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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 co

by 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.
- praptak 7y ago
  > So any taxation is justified? A corp will raise prices to whatever level the market will bear. Why shouldn't a society do the same with taxes?
  - vorpalhex 7y ago
    Because it's short sighted to over tax your citizens from both sides?
    - bmelton 7y ago
      To this extent, countries compete on taxation and value-add for services. Perhaps country A charges more in taxes, but offers more education to its people, and a more educated workforce to hire from, while country B offers fewer of those amenities in exchange for lower taxes. Inter-country competition helps to keep them honest, and corporations get to choose the luxury of where they operate from and do business out of.
      - vorpalhex 7y ago
        That's a very thoughtful reply to my off the cuff response. Corporations and people do get to shop both taxes and benefits, but most individuals seem to treat them like a genetic condition. There's value in competition, because it's about the closest we've been able to get to evolution. The issue comes about when competition is lopsided - I can understand the complaint here from the French, but I don't care at all for their solution.
      - umeshunni 7y ago
        What's missing is the luxury for individuals to also choose their countries based on the same parameters.
  - CountSessine 7y ago
    A corp will raise prices to whatever level the market will bear. Why shouldn't a society do the same with taxes? A corp exists in a competitive market and can rarely raise prices to "whatever level the market will bear". If I don't like their prices, I use their competitor. What competitor does my mandatory government and it's confiscatory tax agency have? What alternative do I have but to hand over half my work to them to be frittered away on foreign wars and grants for indolence and incompetence?
- ineedasername 7y ago
  >so any type of tax is justified? That's a straw man. You're leaping from "some type of tax is justified" which is quite a bit more reasonable than "any tax". And if you want to say it's a slippery slope or some such, well, ever single action if extrapolated to the extreme can be a viewed as such. If 3% is reasonable and then it's proposed to goes up and up, fight the increase, not the initial reasonable action. Of course this may be putting words in your mouth, so I won't attribute it to you, only that I preempt a logical counter to mine.
  - sverige 7y ago
    All taxes are a slippery slope. Name one that has ever been repealed. Income tax in the U.S. started out as a modest 3% on only the highest incomes and look where that has ended up: full on wealth redistribution. We can argue whether that's a good thing or not, but not whether there's a slippery slope when it comes to implementing a new tax.
    - oblio 7y ago
      Tithe. And even if I couldn't name a tax that was repealed, many are way lower than in the past. Peasants would rebel because they'd be taxed to (literal!) death.
    - tomc1985 7y ago
      > All taxes are a slippery slope. Name one that has ever been repealed. Income tax in the U.S. started out as a modest 3% on only the highest incomes and look where that has ended up: full on wealth redistribution. > We can argue whether that's a good thing or not, but not whether there's a slippery slope when it comes to implementing a new tax. Dude what? Wealth redistribution? Lots of countries have much higher taxes that actually redistribute that wealth. Don't call our system socialist, it isn't. Have you ever lived in socialism (I have)? It isn't even here in California!
    - corneliusphi1 7y ago
      In 1944 the highest US tax bracket was 94%
- JAlexoid 7y ago
  > That sounds arbitrary. Administrative burden limits are not arbitrary. They are used in many places all over the world.
  - AdrianB1 7y ago
    That does not make it not arbitrary, there is no logic in that statement.
50656E6973 7y ago
>How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? By showing ads. Ads only need eyeballs to make money.
- AznHisoka 7y ago
  How can the eyeballs in France view ads if there was chaos outside, and gangs started to cut internet cables? How can eyeballs view ads if they didn't learn from French schools how to go to Google.com and enter search queries?
  - ars 7y ago
    You missed the question. why is France charging tax to these particular companies? As opposed to all companies? Your answer makes no distinction between them so doesn't actually answer the question.
    - mattmanser 7y ago
      The reason is because they setup their company legal structures to avoid paying tax, either in France or the US. Then the US every decade or so gives a money repatriation tax amnesty, effectively providing huge subsidies to US firms dodging all these taxes. So the government decided to setup a new tax they couldn't. Can't really blame them.
    - marcus_holmes 7y ago
      that's the point the French are bringing up. French companies pay French taxes. Internet companies serve French markets, take French money, but pay taxes elsewhere, and often they pay no taxes because they can shop around to find a friendly tax haven that doesn't charge them taxes. This is only possible because internet. So, they're imposing a tax on companies that serve French customers via the internet but aren't based in France, so that all companies pay tax again. Does that make sense?
      - 7y ago
weberc2 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? Ignoring for a moment that this rationale can support any tax policy at all (including 100% tax rates)... This holds for all businesses, not just large tech companies. So why is the tax focused on the latter?
- ripdog 7y ago
  >Ignoring for a moment that this rationale can support any tax policy at all (including 100% tax rates)... Isn't that true for any rationale for tax? I mean, I wasn't talking about tax rates, that's a completely separate discussion... >This holds for all businesses, not just large tech companies. So why is the tax focused on the latter? Because other businesses are already effectively taxed by existing laws. Overseas tech giants are targeted because they were legally avoiding existing taxes.
- mola 7y ago
  Because these large tech companies don't pay taxes currently. The current tax laws have a huge loophole in respect to large foreign internet businesses. Now they're trying to close that loophole.
  - AdrianB1 7y ago
    I think it is impossible to sell anything in the EU without VAT, which is a much higher taxation rate than profit (not as percentage, but as money: VAT is 20-25% of the product or service price, profit can be as low as 1-5%. What the likes of Amazon, Google or Facebook are not paying is profit tax, pretending they have no profits. French companies that have no profits also don't pay profit tax.
    - jadel 7y ago
      Before the new VAT rules Amazon had a deal over VAT with Luxembourg, similar to the deal with Ireland on income tax. http://europa.eu/rapid/press-release_IP-17-3701_en.htm http://europa.eu/rapid/press-release_IP-17-3701_en.htm
vixen99 7y ago
What about the money the French make by using Google services? Desktop search traffic originating from Google is 90% - presumably for a good reason. https://www.statista.com/statistics/220534/googles-share-of-search-market-in-selected-countries/ https://www.statista.com/statistics/220534/googles-share-of-...
- sbov 7y ago
  How much of that money is money that was going to be spent anyways? It's only money Google "made" for the French if it wasn't going to be spent in France in the first place.
  - nybble41 7y ago
    It's not the quantity of money spent that matters, but rather the value received in exchange. People spent their money at e.g. Amazon because that is where they expected to receive the most value for it. Take that option away and the money will still be spent but the value received in return will be less.
- JAlexoid 7y ago
  Irrelevant. You know perfectly well that this tax is exclusively to counter the tax burden shifting. If corporations were setting up companies in countries and paid reasonable taxes on profits generated in those countries... no one would raise the possibility of these taxes.
- ripdog 7y ago
  The market already rewards Google for their services by the absurd amount of money they make. The government is generally not in the business of rewarding businesses for their services.
  - davesmith1983 7y ago
    Well Google lost about 70 billion recently
Mirioron 7y ago
It's not free and fair if a tax is written to target 30 companies, is it?
- liberte82 7y ago
  How is it any less fair than the tariffs that Trump is throwing on anyone that pissed in his corn flakes that morning?
jwr 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? Also, those large tech companies can sell to French customers because French customers have money to buy from them. And the reason they have that money is largely due to the country/society/legal system/welfare/medical/etc. This is a "access to market" tax and it makes perfect sense.
- colpabar 7y ago
  Don't you think that a company might just raise their prices to pay for those taxes?
  - avip 7y ago
    Companies raise prices based on demand curve, not cost.
    - mc32 7y ago
      That’s not what they say when the subject of tariffs comes up. “We’ll have to pass it on to consumers”.
      - zaroth 7y ago
        But in reality, a share of the tariff is paid by the supplier and a share is paid by the consumer. And if I remember my classic macroeconomics class correctly, that share depends precisely on the elasticity of demand (slope of the demand curve).
        seirl 7y ago
        This is correct.
      - dredmorbius 7y ago
dpatru 7y ago
A free market transaction benefits both parties; both buyer and seller feel like they are better off as a result, otherwise they would not agree to the sale. Therefore, just as the French government can say that the American company is benefiting from French citizens, so the American government can claim that the French citizens are benefiting from American companies. A tax by either government inserts friction into the transaction and makes the deal less profitable on the party or parties that pay for the tax. The French government is taxing businesses not because this is somehow morally right or efficient, but because it is easier than convincing its subjects/citizens that government services merit higher personal taxes.
ekianjo 7y ago
> How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? It's not like they don't already pay taxes. This is an additional tax on top of all the other ones.
CamperBob2 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. Staying out of the way? They can do that for free.
- metta2uall 7y ago
  Capitalist governments do not stay out of the way - take a look at the volume of corporate law. (That's in addition to healthcare, education, policing, building industry regulation, etc)

by ripdog 7y ago

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.
praptak 7y ago
> So any taxation is justified? A corp will raise prices to whatever level the market will bear. Why shouldn't a society do the same with taxes?
- vorpalhex 7y ago
  Because it's short sighted to over tax your citizens from both sides?
  - bmelton 7y ago
    To this extent, countries compete on taxation and value-add for services. Perhaps country A charges more in taxes, but offers more education to its people, and a more educated workforce to hire from, while country B offers fewer of those amenities in exchange for lower taxes. Inter-country competition helps to keep them honest, and corporations get to choose the luxury of where they operate from and do business out of.
    - vorpalhex 7y ago
      That's a very thoughtful reply to my off the cuff response. Corporations and people do get to shop both taxes and benefits, but most individuals seem to treat them like a genetic condition. There's value in competition, because it's about the closest we've been able to get to evolution. The issue comes about when competition is lopsided - I can understand the complaint here from the French, but I don't care at all for their solution.
    - umeshunni 7y ago
      What's missing is the luxury for individuals to also choose their countries based on the same parameters.
- CountSessine 7y ago
  A corp will raise prices to whatever level the market will bear. Why shouldn't a society do the same with taxes? A corp exists in a competitive market and can rarely raise prices to "whatever level the market will bear". If I don't like their prices, I use their competitor. What competitor does my mandatory government and it's confiscatory tax agency have? What alternative do I have but to hand over half my work to them to be frittered away on foreign wars and grants for indolence and incompetence?
ineedasername 7y ago
>so any type of tax is justified? That's a straw man. You're leaping from "some type of tax is justified" which is quite a bit more reasonable than "any tax". And if you want to say it's a slippery slope or some such, well, ever single action if extrapolated to the extreme can be a viewed as such. If 3% is reasonable and then it's proposed to goes up and up, fight the increase, not the initial reasonable action. Of course this may be putting words in your mouth, so I won't attribute it to you, only that I preempt a logical counter to mine.
- sverige 7y ago
  All taxes are a slippery slope. Name one that has ever been repealed. Income tax in the U.S. started out as a modest 3% on only the highest incomes and look where that has ended up: full on wealth redistribution. We can argue whether that's a good thing or not, but not whether there's a slippery slope when it comes to implementing a new tax.
  - oblio 7y ago
    Tithe. And even if I couldn't name a tax that was repealed, many are way lower than in the past. Peasants would rebel because they'd be taxed to (literal!) death.
  - tomc1985 7y ago
    > All taxes are a slippery slope. Name one that has ever been repealed. Income tax in the U.S. started out as a modest 3% on only the highest incomes and look where that has ended up: full on wealth redistribution. > We can argue whether that's a good thing or not, but not whether there's a slippery slope when it comes to implementing a new tax. Dude what? Wealth redistribution? Lots of countries have much higher taxes that actually redistribute that wealth. Don't call our system socialist, it isn't. Have you ever lived in socialism (I have)? It isn't even here in California!
  - corneliusphi1 7y ago
    In 1944 the highest US tax bracket was 94%
JAlexoid 7y ago
> That sounds arbitrary. Administrative burden limits are not arbitrary. They are used in many places all over the world.
- AdrianB1 7y ago
  That does not make it not arbitrary, there is no logic in that statement.

50656E6973 7y ago

>How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? By showing ads. Ads only need eyeballs to make money.

AznHisoka 7y ago
How can the eyeballs in France view ads if there was chaos outside, and gangs started to cut internet cables? How can eyeballs view ads if they didn't learn from French schools how to go to Google.com and enter search queries?
- ars 7y ago
  You missed the question. why is France charging tax to these particular companies? As opposed to all companies? Your answer makes no distinction between them so doesn't actually answer the question.
  - mattmanser 7y ago
    The reason is because they setup their company legal structures to avoid paying tax, either in France or the US. Then the US every decade or so gives a money repatriation tax amnesty, effectively providing huge subsidies to US firms dodging all these taxes. So the government decided to setup a new tax they couldn't. Can't really blame them.
  - marcus_holmes 7y ago
    that's the point the French are bringing up. French companies pay French taxes. Internet companies serve French markets, take French money, but pay taxes elsewhere, and often they pay no taxes because they can shop around to find a friendly tax haven that doesn't charge them taxes. This is only possible because internet. So, they're imposing a tax on companies that serve French customers via the internet but aren't based in France, so that all companies pay tax again. Does that make sense?
    - 7y ago

weberc2 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? Ignoring for a moment that this rationale can support any tax policy at all (including 100% tax rates)... This holds for all businesses, not just large tech companies. So why is the tax focused on the latter?

ripdog 7y ago
>Ignoring for a moment that this rationale can support any tax policy at all (including 100% tax rates)... Isn't that true for any rationale for tax? I mean, I wasn't talking about tax rates, that's a completely separate discussion... >This holds for all businesses, not just large tech companies. So why is the tax focused on the latter? Because other businesses are already effectively taxed by existing laws. Overseas tech giants are targeted because they were legally avoiding existing taxes.
mola 7y ago
Because these large tech companies don't pay taxes currently. The current tax laws have a huge loophole in respect to large foreign internet businesses. Now they're trying to close that loophole.
- AdrianB1 7y ago
  I think it is impossible to sell anything in the EU without VAT, which is a much higher taxation rate than profit (not as percentage, but as money: VAT is 20-25% of the product or service price, profit can be as low as 1-5%. What the likes of Amazon, Google or Facebook are not paying is profit tax, pretending they have no profits. French companies that have no profits also don't pay profit tax.
  - jadel 7y ago
    Before the new VAT rules Amazon had a deal over VAT with Luxembourg, similar to the deal with Ireland on income tax. http://europa.eu/rapid/press-release_IP-17-3701_en.htm http://europa.eu/rapid/press-release_IP-17-3701_en.htm

vixen99 7y ago

What about the money the French make by using Google services? Desktop search traffic originating from Google is 90% - presumably for a good reason. https://www.statista.com/statistics/220534/googles-share-of-search-market-in-selected-countries/ https://www.statista.com/statistics/220534/googles-share-of-...

sbov 7y ago
How much of that money is money that was going to be spent anyways? It's only money Google "made" for the French if it wasn't going to be spent in France in the first place.
- nybble41 7y ago
  It's not the quantity of money spent that matters, but rather the value received in exchange. People spent their money at e.g. Amazon because that is where they expected to receive the most value for it. Take that option away and the money will still be spent but the value received in return will be less.
JAlexoid 7y ago
Irrelevant. You know perfectly well that this tax is exclusively to counter the tax burden shifting. If corporations were setting up companies in countries and paid reasonable taxes on profits generated in those countries... no one would raise the possibility of these taxes.
ripdog 7y ago
The market already rewards Google for their services by the absurd amount of money they make. The government is generally not in the business of rewarding businesses for their services.
- davesmith1983 7y ago
  Well Google lost about 70 billion recently

Mirioron 7y ago

It's not free and fair if a tax is written to target 30 companies, is it?

liberte82 7y ago
How is it any less fair than the tariffs that Trump is throwing on anyone that pissed in his corn flakes that morning?

jwr 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? Also, those large tech companies can sell to French customers because French customers have money to buy from them. And the reason they have that money is largely due to the country/society/legal system/welfare/medical/etc. This is a "access to market" tax and it makes perfect sense.

colpabar 7y ago
Don't you think that a company might just raise their prices to pay for those taxes?
- avip 7y ago
  Companies raise prices based on demand curve, not cost.
  - mc32 7y ago
    That’s not what they say when the subject of tariffs comes up. “We’ll have to pass it on to consumers”.
    - zaroth 7y ago
      But in reality, a share of the tariff is paid by the supplier and a share is paid by the consumer. And if I remember my classic macroeconomics class correctly, that share depends precisely on the elasticity of demand (slope of the demand curve).
      - seirl 7y ago
        This is correct.
    - dredmorbius 7y ago

dpatru 7y ago

A free market transaction benefits both parties; both buyer and seller feel like they are better off as a result, otherwise they would not agree to the sale. Therefore, just as the French government can say that the American company is benefiting from French citizens, so the American government can claim that the French citizens are benefiting from American companies. A tax by either government inserts friction into the transaction and makes the deal less profitable on the party or parties that pay for the tax. The French government is taxing businesses not because this is somehow morally right or efficient, but because it is easier than convincing its subjects/citizens that government services merit higher personal taxes.

ekianjo 7y ago

> How could Google make money in France if there was no french police force, education system, market regulation, court system, contract enforcement? It's not like they don't already pay taxes. This is an additional tax on top of all the other ones.

CamperBob2 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. Staying out of the way? They can do that for free.

metta2uall 7y ago
Capitalist governments do not stay out of the way - take a look at the volume of corporate law. (That's in addition to healthcare, education, policing, building industry regulation, etc)