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Banning tax evasion is easy. Just get rid of corporate income taxes and replace it with a sales tax. It's not like corporations pay taxes anyways; their custome

Banning tax evasion is easy. Just get rid of corporate income taxes and replace it with a sales tax. It's not like corporations pay taxes anyways; their customers do as tax is built into the cost of products.

iguy 8y ago
Yup. Tax things which really exist within a country, not accounting fictions (like precisely which arm of a multinational made how much profit). Although I'd also like everyone to stop using the term "income tax" for this. It's a tax on corporate profits, and has nothing at all to do with personal income tax, a tax on wages.
cheerlessbog 8y ago
That wouldn't prevent some of the shenanigans described above. For example, giving my IP away for cheap to a subsidiary in a low tax jurisdiction that actually performs the sale.
- iguy 8y ago
  No, it would, that's the point. If your subsidiary in the Bahamas sells something in France, it pays French VAT.
  - cpursley 8y ago
    Exactly!
lr4444lr 8y ago
... and you ban cash and all ad hoc barter networks. Good luck.
- cpursley 8y ago
  Make cash / ad hoc tax free. Want to avoid tax? Buy used!
fauigerzigerk 8y ago
I see a couple of issues with this solution: 1) Companies would not pay most of their taxes where they put the greatest strain in public infrastructure. 2) Moderate differences in VAT rates would create enormous price differnces, which would invite smuggling. 3) The incentive for rich people to move to low tax destinations would be even greater than it already is. I won't deny that the solution has upsides as well though.
- rayiner 8y ago
  Companies don’t put strain in public infrastructure. They’re legal abstractions. People and their activities (employees, shipping, factories) put strain on the public infrastructure, and they can be taxed (income, real estate, and pollution taxes) at that point. The issue is that when Google shows ads to someone in the UK to monetize a search service used by the UK person, Google uses almost no UK resources.
  - tomatocracy 8y ago
    Exactly. What a lot of governments seem to want is some form of tax on foreign companies for the privilege of gaining access to their local population/market. For physical goods we call that an import duty.
    - fauigerzigerk 8y ago
      They do indeed want that, but what is it that has changed recently that makes this so much more urgent? People claim that digitisation has changed the equation, but I don't understand why. Google is for the most part a regular US exporter. It appears to me that the only thing that has changed is that the US has left everyone else in the dust, which causes envy.
      - Mirioron 8y ago
        Governments need more tax revenue. Almost every country with social programs is on a timer to figure out ways to raise tax revenue to pay for those programs. Almost every developed country has a fiscal gap.
techslave 8y ago
not really. unlike people, corps pay taxes on profit, not revenue. and the issue isn’t evasion. it’s avoidance. which allowance for is intentional by governments for good and bad reasons.
- tomatocracy 8y ago
  Not really, people also pay tax on profit not revenue. Expenses related to business activity can generally be deducted in most places no matter whether you are incorporated or not. It's the basis on which business expenses you claim back from your employer are not taxed and the way unincorporated sole traders and bare partnerships are usually taxed. The rules on what types of expenses are tax deductible are pretty similar. If you incur business expenses which are not repaid by your employer you can usually reclaim tax on them.

iguy 8y ago

Yup. Tax things which really exist within a country, not accounting fictions (like precisely which arm of a multinational made how much profit). Although I'd also like everyone to stop using the term "income tax" for this. It's a tax on corporate profits, and has nothing at all to do with personal income tax, a tax on wages.

cheerlessbog 8y ago

That wouldn't prevent some of the shenanigans described above. For example, giving my IP away for cheap to a subsidiary in a low tax jurisdiction that actually performs the sale.

iguy 8y ago
No, it would, that's the point. If your subsidiary in the Bahamas sells something in France, it pays French VAT.
- cpursley 8y ago
  Exactly!

lr4444lr 8y ago

... and you ban cash and all ad hoc barter networks. Good luck.

cpursley 8y ago
Make cash / ad hoc tax free. Want to avoid tax? Buy used!

fauigerzigerk 8y ago

I see a couple of issues with this solution: 1) Companies would not pay most of their taxes where they put the greatest strain in public infrastructure. 2) Moderate differences in VAT rates would create enormous price differnces, which would invite smuggling. 3) The incentive for rich people to move to low tax destinations would be even greater than it already is. I won't deny that the solution has upsides as well though.

rayiner 8y ago
Companies don’t put strain in public infrastructure. They’re legal abstractions. People and their activities (employees, shipping, factories) put strain on the public infrastructure, and they can be taxed (income, real estate, and pollution taxes) at that point. The issue is that when Google shows ads to someone in the UK to monetize a search service used by the UK person, Google uses almost no UK resources.
- tomatocracy 8y ago
  Exactly. What a lot of governments seem to want is some form of tax on foreign companies for the privilege of gaining access to their local population/market. For physical goods we call that an import duty.
  - fauigerzigerk 8y ago
    They do indeed want that, but what is it that has changed recently that makes this so much more urgent? People claim that digitisation has changed the equation, but I don't understand why. Google is for the most part a regular US exporter. It appears to me that the only thing that has changed is that the US has left everyone else in the dust, which causes envy.
    - Mirioron 8y ago
      Governments need more tax revenue. Almost every country with social programs is on a timer to figure out ways to raise tax revenue to pay for those programs. Almost every developed country has a fiscal gap.

techslave 8y ago

not really. unlike people, corps pay taxes on profit, not revenue. and the issue isn’t evasion. it’s avoidance. which allowance for is intentional by governments for good and bad reasons.

tomatocracy 8y ago
Not really, people also pay tax on profit not revenue. Expenses related to business activity can generally be deducted in most places no matter whether you are incorporated or not. It's the basis on which business expenses you claim back from your employer are not taxed and the way unincorporated sole traders and bare partnerships are usually taxed. The rules on what types of expenses are tax deductible are pretty similar. If you incur business expenses which are not repaid by your employer you can usually reclaim tax on them.