4 ms·

> According to dw.com, the European Commission estimates that tech firms pay an estimated 9% on profits, as compared to 23% for traditional companies. Why not

by xienze 8y ago

> According to dw.com, the European Commission estimates that tech firms pay an estimated 9% on profits, as compared to 23% for traditional companies. Why not figure out why that is and close whatever loopholes currently exist instead of introducing a targeted tax meant to close that gap?

wukerplank 8y ago
Because the loopholes exist EU wide, but EU legislators failed to collaborate to close them. That's why individual nations try to find ways to level the field. (As an Austrian I'm fairly certain that this has nothing to do with fairness: Everybody hates FB and Google at the moment, so the populists scream for taxation. At the same time Austrian companies who are active internationally get tax breaks.)
- joejerryronnie 8y ago
  >Everybody hates FB and Google at the moment Serious question for OP - do you think this is because people feel these companies are truly doing something wrong or a perception that these companies (and their employees in California/Silicon Valley) are making so much money that it's not fair?
  - desas 8y ago
    It's not that they're making so much money, it's that they're making so much money and not contributing anything back. It's not just tech giants, Starbucks is another corporation that is often targeted for its tax practices.
  - wukerplank 8y ago
    My perspective: Tax for the middle class is insanely high. Seeing companies like FB, Google, Amazon, Apple, etc. pull off insane stunts to "minimize" tax payments (because of their responsibility to the shareholder). They make (and hoard) insane amounts of money without giving back. You might say, "if you don't like them boycott them". For Amazon and Apple it's easy. Google and FB are inescapable if you need to advertise.
    - joejerryronnie 8y ago
      Thanks for your perspective! Is there any local push back on the high middle class tax rates?
      - zeroc8 8y ago
        Another Austrian here. The problem is not the rate per se, but the fact that those tax evasion practices of international conglomerates put local small and medium businesses at an unfair and unjustified disadvantage.
    - puzzle 8y ago
      As an aside, Google has owned land in Kronstorf for a decade. Presumably they pay property tax on it, even if it's not used? https://www.datacenterknowledge.com/archives/2008/11/21/google-confirms-new-data-center-in-austria https://www.datacenterknowledge.com/archives/2008/11/21/goog... Anyway, a little after that came out, I asked someone about the project's timeline. They didn't go into details, but they weren't optimistic. I don't know what has been going on between the two sides, but, ten years later, the land is still undeveloped. In the meantime, Google has built, expanded or announced data centers in Finland, Belgium, Ireland, Netherlands and Denmark. I wonder what separates those from Austria.
hocuspocus 8y ago
"Let's wipe out Ireland's economy" might not be the best angle to solve the issue. It's quite silly, since the EU would probably benefit from a uniform corporate tax rate and closing loopholes that allow the "double Irish". The EU could then afford to compensate the relative loss in Ireland (and a few other places). But this would require moving forward to a federal EU, with a bigger budget and a much greater effort at tax harmonization. Not a very popular idea these days. I think it makes sense that a few countries start on their own, especially big ones (France, Germany, ...) We'll probably see some retaliation against big EU corporations, especially in the US. But I don't think anybody will shed a tear.

by xienze 8y ago

wukerplank 8y ago

Because the loopholes exist EU wide, but EU legislators failed to collaborate to close them. That's why individual nations try to find ways to level the field. (As an Austrian I'm fairly certain that this has nothing to do with fairness: Everybody hates FB and Google at the moment, so the populists scream for taxation. At the same time Austrian companies who are active internationally get tax breaks.)

joejerryronnie 8y ago
>Everybody hates FB and Google at the moment Serious question for OP - do you think this is because people feel these companies are truly doing something wrong or a perception that these companies (and their employees in California/Silicon Valley) are making so much money that it's not fair?
- desas 8y ago
  It's not that they're making so much money, it's that they're making so much money and not contributing anything back. It's not just tech giants, Starbucks is another corporation that is often targeted for its tax practices.
- wukerplank 8y ago
  My perspective: Tax for the middle class is insanely high. Seeing companies like FB, Google, Amazon, Apple, etc. pull off insane stunts to "minimize" tax payments (because of their responsibility to the shareholder). They make (and hoard) insane amounts of money without giving back. You might say, "if you don't like them boycott them". For Amazon and Apple it's easy. Google and FB are inescapable if you need to advertise.
  - joejerryronnie 8y ago
    Thanks for your perspective! Is there any local push back on the high middle class tax rates?
    - zeroc8 8y ago
      Another Austrian here. The problem is not the rate per se, but the fact that those tax evasion practices of international conglomerates put local small and medium businesses at an unfair and unjustified disadvantage.
  - puzzle 8y ago
    As an aside, Google has owned land in Kronstorf for a decade. Presumably they pay property tax on it, even if it's not used? https://www.datacenterknowledge.com/archives/2008/11/21/google-confirms-new-data-center-in-austria https://www.datacenterknowledge.com/archives/2008/11/21/goog... Anyway, a little after that came out, I asked someone about the project's timeline. They didn't go into details, but they weren't optimistic. I don't know what has been going on between the two sides, but, ten years later, the land is still undeveloped. In the meantime, Google has built, expanded or announced data centers in Finland, Belgium, Ireland, Netherlands and Denmark. I wonder what separates those from Austria.

hocuspocus 8y ago

"Let's wipe out Ireland's economy" might not be the best angle to solve the issue. It's quite silly, since the EU would probably benefit from a uniform corporate tax rate and closing loopholes that allow the "double Irish". The EU could then afford to compensate the relative loss in Ireland (and a few other places). But this would require moving forward to a federal EU, with a bigger budget and a much greater effort at tax harmonization. Not a very popular idea these days. I think it makes sense that a few countries start on their own, especially big ones (France, Germany, ...) We'll probably see some retaliation against big EU corporations, especially in the US. But I don't think anybody will shed a tear.