinese steel, for example
- nl 9y ago
  I’d feel a lot more sympathy for Twitter if they had a functioning sales organisation which would take money. Also an advertising product which worked even a bit. At the moment it is cheaper and gets better results to create bots on their platform than to pay to advertise. I’m not sure that their incompetence should protect them from taxation. Think about consumption taxes. They work in a somewhat similar way.
- mtgx 9y ago
  Okay, let's consider Twitter. So what's this nonsense about having companies run on "break-even" or at a loss for 10 years or more? Especially when these businesses are worth tens of billions of dollars. It doesn't make any sense. In the past, such businesses wouldn't even exist. They would've died by their third or fourth year. Same with Uber, and I think a few other companies (like MoviePass) we've seen recently that basically live off investors' money, price competition out of the market with that money (price dumping, potentially), and then get to have a monopoly on the market. How is any of that "desirable" to have in a market, and something we should strive to enable? And if investors can afford to lose billions of dollars a year in an effort to obtain monopoly power, maybe paying an extra 3% isn't so bad. And before we cry about these multi-billion dollar companies having to be forced to pay 3% tax on revenue, remember that in some countries in Europe even brand-new startups have to pay 3% revenue tax, and it's actually not so bad. It's obviously not ideal from a startup perspective, but it's not a complete show-stopper either. If it's not the end of the world for startups, then I don't think it is for companies worth tens of billions of dollars either. If it is, then maybe they're doing something wrong.

by mtgx 9y ago

cromwellian 9y ago

People are up in arms about China as well, and IMHO, the US and EU should take them to the WTO over unfair trade practices. But stop focusing on Google for a moment, and consider poor Twitter. Can they really afford this tax? If you're already losing money, or breaking even, why should you have to pay taxes on $$$/user earned in the US or Japan?

cryptoz 9y ago
> consider poor Twitter. Can they really afford this tax? If they can't afford a simple tax on their business in a region then they shouldn't be doing business there or at all. What do you mean, "poor Twitter"? It's not a person. It doesn't have emotions or feelings. We don't need to treat it like a poor little snowflake and make sure it never melts. If Twitter can't handle being taxed then Twitter should die. That's capitalism. You don't get to reap the benefits of a region unsustainably and not aide in the development and growth of the region. Twitter in the EU without a tax is a parasite, not a business.
- BurningFrog 9y ago
  Being taxed to death is not "capitalism". Get a better dictionary!
- Mononokay 9y ago
  It can be argued that Twitter is less a for-profit corporation and more a public-benefit corporation at this point. Considering most EU officials communicate with denizens on it, and that it arguably costs them a far greater amount than what they'll be taxed for, it's hard to argue that they aren't already really paying tax in a roundabout way, donating computational resources to the EU to maintain stability of the Union at a cost to themselves.
  - nl 9y ago
    Having public officials on their platform is a benefit to them (network effects), and the marginal cost is as close to zero as to immeasurably different.
    - Mononokay 9y ago
      It's a negative to them - loss in quality of discussions on platform, with viewers of these politicians generally using more bandwidth than the host will be able to make up with ad revenue.
      - nl 9y ago
        Good luck with that argument.
- stale2002 9y ago
  > If Twitter can't handle being taxed then Twitter should die. That's capitalism. Alternatively, the US could create retaliatory trade tariffs against these countries. Let the trade wars being. I wonder who will come out on top. Or even better, some of these tech companies could simply ban all users from these countries and point to the new tariff as to why. I wonder how much those voting citizens would like it if they lost access to the most popular social networks, ect for a couple days?
riffraff 9y ago
They have, the EU has recently imposed WTO approved import tariffs on Chinese steel, for example
nl 9y ago
I’d feel a lot more sympathy for Twitter if they had a functioning sales organisation which would take money. Also an advertising product which worked even a bit. At the moment it is cheaper and gets better results to create bots on their platform than to pay to advertise. I’m not sure that their incompetence should protect them from taxation. Think about consumption taxes. They work in a somewhat similar way.
mtgx 9y ago
Okay, let's consider Twitter. So what's this nonsense about having companies run on "break-even" or at a loss for 10 years or more? Especially when these businesses are worth tens of billions of dollars. It doesn't make any sense. In the past, such businesses wouldn't even exist. They would've died by their third or fourth year. Same with Uber, and I think a few other companies (like MoviePass) we've seen recently that basically live off investors' money, price competition out of the market with that money (price dumping, potentially), and then get to have a monopoly on the market. How is any of that "desirable" to have in a market, and something we should strive to enable? And if investors can afford to lose billions of dollars a year in an effort to obtain monopoly power, maybe paying an extra 3% isn't so bad. And before we cry about these multi-billion dollar companies having to be forced to pay 3% tax on revenue, remember that in some countries in Europe even brand-new startups have to pay 3% revenue tax, and it's actually not so bad. It's obviously not ideal from a startup perspective, but it's not a complete show-stopper either. If it's not the end of the world for startups, then I don't think it is for companies worth tens of billions of dollars either. If it is, then maybe they're doing something wrong.