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Just like how China doesn’t pay the tariff, it’s US importers who do, in this case Facebook doesn’t pay the tariff, it’s Canadian advertisers that would, on top
by lstamour 7y ago
Just like how China doesn’t pay the tariff, it’s US importers who do, in this case Facebook doesn’t pay the tariff, it’s Canadian advertisers that would, on top of whatever Facebook is asking for. It would only hurt Facebook if you applied a fine or tax directly to their Canadian profits or prevented them from doing business in Canada, and even then... with other countries, the sway is, “you’re a citizen of our country, you have to follow the law, it’s easier that way” but if you’re not actually a citizen, have legal defense and possible substitutions in place, and ultimately, the only penalty is likely a slap on the wrist and a request you somehow further can’t ignore, well... it comes back to other countries on their own don’t have sway if the US or host nation doesn’t make the same request and you don’t have immediate travel plans to that country (and, of course, the country follows rule of law and/or you’re protected by your host country’s legal system...) That said, anyone in the country making such a request that works for an affected company would have to follow the laws of that host country over company dictates, or face legal consequences...
- reasonablemann 7y agoAnd Canadian advertisers might choose a cheaper alternative to FB as a result.
- lotsofpulp 7y agoSeems like a win for Canadian Facebook users as they would get to see fewer ads.
- sjwright 7y agoWell they’d see fewer local ads.
- ThrustVectoring 7y agoMany taxes can get passed onto the buyer of the taxed good, but I'm not convinced that digital advertising is one of them. Roughly speaking, digital advertisers like Facebook and Google end up selling 100% of their inventory of views at a price set by the value of the conversions driven to the ad buyers. Adding a tax in this model forces advertisers to lower bids in order to remain profitable, which then forces the advertising platform to lower prices to continue selling 100% of their inventory. This is the same economic modeling behind the incidence of land-value taxes falling on landlords, not renters. When you're taxing a product of fixed size that is priced at whatever the market will bear, taxes get taken out of the owners' economic rents.
- lstamour 7y agoThis logic assumes transparent pricing and that bids from international companies not subject to the tax won’t take over Canadian bids forcing prices back up to where they were... and I bet multinational organizations would avoid the tax by having US services bid for them. If the tax is on ads shown to Canadians rather than ads paid by Canadian companies, I don’t see how the government can force it short of banning Facebook altogether.