19 ms·

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service.

by bko 7y ago

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skills to the worker. But the idea that a company like Amazon owes some tax to France doesn't make sense. Sure the delivery person uses the roads, but they pay the gasoline tax and the delivery company pays taxes. What public resources did Amazon, a US company, use from France? The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. The other argument is that the government should "level the playing field". But again arbitrarily punishing or helping some corporations opens up the possibility of corruption and corporate meddling as corporations look for favors. Much of the edge Amazon has versus local retailers is that it is more efficient. It doesn't take up store space (and pay taxes on the land) and it doesn't have to hire a lot of local workers (and pay taxes on their salaries). It's simply more efficient and its services are appreciated by the consumers.

Vinnl 7y ago
> What public resources did Amazon, a US company, use from France? Digital infrastructure, anti-poverty programs that mean potential customers still have something to spend, financial infrastructure, legislation, ...
- deleted 7y ago
  [deleted]
- tzs 7y ago
  Shouldn't that be covered by the 20% VAT that Amazon pays on goods and services sold to entities in France?
  - bryanlarsen 7y ago
    Is VAT paid when Google shows an American ad to a French person? The tax is on "digital services". It's unclear if the tax is on physical services from digital companies.
  - Renaud 7y ago
    No. VAT is basically a tax paid by people. Companies don’t really pay VAT, they collect it from the end-customers and pass it to the state. Relying on VAT alone skews the burden of financing the state on the people only, which means no participation from the companies that make money without directly contributing to the country’s expenses they benefit from. It also disproportionately disadvantages companies that also employ people and have a physical presence in France and have to pay taxes.
    - liber8 7y ago
      ...Who do you think ultimately owns these companies? Something besides people?
      - AnthonyMouse 7y ago
        Not only that, what makes you think corporate tax is paid only by shareholders rather than customers and employees? A business needs capital to get started -- otherwise the founders wouldn't have to give ownership stakes to capitalists. But the capitalists also have the option to put their money in real estate or bonds or companies that sell to other countries etc. A company has to beat the after-tax ROI of those things in order to raise the money it needs -- so if the taxes go up, the ROI goes down, and they need to squeeze somebody else for the rest of the money, like customers and employees. Which, when it happens to every competing business in your country, they can do since no one can undercut them for the same reason they can't charge any less or pay employees any more and still raise capital -- everyone now has higher capital costs. The capitalists can move their money to an investment in another country more easily than the customers and employees can move around, so who eats the cost? Ah ha, you say, but what about the companies that are no longer raising capital? Facebook is an established business. They don't need to raise any further capital, so their capital costs are irrelevant and we can tax those foolish capitalists who invested in them without expecting us to raise their taxes just as they were starting to see a return on their high risk investment. Which is true, except that you just convinced investors that it's not worth investing in a prospective competitor and have thereby entrenched Facebook's market position. Oops.
tachyonbeam 7y ago
In the case of Amazon there's a clear protectionist argument to be made. It will kill local businesses and send a bigger share of the profit to an American company. Replace jobs in those small independent businesses by underpaid corporate jobs at Walmart 2.0. Amazon is in a position where it can sell items at a loss for years just for the sake of killing small competitors. Granted, maybe it's the role of antitrust laws to take care of that rather than taxes, but I'm generally in favor of slowing down Amazon, if only to give other players a chance to grow before Amazon takes everything. The problem with antitrust laws is that they will come and slap Bezos with a tiny fine 3 years after Amazon has unfairly killed competitors. If you want to tax and regulate Facebook, etc., I think the argument is much less clear, especially if those regulations are just going to cement Facebook's position against possible newcomers.
- 99052882514569 7y ago
  Rather than focusing on a particular company (Amazon) or even a particular industry (retail), they're addressing a more fundamental problem - digital businesses using arbitrage to virtually "move" profits around and minimize corporate income tax - something that's inherent to their business model and creates an (allegedly) unfair advantage.
bryanlarsen 7y ago
"What public resources did Amazon, a US company, use from France?" off the top of my head, I'm sure there are lots more: - a large set of well-off consumers who got there because of free public education, parental supports, et cetera - a safe society so drop shipping is possible - roads & infrastructure for shipping - a justice system that protects Amazon from cheating buyers and sellers - a stable, accepted currency - no need for large numbers of armed guards at warehouses, protecting shipments, et cetera - a functioning health & welfare system so can get away with paying employees & contractors peanuts - a pool of employees and contractors who were supported by society growing up and much more, I'm sure.
- buboard 7y ago
  All of those can be applied to any company however. By this logic, they should add a +3% tax on every foreign business. None of this is true. It is a protectionist / anti-tax evasion measure primarily. It can be justified considering the threat that amazon poses in local markets
  - SiempreViernes 7y ago
    I don't know why you just ignore to comment on the justification given: that big tech companies engage in blatant tax evasion.
    - buboard 7y ago
      not sure what you mean
      - rtkwe 7y ago
        Double Irish with a Dutch Sandwich. Companies like google can charge their profitable branches in other countries royalties to use Google software or platform moving the profits out of a higher tax country like France into Ireland where there's little to no tax. Even after they patched the Dutch part that allowed even the marginal Irish taxes to be avoided companies can still artificially lower their profit by transferring IP to an Irish company and charging for it's use. https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp https://www.investopedia.com/terms/d/double-irish-with-a-dut...
ripdog 7y ago
Those large tech companies can make money in France because the french government provides all that is necessary for a free, fair and functioning market. How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? All money made on the white market in any country is facilitated by that government, and taxes are paid on all profits to pay for the services which allowed the profit to be made. >The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. It's not arbitrary to expect businesses to pay for services they benefit from.
- bko 7y ago
  > All money made on the white market in any country is facilitated by that government, and taxes are paid on all profits to pay for the services which allowed the profit to be made. So any taxation is justified? > It's not arbitrary to expect businesses to pay for services they benefit from. Any digital company with revenue of more than €750m ($850m; £670m) - of which at least €25m is generated in France - would be subject to the levy. That sounds arbitrary.
  - oeoeo00 7y ago
    Welcome to social rule making. All of it based upon what’s agreeable to the negotiators. Was just reading about term limits in the Constitution are set at a number the decision for which was negotiated by those invited to the party. Absolutely no argument given at the time addressed age or anything real. Just how many 4 year terms they felt was long enough. It’s the same with all cultural laws and norms.
  - i_am_proteus 7y ago
    'Progressive' taxation (taxing higher individual incomes at higher rates) seemed arbitrary when it was introduced, too.
  - dclowd9901 7y ago
    > So any taxation is justified? Yes. We have income tax in the US. It's the same thing. Google doesn't have to pay the tax if they're not operating in the country. It says right there that if their revenues are +$25m a year, they are subject to the tax. Conversely, the US can also levy taxes against French digital services, and maybe they should. My guess is the cost of not operating in France is much higher than the tax to do so, so that would be a silly maneuver. Tangentially, I find it hilariously hypocritical that the Trump administration is whining about unfair tariffs on digital services.
dcolkitt 7y ago
> The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. Economists have known for 100 years that land value taxes (LVT) are by far the most efficient way to raise taxes. After that consumption taxes are the next most efficient. Corporate taxes and taxes on investment income are one of the least efficient, most distortionary, forms of taxation. Yet policymakers and voters show no sign of changing their opinions, despite how much economic evidence continues to pile up. LVTs are extremely unpopular, because home ownership is fetishized by the middle class as a vehicle for wealth accumulation. Even in progressive polities like California, there's always tremendous political will to keep residential property taxes artificially low. VAT taxes are almost just as despised, especially in America. Meanwhile higher corporate and investment taxes are supported by large majorities. Despite the fact that they impose serious drags on productivity and growth. If your goals is having a more progressive tax code or increasing income equality, the much better strategy is to combine high LVT/VAT taxes with a UBI, rather than explicitly try to target poorly designed tax schemes at rich people.
- 99052882514569 7y ago
  > If your goals is having a more progressive tax code or increasing income equality, the much better strategy is to combine high LVT/VAT taxes with a UBI, rather than explicitly try to target poorly designed tax schemes at rich people. Effectiveness of UBI is still an area of much debate and research. Early results of this research based on a few pilots is decidedly not positive.
- nostrademons 7y ago
  Much of this is because of information distortion - when the state directly collects an LVT from homeowners or a VAT from consumers, every individual citizen is aware of that tax and feels the pain of it. When they collect a tax from corporations, only the corporation feels it as a tax, and they raise their prices to compensate for losses from it, and the consumer instead sees it as simply the price of goods. The consumer has no information for what things would have cost without the tax, so they simply accept it as how things are. Meanwhile, the beneficial effects of an LVT or VAT all appear in reduced opportunity costs (the price of housing comes down, the prices of consumer goods more truly reflect supply & demand), so they're completely unaware of them. It makes me wonder, now that cryptocurrency is a thing, if fiscal policy could be embedded directly in the monetary system. Rather than a separate tax that's charged and remitted to the treasury, it'd simply be the difference between what a consumer spends and what a producer receives, much like how transaction fees come straight out of the transaction.
99052882514569 7y ago
>I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. There's nothing arbitrary here, in fact they're attempting to partially address a perverse incentive to take all your business online and do some jurisdiction arbitrage to minimize corporate taxes. This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris that's trying to compete online. Taxes are not just about revenue, they are often about changing incentives (for the better if used well, for the worse if used without regard for unintended consequences). >Much of the edge Amazon has versus local retailers is that it is more efficient. Much, but not all. This addresses an additional edge Amazon has versus local retailers.
- jtx22 7y ago
  Who says we even need brick and mortar anything? Why would the government artificially support that way of delivering goods and services?
- weberc2 7y ago
  I'm trying to follow the argument in good faith, so bear with me... > This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris that's trying to compete online. Are you sure it's "an unfair advantage" and not just "an advantage"? Doesn't your position presume that the brick-and-mortar business model deserves special protection? If so, why? If not, what then is unfair about "jurisdiction arbitrage". > Taxes are not just about revenue, they are often about changing incentives What is the implied incentive in this case? It seems like it's just incentivizing a brick and mortar business model, but it's not clear why this is inherently virtuous. > This addresses an additional edge Amazon has versus local retailers. Doesn't this all point to a fundamental problem with "corporate tax"? Wouldn't it be better (fairer) to reduce or remove corporate tax and raise sales tax or similar, such that it doesn't matter whether the business has a presence in the country in question? I'm not very knowledgable about the topic, so I'm hoping someone can set me straight.
  - 99052882514569 7y ago
    >Are you sure it's "an unfair advantage" and not just "an advantage"? Doesn't your position presume that the brick-and-mortar business model deserves special protection? If so, why? Because it employs more people and pays taxes locally. It's perfectly valid for the government to ignore that and focus solely on the consumer side (i.e. minimize prices), but it's also perfectly valid (and economically sound) to do what France is doing. >What is the implied incentive in this case? It seems like it's just incentivizing a brick and mortar business model No, it is not incentivizing it. It levels the playing field a bit by applying more consistent taxation. >Doesn't this all point to a fundamental problem with "corporate tax"? Wouldn't it be better (fairer) to reduce or remove corporate tax and raise sales tax or similar, such that it doesn't matter whether the business has a presence in the country in question? I can be persuaded by that argument (economists do love consumption taxes for a reason, after all), but either way it's not for Amazon to decide. In France, it is for the French people to decide, via their representatives. Whatever positive or negative consequences arise are also theirs to bear.
alwayseasy 7y ago
Even staying with the framework of "public resource use". They benefit from the attractive market created by the country. An educated, safe and healthy population with high bandwidth internet with disposable income ready to buy on Amazon.
mikeash 7y ago
The idea behind taxes is that society needs government and government needs money, that’s it. Some taxes are connected to the use of specific public resources, but many are not. What do my income taxes pay for? The answer is basically “everything.”
michaelmrose 7y ago
The actual principle behind taxation is that we siphon some money off to pay for the common needs because the free market is great at allocating the correct number of shoe stores to a town and worthless at making it possible to live in that town. Taking from foreigners so long as it isn't so much that they are discouraged from doing business is a plus in that it increases the welfare of your people at the expense of the other guys people. This is the actual theory of taxation and everything else is after the fact justification.
bagacrap 7y ago
> I never understood the logic behind taxing large internet businesses. > The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skills to the worker. Taxation is used to encourage activities the govt thinks are beneficial to society, and discourage activities that are detrimental. In the US, married couples and those with children get tax breaks. This in spite of the fact that children use government services, accruing greater public costs. However the powers that be find it beneficial to encourage marriage and family building, I suppose because it hypothetically leads to greater stability and encourages more long term participation in the economy (can't quit your job and travel the world if you have kids to support). So in short yes, the government can and does tax (or exempt from tax) whatever or whoever it wants, within the limits of the country's constitution and their courts' interpretation thereof. There is no requirement that it be directly correlated to a service the government provides. Leveling the playing field wrt the inherent advantages that a large tech firm benefits from (economies of scale) does seem to be within the reasonable purview of a government which wants to protects its constituents from a tendency of the free market towards monopolization. This tax encourages competition by smaller players, which keeps Amazon honest. It is only not necessary if you trust Amazon to always act in the best interests of the consumer even after stamping out all competition.
- dhshahsndeisjwn 7y ago
  >(can't quit your job and travel the world if you have kids to support). I think the real reason is that there will be someone to look after you when you're old and sick.
deleted 7y ago
[deleted]
cma 7y ago
> I never understood the logic behind taxing large internet businesses. Why have 20% of Taxi revenue (or whatever it is) leave the country if basically all of the service is provided in country, and the internet taxi company takes the large cut over a sustained period through a combination of first-mover advantage an network effects? (Not that that's what's going on completely in the case of ride sharing, as Uber may still be subsidizing things at this point) For other things it doesn't make sense, but in the case of many of these companies it is basically just citizens banding together through democratic decision making to not get taken advantage of through network effects that lock in certain services and shield them from competition.
- weberc2 7y ago
  > Why have 20% of Taxi revenue (or whatever it is) leave the country if basically all of the service is provided in country, and the internet taxi company takes the large cut over a sustained period through a combination of first-mover advantage an network effects? Because the value proposition for a service like Uber is the technology to efficiently broker transactions between riders and drivers (and hopefully we can avoid the predictable digression that this brokerage is trivial). The aforementioned 20% pays for that technology while the other 80% pays for the cost of the ride (the driver's time, fuel, car mileage, etc). Also, I don't think the first-mover or network effects are particularly strong in the case of Uber. I have a hard time believing that the overwhelming majority wouldn't jump ship immediately if a competitor arrived on the scene who could offer better fares for customers and/or better rates for drivers. By comparison, an upstart Facebook competitor wouldn't be able to compete even if they could "outprice" Facebook (I guess "outprice" would be "better data privacy" in this example) because Facebook's product is the network. Of course, being able to compete with Uber (i.e. offering better rates/fares) is still prohibitively hard for most upstarts, but that's different than first-mover or network effects.
chewz 7y ago
The logic behind taxation is that if governments are able to extract money from any activity without causing a revolution or foreign invasion they do it. I doubt French people will revolt against taxing Google or US Marines will invade France.
globuous 7y ago
I think it comes down to economic warfare. The us abuses it with its allies and thats just retaliation. Herés a video in french explaining it better than i can: https://m.youtube.com/watch?v=dejeVuL9-7c https://m.youtube.com/watch?v=dejeVuL9-7c Maybe YT knows how to translate live ? (Nlp + gtranslate ?) My point is: in order to understand this chess move (and judge for yourself whether its a smart one or not), you have to understand the previous moves on the board (from « allies » and « ennemies », or just « economic partners » as de gaulle would say).
- pyrale 7y ago
  > So, they're imposing a tax on companies that serve French customers via the internet but aren't based in France The Alstom case (and, to a larger extent, the US justice system jurisdictional overreach) was really something ugly, I don't really believe it's even remotely comparable to this situation.
scarejunba 7y ago
Nah, that’s overthinking it, I think. States are also like participants in a market. In exchange for access to French citizens, France charges some people some amount. It’s really no different from what Facebook charges you for running an ad on their platform. It’s decoupled from cost because it’s not about cost.
bitwize 7y ago
The idea behind taxation is "the government needs money to function, and it alone has the authority to take it by force". Anything else is a post hoc justification.
- rb808 7y ago
  Yeah I think Americans often look for economic incentives behind policy and think taxes are carefully chosen. Most Europeans know basically if there is money there it'll get taxed sooner or later.
- ahje 7y ago
  Exactly. The French government decided that businesses should be taxed for profits made from French consumers. Some businesses found a loop hole using the laws of other EU countries to avoid paying those taxes, and now the government of France decided to plug that loop hole simply because they have the will and the way. There's not really anything else to it.
celticninja 7y ago
Amazon delivers stuff to my house. It uses all the local government run resources, like roads, to carry out that business.
- jpadkins 7y ago
  Amazon does not deliver packages. A local delivery company in France does. They pay local taxes (corp, gas, etc) which are passed on to Amazon when Amazon pays for shipping.
pgcj_poster 7y ago
> The idea behind taxes is that you use some public resource and you pay for that service. That's pretty clearly not the operative principal behind most taxation. Even the examples you gave mostly contradict it: if the point were to make people pay for services they use, then public schools would just charge tuition. As for gasoline taxes, I mostly hear politicians discuss them as an environmental measure; it never even occurred to me that they could be a fee for using roads. And that's not to mention things like income taxes, where the the poor, who use the most public services, pay the least. > The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework… This seems like a very radical position. "x should be done by the best means possible" is almost a tautology. Can you explain what you mean? I think that France should levy any taxes that would benefit its people. Some taxes are bad, because eg. they hurt the economy enough to outweigh the benefit of increased revenues. In other cases, it's the reverse. In any case, what matters in the end is the public welfare. Do you disagree?
braythwayt 7y ago
With respect, you do not understand the logic behind taxes, much less the logic behind taxing international businesses. > The idea behind taxes is that you use some public resource and you pay for that service You are framing taxes as if the government is a business selling people health care, fire protection, security, and infrastructure. I benefit from infrastructure I don't personally use. For example, even if I am a healthy individual, I benefit from healthcare! Healthy people get and keep their jobs, get paid, and spend their money on Netflix, Uber, Lyft, and/or Disney. Lemme look... Yup, Netflix, Uber, Lyft, and Disney are all customers of my employer, who pays me, so I benefit indirectly from Healthcare. That is one tiny example, but the actual principle behind taxation works this way: Everyone benefits indirectly from a functioning society. (We sometimes tax people just for the things they use, but generally we do this to limit undesirable "tragedy of the commons" problems. Consumption taxes, vice taxes, and the issue of regressive taxation is outside the scope of this reply.) The idea behind taxation is that everyone benefits, therefore everyone pays. Now we are talking about a company located outside of a country, benefitting from that country being a functioning economy. Just as I benefit from infrastructure I don't use because I benefit from my country having a thriving, healthy populace with disposable income, so does the company selling things to the exact same populace. Now just move this such that we are discussing France instead of Canada, and there is the actual logic: These internet companies benefit from France having a functioning economy with a populace that has disposable income to spend, so they should support that by paying taxes. In sum, the flaw in your explanation begins with your model for why people and corporations pay taxes in the first place, and how they benefit from those taxes.
- AdrianB1 7y ago
  The flaw of this argument that government is selling services is that the government is not selling, it is forcibly collecting money for some vague promises of services. When you buy something in the store the owner doesn't point a gun at your head asking for the money.
  - braythwayt 7y ago
    Your reply is a great example of why talking about taxes in an open forum is often a waste of time. We start with a discussion about whether this one particular tax is reasonable or unreasonable because of jurisdiction issues, and before long you realize that a bunch of the people arguing against that tax don't really care about the jurisdiction issue, their real agenda is that they don't want any taxes, any governments, or any societies. You are entitled to your beliefs, of course, but you really shouldn't respond to me. You should just post at the top level that not only should France not tax internet giants, but it shouldn't tax its citizens or anyone else.
hazza1 7y ago
Pretending you're based in Switzerland or some other tax haven to avoid local sales tax gives you a massive advantage over national companies.
beowulfey 7y ago
You don't understand it because it is strictly a philosophical difference of yours. You operate in the paradigm of taxation == fees or penalties imposed on people and corporations by the goverment. It is seen as strictly a negative thing. The opposite idea is that taxation is an /investment/ by corporations and individuals, directed and designed by the government, to allow society to keep running smoothly. You may not always see the effects as they often are indirect, but they are important. The difficulty for most Americans is seeing taxation as a long term benefit rather than as a penalty, as no one is able to look past the fact that they feel forced into paying them.
- AdrianB1 7y ago
  Taxation is mandatory and evading taxation is punished by prison in most cases. Investments are optional and not investing does not carry prison sentences. It's the same difference between consensual sex and rape: the consent.
- wonder_er 7y ago
  I don't "feel" forced into paying them. I AM forced into paying them. > no one is able to look past the fact that they feel forced into paying them. This is rather dismissive of a broad category of valid complaints a group feels. The US Government uses tax revenue to fund many things, but some of those things are horrifically misguided wars and a global military empire. is that global military empire an investment? If I had the _option_ of contributing money to the US military, I would never pay a penny to it. Do the benefit of these "investments" to keep (USA) society running smoothly outweigh the millions of lives lost to misguided wars over the last 50 years? I'd say no. It's unethical for me to elevate my _possibly_ elevated standard of living over the lives lost and ruined via the Vietnam war, Afghanistan war, Iraqi war, and countless other instances where the US military has ruined communities and countries.
  - rorykoehler 7y ago
    Whether you feel forced or not has little to do with whether you are forced to or not. I don't feel forced to even though I am because I understand and appreciate what I get in return. I would want to pay for these things anyways if taxation didn't exist. I agree on the war front but that can only be changed from within and would exist with taxation or not only without taxation it would be a far more violent experience for you.
tomc1985 7y ago
The reasoning is much simpler than that... the house wants its rake, that's it
Bombthecat 7y ago
You don't like those taxes? Go to China. They steal your stuff without any chance of a legal battle? Well... There is your reason for those taxes.
08-15 7y ago
You misunderstand. The purpose of taxation is to take away the ill-gotten gains of the rich and redistribute them to the oppressed poor. Because, you see, all humans are equal, so if one is richer than another, he must have become rich by exploiting someone else. Well, that's taxation in Marxism. And to an increasing extent, in the European Union. And no, I'm not making this up; the socialists (whether they call themselves The Left, Green or Social Democrats) explicitly state it in those terms.
- dang 7y ago
  Please don't take HN threads on generic ideological tangents. It's against the site guidelines because it makes all discussions the same and nasty. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
ljm 7y ago
As much as I loathe to word it way, the public resource is the French citizen. Or, the citizen of the country. If Amazon bypasses it with gig economy logic then they are depriving the country of tax they would have paid through traditional means. Amazon owes tax to France for as long as it maintains a workforce out there. They shouldn’t be able to dodge it by treating employees as contractors or having offices in Luxembourg.
- AdrianB1 7y ago
  Amazon is paying taxes for the employees in France; when using contractors, the contractors pay their taxes there. This law is about something else.
noncoml 7y ago
That's not how taxes work. Government is not a corporation that you pay for using it's resources/services.
forty 7y ago
It's simple, in France there is this idea that everyone should contribute to "national solidarity" according to how much they can afford. Internet giant are very rich so they should contribute a lot, and currently there is a sentiment that they don't contribute as much as they should, so this law is simply starting to fix that.
- bacon_waffle 7y ago
  And it's a bit rich that, at the same time the US is unhappy with France france over this, the US is imposing on the French economy via FATCA and FBAR.
ska 7y ago
Your stated view of taxation is oversimplified. Certainly some taxes can be viewed as fee-for-service, others are protectionist or strategic, or otherwise effect policy. If you want a simplified version, you are better off thinking of it something like this: The purpose of taxation is to capture a fraction of the economic activity and use that to fund the business of government. (this doesn't capture explicit redistribution, but keeps it simple)
robertAngst 7y ago
> But again arbitrarily punishing or helping some corporations opens up the possibility of corruption and corporate meddling as corporations look for favors. Like it or not, but this is designed into politics. Its just as dirty and evil as it sounds.
lultimouomo 7y ago
> The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. It seems like you're contradicting yourself: why would you fund schools just because you own a property? By your reasoning, you should have a children tax, not a property tax.
Pfhreak 7y ago
> The idea behind taxes is that you use some public resource and you pay for that service. This is not the idea behind taxes at all. There are plenty of services I don't use, but still believe should be funded by the government because they ensure a healthy society or because they care for our most at risk.
londons_explore 7y ago
The thing the taxation is paying for is the French marketplace. That place which is defended by the army, and wouldn't exist without schools, hospitals, and other services.
rorykoehler 7y ago
I'm not really sure it is the role of countries to enrich American shareholders at the expense of their own populace.
tzakrajs 7y ago
Maybe France subsidizes it's telecommunications industry with monetary or anti-competitive advantages and so in return it wields greater control over the taxation of its products?
harry8 7y ago
Totally. Don't tax them. They don't need it. The don't need property rights either. No legal redress. Access to the economy enabled by having a stable, democratic system? Well they probably should only be allowed to have the customer base they would have if life expectancy was around 50 due to cholera and so on and that part of disposable income that remains when everyone is sick all the time. Contracts aren't binding to their counter-parties. And they are banned from hiring anyone who is educated. They can treat their own water, and put in their own plumbing systems, based on market rates for doing that themselves. But then how do you deal with national defence contributions because obviously not being invaded is kind of useful. National parks? Well while the company doesn't use them, the people who make up the company do and user pays can't work for that. But even if individual people don't use them, they get to live in a place where people are happier because national parks exist. Do I need to go on with this? They literally make zero profit and in fact can't exist at all without tax being paid. Tax cheats just want to cheat the system and make someone else pay while they reap the benefits. Cheating is cheating.
xbmcuser 7y ago
If Amazon is so efficient it will still be competitive against local retailers when the local retailers and Amazon have to pay the same sales tax. Which actually is not Amazon or Local retailers paying but the customers they just have to collect it.
asdfasgasdgasdg 7y ago
> The idea behind taxes is that you use some public resource and you pay for that service. IMO this is a fundamental misapprehension. The idea behind taxes isn't to compensate the state for resources consumed. The idea is that the state can tax you, so it does, to use that money for whatever its priorities are. This is kind of a "purpose of a system is what it does" viewpoint on taxation, but I think it's also the most accurate. If you look at it from any other perspective, you're going to see weird inconsistencies like rich people paying more than they consume, deductions that don't match corresponding benefits provided to the public, etc.
davesmith1983 7y ago
They want silicon valley out of Europe. The European Union have wanted this for a long time.
cryptica 7y ago
Corporations are terrible for many reasons. - They have a monopolostic unfair advantage over some market which means that they can be very innefficient and still survive. They hinder real innovation. - As stated in the article, they often pay little to no tax because of their accounting practices; they get all the legal benefits of being treated as an independent entity under the law but none of the costs. - They are constantly lobbying politicians to change the laws to benefit them at the expense of tax payers. - As a consequence of being well promoted on various stock markets, corporations tend to get a lot of easy money from investors; these investors include large 401k and superanuation funds which invest money into stocks without the knowledge of the regular working people whose salaries are paying for it. A lot of the new money which the Fed creates goes straight to corporations because of this. - Corporations are also bad because they hurt free speech and they have the power to manipulate the elections by coercing their employees. The people who control corporations think in black and white and simplistic terms. They think they have all the answers to our socioeconomic problems. They don't understand that they are the problem. They don't understand that fairness is very difficult to achieve and that huge centralized power concentrated in the hands of a tiny number of financially incentivised decision makers opens up massive cracks (blind spots) in the system for the majority of people to fall through. IMO, you cannot tax them enough. This is a great bold move by the French government. It's great to see a country in which democracy still works for the people.
ElFitz 7y ago
How much do most uneducated people in most of the world make? How much do most uneducated people in mostly uneducated markets make? How much disposable income do they have? How much are they worth to advertisers and sellers such as Amazon? Pretty much nothing. And that's just for the schools part.
tim333 7y ago
>The idea behind taxes is that you use some public resource and you pay for that service That's not the main way taxes work. Typically the government raises taxes from the well off to subsidise things like roads schools healthcare and welfare. So say a well paid developer may have to pay tax and it gets used to house a homeless person or bomb Syria. The fact that the developer is not homeless or wanting to bomb places is not a showstopper. Paying for services you use is more just paying for stuff.

by bko 7y ago

Vinnl 7y ago

> What public resources did Amazon, a US company, use from France? Digital infrastructure, anti-poverty programs that mean potential customers still have something to spend, financial infrastructure, legislation, ...

deleted 7y ago
[deleted]
tzs 7y ago
Shouldn't that be covered by the 20% VAT that Amazon pays on goods and services sold to entities in France?
- bryanlarsen 7y ago
  Is VAT paid when Google shows an American ad to a French person? The tax is on "digital services". It's unclear if the tax is on physical services from digital companies.
- Renaud 7y ago
  No. VAT is basically a tax paid by people. Companies don’t really pay VAT, they collect it from the end-customers and pass it to the state. Relying on VAT alone skews the burden of financing the state on the people only, which means no participation from the companies that make money without directly contributing to the country’s expenses they benefit from. It also disproportionately disadvantages companies that also employ people and have a physical presence in France and have to pay taxes.
  - liber8 7y ago
    ...Who do you think ultimately owns these companies? Something besides people?
    - AnthonyMouse 7y ago
      Not only that, what makes you think corporate tax is paid only by shareholders rather than customers and employees? A business needs capital to get started -- otherwise the founders wouldn't have to give ownership stakes to capitalists. But the capitalists also have the option to put their money in real estate or bonds or companies that sell to other countries etc. A company has to beat the after-tax ROI of those things in order to raise the money it needs -- so if the taxes go up, the ROI goes down, and they need to squeeze somebody else for the rest of the money, like customers and employees. Which, when it happens to every competing business in your country, they can do since no one can undercut them for the same reason they can't charge any less or pay employees any more and still raise capital -- everyone now has higher capital costs. The capitalists can move their money to an investment in another country more easily than the customers and employees can move around, so who eats the cost? Ah ha, you say, but what about the companies that are no longer raising capital? Facebook is an established business. They don't need to raise any further capital, so their capital costs are irrelevant and we can tax those foolish capitalists who invested in them without expecting us to raise their taxes just as they were starting to see a return on their high risk investment. Which is true, except that you just convinced investors that it's not worth investing in a prospective competitor and have thereby entrenched Facebook's market position. Oops.

tachyonbeam 7y ago

In the case of Amazon there's a clear protectionist argument to be made. It will kill local businesses and send a bigger share of the profit to an American company. Replace jobs in those small independent businesses by underpaid corporate jobs at Walmart 2.0. Amazon is in a position where it can sell items at a loss for years just for the sake of killing small competitors. Granted, maybe it's the role of antitrust laws to take care of that rather than taxes, but I'm generally in favor of slowing down Amazon, if only to give other players a chance to grow before Amazon takes everything. The problem with antitrust laws is that they will come and slap Bezos with a tiny fine 3 years after Amazon has unfairly killed competitors. If you want to tax and regulate Facebook, etc., I think the argument is much less clear, especially if those regulations are just going to cement Facebook's position against possible newcomers.

99052882514569 7y ago
Rather than focusing on a particular company (Amazon) or even a particular industry (retail), they're addressing a more fundamental problem - digital businesses using arbitrage to virtually "move" profits around and minimize corporate income tax - something that's inherent to their business model and creates an (allegedly) unfair advantage.

bryanlarsen 7y ago

"What public resources did Amazon, a US company, use from France?" off the top of my head, I'm sure there are lots more: - a large set of well-off consumers who got there because of free public education, parental supports, et cetera - a safe society so drop shipping is possible - roads & infrastructure for shipping - a justice system that protects Amazon from cheating buyers and sellers - a stable, accepted currency - no need for large numbers of armed guards at warehouses, protecting shipments, et cetera - a functioning health & welfare system so can get away with paying employees & contractors peanuts - a pool of employees and contractors who were supported by society growing up and much more, I'm sure.

buboard 7y ago
All of those can be applied to any company however. By this logic, they should add a +3% tax on every foreign business. None of this is true. It is a protectionist / anti-tax evasion measure primarily. It can be justified considering the threat that amazon poses in local markets
- SiempreViernes 7y ago
  I don't know why you just ignore to comment on the justification given: that big tech companies engage in blatant tax evasion.
  - buboard 7y ago
    not sure what you mean
    - rtkwe 7y ago
      Double Irish with a Dutch Sandwich. Companies like google can charge their profitable branches in other countries royalties to use Google software or platform moving the profits out of a higher tax country like France into Ireland where there's little to no tax. Even after they patched the Dutch part that allowed even the marginal Irish taxes to be avoided companies can still artificially lower their profit by transferring IP to an Irish company and charging for it's use. https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp https://www.investopedia.com/terms/d/double-irish-with-a-dut...

ripdog 7y ago

Those large tech companies can make money in France because the french government provides all that is necessary for a free, fair and functioning market. How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? All money made on the white market in any country is facilitated by that government, and taxes are paid on all profits to pay for the services which allowed the profit to be made. >The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. It's not arbitrary to expect businesses to pay for services they benefit from.

bko 7y ago
> All money made on the white market in any country is facilitated by that government, and taxes are paid on all profits to pay for the services which allowed the profit to be made. So any taxation is justified? > It's not arbitrary to expect businesses to pay for services they benefit from. Any digital company with revenue of more than €750m ($850m; £670m) - of which at least €25m is generated in France - would be subject to the levy. That sounds arbitrary.
- oeoeo00 7y ago
  Welcome to social rule making. All of it based upon what’s agreeable to the negotiators. Was just reading about term limits in the Constitution are set at a number the decision for which was negotiated by those invited to the party. Absolutely no argument given at the time addressed age or anything real. Just how many 4 year terms they felt was long enough. It’s the same with all cultural laws and norms.
- i_am_proteus 7y ago
  'Progressive' taxation (taxing higher individual incomes at higher rates) seemed arbitrary when it was introduced, too.
- dclowd9901 7y ago
  > So any taxation is justified? Yes. We have income tax in the US. It's the same thing. Google doesn't have to pay the tax if they're not operating in the country. It says right there that if their revenues are +$25m a year, they are subject to the tax. Conversely, the US can also levy taxes against French digital services, and maybe they should. My guess is the cost of not operating in France is much higher than the tax to do so, so that would be a silly maneuver. Tangentially, I find it hilariously hypocritical that the Trump administration is whining about unfair tariffs on digital services.

dcolkitt 7y ago

> The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. Economists have known for 100 years that land value taxes (LVT) are by far the most efficient way to raise taxes. After that consumption taxes are the next most efficient. Corporate taxes and taxes on investment income are one of the least efficient, most distortionary, forms of taxation. Yet policymakers and voters show no sign of changing their opinions, despite how much economic evidence continues to pile up. LVTs are extremely unpopular, because home ownership is fetishized by the middle class as a vehicle for wealth accumulation. Even in progressive polities like California, there's always tremendous political will to keep residential property taxes artificially low. VAT taxes are almost just as despised, especially in America. Meanwhile higher corporate and investment taxes are supported by large majorities. Despite the fact that they impose serious drags on productivity and growth. If your goals is having a more progressive tax code or increasing income equality, the much better strategy is to combine high LVT/VAT taxes with a UBI, rather than explicitly try to target poorly designed tax schemes at rich people.

99052882514569 7y ago
> If your goals is having a more progressive tax code or increasing income equality, the much better strategy is to combine high LVT/VAT taxes with a UBI, rather than explicitly try to target poorly designed tax schemes at rich people. Effectiveness of UBI is still an area of much debate and research. Early results of this research based on a few pilots is decidedly not positive.
nostrademons 7y ago
Much of this is because of information distortion - when the state directly collects an LVT from homeowners or a VAT from consumers, every individual citizen is aware of that tax and feels the pain of it. When they collect a tax from corporations, only the corporation feels it as a tax, and they raise their prices to compensate for losses from it, and the consumer instead sees it as simply the price of goods. The consumer has no information for what things would have cost without the tax, so they simply accept it as how things are. Meanwhile, the beneficial effects of an LVT or VAT all appear in reduced opportunity costs (the price of housing comes down, the prices of consumer goods more truly reflect supply & demand), so they're completely unaware of them. It makes me wonder, now that cryptocurrency is a thing, if fiscal policy could be embedded directly in the monetary system. Rather than a separate tax that's charged and remitted to the treasury, it'd simply be the difference between what a consumer spends and what a producer receives, much like how transaction fees come straight out of the transaction.

99052882514569 7y ago

>I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. There's nothing arbitrary here, in fact they're attempting to partially address a perverse incentive to take all your business online and do some jurisdiction arbitrage to minimize corporate taxes. This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris that's trying to compete online. Taxes are not just about revenue, they are often about changing incentives (for the better if used well, for the worse if used without regard for unintended consequences). >Much of the edge Amazon has versus local retailers is that it is more efficient. Much, but not all. This addresses an additional edge Amazon has versus local retailers.

jtx22 7y ago
Who says we even need brick and mortar anything? Why would the government artificially support that way of delivering goods and services?
weberc2 7y ago
I'm trying to follow the argument in good faith, so bear with me... > This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris that's trying to compete online. Are you sure it's "an unfair advantage" and not just "an advantage"? Doesn't your position presume that the brick-and-mortar business model deserves special protection? If so, why? If not, what then is unfair about "jurisdiction arbitrage". > Taxes are not just about revenue, they are often about changing incentives What is the implied incentive in this case? It seems like it's just incentivizing a brick and mortar business model, but it's not clear why this is inherently virtuous. > This addresses an additional edge Amazon has versus local retailers. Doesn't this all point to a fundamental problem with "corporate tax"? Wouldn't it be better (fairer) to reduce or remove corporate tax and raise sales tax or similar, such that it doesn't matter whether the business has a presence in the country in question? I'm not very knowledgable about the topic, so I'm hoping someone can set me straight.
- 99052882514569 7y ago
  >Are you sure it's "an unfair advantage" and not just "an advantage"? Doesn't your position presume that the brick-and-mortar business model deserves special protection? If so, why? Because it employs more people and pays taxes locally. It's perfectly valid for the government to ignore that and focus solely on the consumer side (i.e. minimize prices), but it's also perfectly valid (and economically sound) to do what France is doing. >What is the implied incentive in this case? It seems like it's just incentivizing a brick and mortar business model No, it is not incentivizing it. It levels the playing field a bit by applying more consistent taxation. >Doesn't this all point to a fundamental problem with "corporate tax"? Wouldn't it be better (fairer) to reduce or remove corporate tax and raise sales tax or similar, such that it doesn't matter whether the business has a presence in the country in question? I can be persuaded by that argument (economists do love consumption taxes for a reason, after all), but either way it's not for Amazon to decide. In France, it is for the French people to decide, via their representatives. Whatever positive or negative consequences arise are also theirs to bear.

alwayseasy 7y ago

Even staying with the framework of "public resource use". They benefit from the attractive market created by the country. An educated, safe and healthy population with high bandwidth internet with disposable income ready to buy on Amazon.

mikeash 7y ago

The idea behind taxes is that society needs government and government needs money, that’s it. Some taxes are connected to the use of specific public resources, but many are not. What do my income taxes pay for? The answer is basically “everything.”

michaelmrose 7y ago

The actual principle behind taxation is that we siphon some money off to pay for the common needs because the free market is great at allocating the correct number of shoe stores to a town and worthless at making it possible to live in that town. Taking from foreigners so long as it isn't so much that they are discouraged from doing business is a plus in that it increases the welfare of your people at the expense of the other guys people. This is the actual theory of taxation and everything else is after the fact justification.

bagacrap 7y ago

> I never understood the logic behind taxing large internet businesses. > The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skills to the worker. Taxation is used to encourage activities the govt thinks are beneficial to society, and discourage activities that are detrimental. In the US, married couples and those with children get tax breaks. This in spite of the fact that children use government services, accruing greater public costs. However the powers that be find it beneficial to encourage marriage and family building, I suppose because it hypothetically leads to greater stability and encourages more long term participation in the economy (can't quit your job and travel the world if you have kids to support). So in short yes, the government can and does tax (or exempt from tax) whatever or whoever it wants, within the limits of the country's constitution and their courts' interpretation thereof. There is no requirement that it be directly correlated to a service the government provides. Leveling the playing field wrt the inherent advantages that a large tech firm benefits from (economies of scale) does seem to be within the reasonable purview of a government which wants to protects its constituents from a tendency of the free market towards monopolization. This tax encourages competition by smaller players, which keeps Amazon honest. It is only not necessary if you trust Amazon to always act in the best interests of the consumer even after stamping out all competition.

dhshahsndeisjwn 7y ago
>(can't quit your job and travel the world if you have kids to support). I think the real reason is that there will be someone to look after you when you're old and sick.

deleted 7y ago

[deleted]

cma 7y ago

> I never understood the logic behind taxing large internet businesses. Why have 20% of Taxi revenue (or whatever it is) leave the country if basically all of the service is provided in country, and the internet taxi company takes the large cut over a sustained period through a combination of first-mover advantage an network effects? (Not that that's what's going on completely in the case of ride sharing, as Uber may still be subsidizing things at this point) For other things it doesn't make sense, but in the case of many of these companies it is basically just citizens banding together through democratic decision making to not get taken advantage of through network effects that lock in certain services and shield them from competition.

weberc2 7y ago
> Why have 20% of Taxi revenue (or whatever it is) leave the country if basically all of the service is provided in country, and the internet taxi company takes the large cut over a sustained period through a combination of first-mover advantage an network effects? Because the value proposition for a service like Uber is the technology to efficiently broker transactions between riders and drivers (and hopefully we can avoid the predictable digression that this brokerage is trivial). The aforementioned 20% pays for that technology while the other 80% pays for the cost of the ride (the driver's time, fuel, car mileage, etc). Also, I don't think the first-mover or network effects are particularly strong in the case of Uber. I have a hard time believing that the overwhelming majority wouldn't jump ship immediately if a competitor arrived on the scene who could offer better fares for customers and/or better rates for drivers. By comparison, an upstart Facebook competitor wouldn't be able to compete even if they could "outprice" Facebook (I guess "outprice" would be "better data privacy" in this example) because Facebook's product is the network. Of course, being able to compete with Uber (i.e. offering better rates/fares) is still prohibitively hard for most upstarts, but that's different than first-mover or network effects.

chewz 7y ago

The logic behind taxation is that if governments are able to extract money from any activity without causing a revolution or foreign invasion they do it. I doubt French people will revolt against taxing Google or US Marines will invade France.

globuous 7y ago

I think it comes down to economic warfare. The us abuses it with its allies and thats just retaliation. Herés a video in french explaining it better than i can: https://m.youtube.com/watch?v=dejeVuL9-7c https://m.youtube.com/watch?v=dejeVuL9-7c Maybe YT knows how to translate live ? (Nlp + gtranslate ?) My point is: in order to understand this chess move (and judge for yourself whether its a smart one or not), you have to understand the previous moves on the board (from « allies » and « ennemies », or just « economic partners » as de gaulle would say).

pyrale 7y ago
> So, they're imposing a tax on companies that serve French customers via the internet but aren't based in France The Alstom case (and, to a larger extent, the US justice system jurisdictional overreach) was really something ugly, I don't really believe it's even remotely comparable to this situation.

scarejunba 7y ago

Nah, that’s overthinking it, I think. States are also like participants in a market. In exchange for access to French citizens, France charges some people some amount. It’s really no different from what Facebook charges you for running an ad on their platform. It’s decoupled from cost because it’s not about cost.

bitwize 7y ago

The idea behind taxation is "the government needs money to function, and it alone has the authority to take it by force". Anything else is a post hoc justification.

rb808 7y ago
Yeah I think Americans often look for economic incentives behind policy and think taxes are carefully chosen. Most Europeans know basically if there is money there it'll get taxed sooner or later.
ahje 7y ago
Exactly. The French government decided that businesses should be taxed for profits made from French consumers. Some businesses found a loop hole using the laws of other EU countries to avoid paying those taxes, and now the government of France decided to plug that loop hole simply because they have the will and the way. There's not really anything else to it.

celticninja 7y ago

Amazon delivers stuff to my house. It uses all the local government run resources, like roads, to carry out that business.

jpadkins 7y ago
Amazon does not deliver packages. A local delivery company in France does. They pay local taxes (corp, gas, etc) which are passed on to Amazon when Amazon pays for shipping.

pgcj_poster 7y ago

> The idea behind taxes is that you use some public resource and you pay for that service. That's pretty clearly not the operative principal behind most taxation. Even the examples you gave mostly contradict it: if the point were to make people pay for services they use, then public schools would just charge tuition. As for gasoline taxes, I mostly hear politicians discuss them as an environmental measure; it never even occurred to me that they could be a fee for using roads. And that's not to mention things like income taxes, where the the poor, who use the most public services, pay the least. > The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework… This seems like a very radical position. "x should be done by the best means possible" is almost a tautology. Can you explain what you mean? I think that France should levy any taxes that would benefit its people. Some taxes are bad, because eg. they hurt the economy enough to outweigh the benefit of increased revenues. In other cases, it's the reverse. In any case, what matters in the end is the public welfare. Do you disagree?

braythwayt 7y ago

With respect, you do not understand the logic behind taxes, much less the logic behind taxing international businesses. > The idea behind taxes is that you use some public resource and you pay for that service You are framing taxes as if the government is a business selling people health care, fire protection, security, and infrastructure. I benefit from infrastructure I don't personally use. For example, even if I am a healthy individual, I benefit from healthcare! Healthy people get and keep their jobs, get paid, and spend their money on Netflix, Uber, Lyft, and/or Disney. Lemme look... Yup, Netflix, Uber, Lyft, and Disney are all customers of my employer, who pays me, so I benefit indirectly from Healthcare. That is one tiny example, but the actual principle behind taxation works this way: Everyone benefits indirectly from a functioning society. (We sometimes tax people just for the things they use, but generally we do this to limit undesirable "tragedy of the commons" problems. Consumption taxes, vice taxes, and the issue of regressive taxation is outside the scope of this reply.) The idea behind taxation is that everyone benefits, therefore everyone pays. Now we are talking about a company located outside of a country, benefitting from that country being a functioning economy. Just as I benefit from infrastructure I don't use because I benefit from my country having a thriving, healthy populace with disposable income, so does the company selling things to the exact same populace. Now just move this such that we are discussing France instead of Canada, and there is the actual logic: These internet companies benefit from France having a functioning economy with a populace that has disposable income to spend, so they should support that by paying taxes. In sum, the flaw in your explanation begins with your model for why people and corporations pay taxes in the first place, and how they benefit from those taxes.

AdrianB1 7y ago
The flaw of this argument that government is selling services is that the government is not selling, it is forcibly collecting money for some vague promises of services. When you buy something in the store the owner doesn't point a gun at your head asking for the money.
- braythwayt 7y ago
  Your reply is a great example of why talking about taxes in an open forum is often a waste of time. We start with a discussion about whether this one particular tax is reasonable or unreasonable because of jurisdiction issues, and before long you realize that a bunch of the people arguing against that tax don't really care about the jurisdiction issue, their real agenda is that they don't want any taxes, any governments, or any societies. You are entitled to your beliefs, of course, but you really shouldn't respond to me. You should just post at the top level that not only should France not tax internet giants, but it shouldn't tax its citizens or anyone else.

hazza1 7y ago

Pretending you're based in Switzerland or some other tax haven to avoid local sales tax gives you a massive advantage over national companies.

beowulfey 7y ago

You don't understand it because it is strictly a philosophical difference of yours. You operate in the paradigm of taxation == fees or penalties imposed on people and corporations by the goverment. It is seen as strictly a negative thing. The opposite idea is that taxation is an /investment/ by corporations and individuals, directed and designed by the government, to allow society to keep running smoothly. You may not always see the effects as they often are indirect, but they are important. The difficulty for most Americans is seeing taxation as a long term benefit rather than as a penalty, as no one is able to look past the fact that they feel forced into paying them.

AdrianB1 7y ago
Taxation is mandatory and evading taxation is punished by prison in most cases. Investments are optional and not investing does not carry prison sentences. It's the same difference between consensual sex and rape: the consent.
wonder_er 7y ago
I don't "feel" forced into paying them. I AM forced into paying them. > no one is able to look past the fact that they feel forced into paying them. This is rather dismissive of a broad category of valid complaints a group feels. The US Government uses tax revenue to fund many things, but some of those things are horrifically misguided wars and a global military empire. is that global military empire an investment? If I had the _option_ of contributing money to the US military, I would never pay a penny to it. Do the benefit of these "investments" to keep (USA) society running smoothly outweigh the millions of lives lost to misguided wars over the last 50 years? I'd say no. It's unethical for me to elevate my _possibly_ elevated standard of living over the lives lost and ruined via the Vietnam war, Afghanistan war, Iraqi war, and countless other instances where the US military has ruined communities and countries.
- rorykoehler 7y ago
  Whether you feel forced or not has little to do with whether you are forced to or not. I don't feel forced to even though I am because I understand and appreciate what I get in return. I would want to pay for these things anyways if taxation didn't exist. I agree on the war front but that can only be changed from within and would exist with taxation or not only without taxation it would be a far more violent experience for you.

tomc1985 7y ago

The reasoning is much simpler than that... the house wants its rake, that's it

Bombthecat 7y ago

You don't like those taxes? Go to China. They steal your stuff without any chance of a legal battle? Well... There is your reason for those taxes.

08-15 7y ago

You misunderstand. The purpose of taxation is to take away the ill-gotten gains of the rich and redistribute them to the oppressed poor. Because, you see, all humans are equal, so if one is richer than another, he must have become rich by exploiting someone else. Well, that's taxation in Marxism. And to an increasing extent, in the European Union. And no, I'm not making this up; the socialists (whether they call themselves The Left, Green or Social Democrats) explicitly state it in those terms.

dang 7y ago
Please don't take HN threads on generic ideological tangents. It's against the site guidelines because it makes all discussions the same and nasty. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

ljm 7y ago

As much as I loathe to word it way, the public resource is the French citizen. Or, the citizen of the country. If Amazon bypasses it with gig economy logic then they are depriving the country of tax they would have paid through traditional means. Amazon owes tax to France for as long as it maintains a workforce out there. They shouldn’t be able to dodge it by treating employees as contractors or having offices in Luxembourg.

AdrianB1 7y ago
Amazon is paying taxes for the employees in France; when using contractors, the contractors pay their taxes there. This law is about something else.

noncoml 7y ago

That's not how taxes work. Government is not a corporation that you pay for using it's resources/services.

forty 7y ago

It's simple, in France there is this idea that everyone should contribute to "national solidarity" according to how much they can afford. Internet giant are very rich so they should contribute a lot, and currently there is a sentiment that they don't contribute as much as they should, so this law is simply starting to fix that.

bacon_waffle 7y ago
And it's a bit rich that, at the same time the US is unhappy with France france over this, the US is imposing on the French economy via FATCA and FBAR.

ska 7y ago

Your stated view of taxation is oversimplified. Certainly some taxes can be viewed as fee-for-service, others are protectionist or strategic, or otherwise effect policy. If you want a simplified version, you are better off thinking of it something like this: The purpose of taxation is to capture a fraction of the economic activity and use that to fund the business of government. (this doesn't capture explicit redistribution, but keeps it simple)

robertAngst 7y ago

> But again arbitrarily punishing or helping some corporations opens up the possibility of corruption and corporate meddling as corporations look for favors. Like it or not, but this is designed into politics. Its just as dirty and evil as it sounds.

lultimouomo 7y ago

> The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. It seems like you're contradicting yourself: why would you fund schools just because you own a property? By your reasoning, you should have a children tax, not a property tax.

Pfhreak 7y ago

> The idea behind taxes is that you use some public resource and you pay for that service. This is not the idea behind taxes at all. There are plenty of services I don't use, but still believe should be funded by the government because they ensure a healthy society or because they care for our most at risk.

londons_explore 7y ago

The thing the taxation is paying for is the French marketplace. That place which is defended by the army, and wouldn't exist without schools, hospitals, and other services.

rorykoehler 7y ago

I'm not really sure it is the role of countries to enrich American shareholders at the expense of their own populace.

tzakrajs 7y ago

Maybe France subsidizes it's telecommunications industry with monetary or anti-competitive advantages and so in return it wields greater control over the taxation of its products?

harry8 7y ago

Totally. Don't tax them. They don't need it. The don't need property rights either. No legal redress. Access to the economy enabled by having a stable, democratic system? Well they probably should only be allowed to have the customer base they would have if life expectancy was around 50 due to cholera and so on and that part of disposable income that remains when everyone is sick all the time. Contracts aren't binding to their counter-parties. And they are banned from hiring anyone who is educated. They can treat their own water, and put in their own plumbing systems, based on market rates for doing that themselves. But then how do you deal with national defence contributions because obviously not being invaded is kind of useful. National parks? Well while the company doesn't use them, the people who make up the company do and user pays can't work for that. But even if individual people don't use them, they get to live in a place where people are happier because national parks exist. Do I need to go on with this? They literally make zero profit and in fact can't exist at all without tax being paid. Tax cheats just want to cheat the system and make someone else pay while they reap the benefits. Cheating is cheating.

xbmcuser 7y ago

If Amazon is so efficient it will still be competitive against local retailers when the local retailers and Amazon have to pay the same sales tax. Which actually is not Amazon or Local retailers paying but the customers they just have to collect it.

asdfasgasdgasdg 7y ago

> The idea behind taxes is that you use some public resource and you pay for that service. IMO this is a fundamental misapprehension. The idea behind taxes isn't to compensate the state for resources consumed. The idea is that the state can tax you, so it does, to use that money for whatever its priorities are. This is kind of a "purpose of a system is what it does" viewpoint on taxation, but I think it's also the most accurate. If you look at it from any other perspective, you're going to see weird inconsistencies like rich people paying more than they consume, deductions that don't match corresponding benefits provided to the public, etc.

davesmith1983 7y ago

They want silicon valley out of Europe. The European Union have wanted this for a long time.

cryptica 7y ago

Corporations are terrible for many reasons. - They have a monopolostic unfair advantage over some market which means that they can be very innefficient and still survive. They hinder real innovation. - As stated in the article, they often pay little to no tax because of their accounting practices; they get all the legal benefits of being treated as an independent entity under the law but none of the costs. - They are constantly lobbying politicians to change the laws to benefit them at the expense of tax payers. - As a consequence of being well promoted on various stock markets, corporations tend to get a lot of easy money from investors; these investors include large 401k and superanuation funds which invest money into stocks without the knowledge of the regular working people whose salaries are paying for it. A lot of the new money which the Fed creates goes straight to corporations because of this. - Corporations are also bad because they hurt free speech and they have the power to manipulate the elections by coercing their employees. The people who control corporations think in black and white and simplistic terms. They think they have all the answers to our socioeconomic problems. They don't understand that they are the problem. They don't understand that fairness is very difficult to achieve and that huge centralized power concentrated in the hands of a tiny number of financially incentivised decision makers opens up massive cracks (blind spots) in the system for the majority of people to fall through. IMO, you cannot tax them enough. This is a great bold move by the French government. It's great to see a country in which democracy still works for the people.

ElFitz 7y ago

How much do most uneducated people in most of the world make? How much do most uneducated people in mostly uneducated markets make? How much disposable income do they have? How much are they worth to advertisers and sellers such as Amazon? Pretty much nothing. And that's just for the schools part.

tim333 7y ago

>The idea behind taxes is that you use some public resource and you pay for that service That's not the main way taxes work. Typically the government raises taxes from the well off to subsidise things like roads schools healthcare and welfare. So say a well paid developer may have to pay tax and it gets used to house a homeless person or bomb Syria. The fact that the developer is not homeless or wanting to bomb places is not a showstopper. Paying for services you use is more just paying for stuff.