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The idea is to support small companies. I don't see how this would punish small companies at all. Those companies, due to the inability to avoid/reclaim taxes p

The idea is to support small companies. I don't see how this would punish small companies at all. Those companies, due to the inability to avoid/reclaim taxes pay more than 10% now (even with an accountant). I know a lot of companies (a few people large) to pay that much.

AnthonyMouse 8y ago
> Those companies, due to the inability to avoid/reclaim taxes pay more than 10% now (even with an accountant). I know a lot of companies (a few people large) to pay that much. And a 1.5% rate isn't enough to replace those taxes, so it would be paid on top of them. Moreover, revenue taxes disproportionately impact non-vertically integrated smaller companies. Megacorp is vertically integrated, they pay 1.5%. A supply chain containing twelve smaller companies pay 1.5% each, which compounds into nearly 20%.
- BartBoch 8y ago
  Actually, it is. The 1.5% tax rates will bring more than the current system. This is not something made up. This was well researched and whole armies of economists are behind it. More and more countries are considering it. Now megacorps don't pay taxes at all, so what's better?
  - AnthonyMouse 8y ago
    > The 1.5% tax rates will bring more than the current system. Under your current economic structure, surely. But once you make it so that companies can reduce their supply chain's tax burden from ~20% to 1.5% by becoming vertically integrated, what do you expect to happen next? > Now megacorps don't pay taxes at all, so what's better? Option one is income tax at e.g. 20%, local companies pay 20% while megacorps pay ~0%. Option two is revenue tax at e.g. 1.5%, non-vertically integrated companies cumulatively pay ~20% while megacorps pay 1.5%. Option three is something like 20% DBCFT, so that everyone who sells domestically pays 20%. This is the better option. Arguing that two is better than one is a false dichotomy that preserves most of the bad consequences of existing system (multinational megacorps pay less than others) while introducing some new ones (highly advantageous to become a vertically integrated conglomerate).
    - BartBoch 8y ago
      I am surprised about you saying it would be 20% for small business. What (optimized) market requires for a raw source to change hands 13 times before it is a final product (mind that we are talking small business here). The revenue tax would force the market to optimize and become more competitive. And even if megacorps would grow vertically - that's OK, since this would force them to grow locally, take parts of the market and optimize it. It's a win-win. I also don't think DBCFT would work in an OPEN market like EU. Your opinion seems very US-oriented, while this thread is about EU. The EU rules and tax system is completely different to US and it cannot be compared. DBCFT could work if the issue would be EU vs World, not EU within.
      - AnthonyMouse 8y ago
        > What (optimized) market requires for a raw source to change hands 13 times before it is a final product (mind that we are talking small business here). That is how many things work. One company sells saplings, another operates a tree farm, another logs the trees and transports them to the sawmill, another operates the sawmill, another distributes the bulk lumber to wholesalers in different cities, another operates warehouses and wholesales the lumber to local businesses, another shapes the lumber into custom forms, another assembles the custom lumber into unfinished furniture, another finishes and paints the furniture, another wholesales the finished furniture, another packages the furniture into prepackaged furniture sets, another retails the furniture sets, and then finally the end customer buys it. This is not inefficiency, it's specialization. Operating a sawmill is not the same skill set as retailing prepackaged furniture sets. > The revenue tax would force the market to optimize and become more competitive. It would force the market to vertically integrate and become less competitive. > And even if megacorps would grow vertically - that's OK, since this would force them to grow locally, take parts of the market and optimize it. Megacorps don't have to grow vertically, they already are. It's why the tax gives them an advantage over local businesses that aren't. And they wouldn't to do so locally. They could just show up with an imported finished product and retail it directly themselves. > I also don't think DBCFT would work in an OPEN market like EU. DBCFT is basically VAT. The primary difference is that local wages are deductible. It does not seem like a real problem to allow for "local wages" to mean anywhere within the EU rather than only in the sale destination country. Or to just use VAT instead if you like, though the wage deduction from VAT does seem like a good idea in general (since wages are already taxed to the employee and double taxing employment is undesirable). > The EU rules and tax system is completely different to US and it cannot be compared. If you're designing new tax rules, you can compare the new rules to whatever you want. The EU could implement the US system verbatim or vice versa if they wanted to and had the votes.

AnthonyMouse 8y ago

> Those companies, due to the inability to avoid/reclaim taxes pay more than 10% now (even with an accountant). I know a lot of companies (a few people large) to pay that much. And a 1.5% rate isn't enough to replace those taxes, so it would be paid on top of them. Moreover, revenue taxes disproportionately impact non-vertically integrated smaller companies. Megacorp is vertically integrated, they pay 1.5%. A supply chain containing twelve smaller companies pay 1.5% each, which compounds into nearly 20%.

BartBoch 8y ago
Actually, it is. The 1.5% tax rates will bring more than the current system. This is not something made up. This was well researched and whole armies of economists are behind it. More and more countries are considering it. Now megacorps don't pay taxes at all, so what's better?
- AnthonyMouse 8y ago
  > The 1.5% tax rates will bring more than the current system. Under your current economic structure, surely. But once you make it so that companies can reduce their supply chain's tax burden from ~20% to 1.5% by becoming vertically integrated, what do you expect to happen next? > Now megacorps don't pay taxes at all, so what's better? Option one is income tax at e.g. 20%, local companies pay 20% while megacorps pay ~0%. Option two is revenue tax at e.g. 1.5%, non-vertically integrated companies cumulatively pay ~20% while megacorps pay 1.5%. Option three is something like 20% DBCFT, so that everyone who sells domestically pays 20%. This is the better option. Arguing that two is better than one is a false dichotomy that preserves most of the bad consequences of existing system (multinational megacorps pay less than others) while introducing some new ones (highly advantageous to become a vertically integrated conglomerate).
  - BartBoch 8y ago
    I am surprised about you saying it would be 20% for small business. What (optimized) market requires for a raw source to change hands 13 times before it is a final product (mind that we are talking small business here). The revenue tax would force the market to optimize and become more competitive. And even if megacorps would grow vertically - that's OK, since this would force them to grow locally, take parts of the market and optimize it. It's a win-win. I also don't think DBCFT would work in an OPEN market like EU. Your opinion seems very US-oriented, while this thread is about EU. The EU rules and tax system is completely different to US and it cannot be compared. DBCFT could work if the issue would be EU vs World, not EU within.
    - AnthonyMouse 8y ago
      > What (optimized) market requires for a raw source to change hands 13 times before it is a final product (mind that we are talking small business here). That is how many things work. One company sells saplings, another operates a tree farm, another logs the trees and transports them to the sawmill, another operates the sawmill, another distributes the bulk lumber to wholesalers in different cities, another operates warehouses and wholesales the lumber to local businesses, another shapes the lumber into custom forms, another assembles the custom lumber into unfinished furniture, another finishes and paints the furniture, another wholesales the finished furniture, another packages the furniture into prepackaged furniture sets, another retails the furniture sets, and then finally the end customer buys it. This is not inefficiency, it's specialization. Operating a sawmill is not the same skill set as retailing prepackaged furniture sets. > The revenue tax would force the market to optimize and become more competitive. It would force the market to vertically integrate and become less competitive. > And even if megacorps would grow vertically - that's OK, since this would force them to grow locally, take parts of the market and optimize it. Megacorps don't have to grow vertically, they already are. It's why the tax gives them an advantage over local businesses that aren't. And they wouldn't to do so locally. They could just show up with an imported finished product and retail it directly themselves. > I also don't think DBCFT would work in an OPEN market like EU. DBCFT is basically VAT. The primary difference is that local wages are deductible. It does not seem like a real problem to allow for "local wages" to mean anywhere within the EU rather than only in the sale destination country. Or to just use VAT instead if you like, though the wage deduction from VAT does seem like a good idea in general (since wages are already taxed to the employee and double taxing employment is undesirable). > The EU rules and tax system is completely different to US and it cannot be compared. If you're designing new tax rules, you can compare the new rules to whatever you want. The EU could implement the US system verbatim or vice versa if they wanted to and had the votes.