4 ms·

It's insane that they want to propose a global minimum corporate tax.

yokaze 6y ago
It's insane, that there isn't one already. https://www.investopedia.com/terms/b/beggarthyneighbor.asp https://www.investopedia.com/terms/b/beggarthyneighbor.asp
pjc50 6y ago
On the contrary, it's necessary if corporations can operate internationally and transfer money untaxably between jurisdictions, otherwise the global effective tax rate is that of the lowest country.
- smabie 6y ago
  What's wrong with that? Countries need to compete just like corporations. Small countries need someway to compete for global talent, and low taxes are a good incentive.
  - Supermancho 6y ago
    > Small countries need someway to compete for global talent, Lower corporate taxes have not resulted in "talent" moving to those countries. It's all legal maneuvering. This is tax evasion 101 (https://en.wikipedia.org/wiki/The_Laundromat_(film) https://en.wikipedia.org/wiki/The_Laundromat_(film)).
  - monadic2 6y ago
    Oh wait the only international orgs with any teeth are the IMF and the World Bank who support each other in a non-competitive, mutually-supportive, DC-based relationship. Too bad these countries were fucked centuries ago I guess.... it was foolish to hope to begin with.
  - endymi0n 6y ago
    I would be even siding with you slightly if this amounted to actually moving people, facilities and capital to that country. However, in the modern world, corporations don't just use low taxes to simply route massive amounts of capital through low-tax countries without a net benefit for anyone — they are actually exploiting tax loopholes in different countries' tax laws against each other. https://en.wikipedia.org/wiki/Dutch_Sandwich https://en.wikipedia.org/wiki/Dutch_Sandwich If Google actually used your machine to port scan and automatically exploit other computers, would you be enraged? Well, that's exactly what their black hat tax lawyers were doing on the financial side: https://en.wikipedia.org/wiki/Dutch_Sandwich https://en.wikipedia.org/wiki/Dutch_Sandwich
    - humanrebar 6y ago
      If it doesn't benefit the Dutch, they would (and I understand they have at least attempted to) close the loopholes. For instance, they could require more presence in the country in particular ways: physically, employed citizens, cash in banks, taxes paid, etc. If the beneficiaries are bribed individuals in various governments, that would be another thing entirely.
    - Mirioron 6y ago
      But these both clearly benefit Ireland and the Netherlands. Many of the major international corporations in the EU are set up in Ireland. Do you think that would be the case if Ireland couldn't attract them with the better tax offers? Ireland even had a referendum that initially rejected the Lisbon Treaty until Ireland got guarantees from the EU that it wouldn't affect their taxation.
  - pnako 6y ago
    In practice, what is done is that big corporations have their headquarters in a few well-developed jurisdictions that have very strong laws to protect their shit (London, New York, etc.) but use shell companies in offshore locations that just offer a mailbox. I don't have an issue with a bank being based in the Bermudas or anywhere, for example; but in that case the HQ should really be based there. There is the same issue with ships registered using flags of convenience. Again, I don't have a problem with that per se. But if there is dispute involving your ship, you go ask Liberia to sort it out. You get your insurance from Liberia too; you get the picture. Now, being French I'm also well-aware that French politicians are completely unrealistic and want to tax French companies doing business abroad in France, and American companies doing business in France, in France (notice the pattern?) There is a middle ground.
  - pinkfoot 6y ago
    Indeed, imagine what the tax rate would be if politicians knew corporations and people had no options. It would ratchet up to strangulation levels. A bit of competition is always sobering.
  - Hamuko 6y ago
    Apple has 137,000 employees of which 80,000 are in the United States and 22,000 are in Europe, and of those 6,000 in Ireland. However, 64% of Apple's sales are (or at least were in 2017) outside the US, which then get funneled to Ireland, despite only housing like 4.3% of Apple's global employees. They're just shifting money, not talent. Money which is then taxed at a very low rate (Apple International had an effective corporate tax rate of 1% in 2003, which was shrunk down to 0.005% by 2014) and in return doesn't really benefit the people of that country.
    - Proven 6y ago
      Oh yeah? Can you guessestimate for us how many employees would Apple have, or how much more (or less) would they be making if Apple had to pay 10 times as much tax?
monadic2 6y ago
How do you figure?
FranzFerdiNaN 6y ago
If you care about fair trade at all, a minimum tax rate is necessary, else you might as well put it at 0, because that's what it will fall towards eventually.
tanilama 6y ago
idk, at least they are trying to get revenue for their own people from somewhere else. Can't see a reason why they wouldn't pursue this objective except US's objection, now the relation had soured anyway.

It's insane, that there isn't one already. https://www.investopedia.com/terms/b/beggarthyneighbor.asp https://www.investopedia.com/terms/b/beggarthyneighbor.asp

pjc50 6y ago

On the contrary, it's necessary if corporations can operate internationally and transfer money untaxably between jurisdictions, otherwise the global effective tax rate is that of the lowest country.

smabie 6y ago
What's wrong with that? Countries need to compete just like corporations. Small countries need someway to compete for global talent, and low taxes are a good incentive.
- Supermancho 6y ago
  > Small countries need someway to compete for global talent, Lower corporate taxes have not resulted in "talent" moving to those countries. It's all legal maneuvering. This is tax evasion 101 (https://en.wikipedia.org/wiki/The_Laundromat_(film) https://en.wikipedia.org/wiki/The_Laundromat_(film)).
- monadic2 6y ago
  Oh wait the only international orgs with any teeth are the IMF and the World Bank who support each other in a non-competitive, mutually-supportive, DC-based relationship. Too bad these countries were fucked centuries ago I guess.... it was foolish to hope to begin with.
- endymi0n 6y ago
  I would be even siding with you slightly if this amounted to actually moving people, facilities and capital to that country. However, in the modern world, corporations don't just use low taxes to simply route massive amounts of capital through low-tax countries without a net benefit for anyone — they are actually exploiting tax loopholes in different countries' tax laws against each other. https://en.wikipedia.org/wiki/Dutch_Sandwich https://en.wikipedia.org/wiki/Dutch_Sandwich If Google actually used your machine to port scan and automatically exploit other computers, would you be enraged? Well, that's exactly what their black hat tax lawyers were doing on the financial side: https://en.wikipedia.org/wiki/Dutch_Sandwich https://en.wikipedia.org/wiki/Dutch_Sandwich
  - humanrebar 6y ago
    If it doesn't benefit the Dutch, they would (and I understand they have at least attempted to) close the loopholes. For instance, they could require more presence in the country in particular ways: physically, employed citizens, cash in banks, taxes paid, etc. If the beneficiaries are bribed individuals in various governments, that would be another thing entirely.
  - Mirioron 6y ago
    But these both clearly benefit Ireland and the Netherlands. Many of the major international corporations in the EU are set up in Ireland. Do you think that would be the case if Ireland couldn't attract them with the better tax offers? Ireland even had a referendum that initially rejected the Lisbon Treaty until Ireland got guarantees from the EU that it wouldn't affect their taxation.
- pnako 6y ago
  In practice, what is done is that big corporations have their headquarters in a few well-developed jurisdictions that have very strong laws to protect their shit (London, New York, etc.) but use shell companies in offshore locations that just offer a mailbox. I don't have an issue with a bank being based in the Bermudas or anywhere, for example; but in that case the HQ should really be based there. There is the same issue with ships registered using flags of convenience. Again, I don't have a problem with that per se. But if there is dispute involving your ship, you go ask Liberia to sort it out. You get your insurance from Liberia too; you get the picture. Now, being French I'm also well-aware that French politicians are completely unrealistic and want to tax French companies doing business abroad in France, and American companies doing business in France, in France (notice the pattern?) There is a middle ground.
- pinkfoot 6y ago
  Indeed, imagine what the tax rate would be if politicians knew corporations and people had no options. It would ratchet up to strangulation levels. A bit of competition is always sobering.
- Hamuko 6y ago
  Apple has 137,000 employees of which 80,000 are in the United States and 22,000 are in Europe, and of those 6,000 in Ireland. However, 64% of Apple's sales are (or at least were in 2017) outside the US, which then get funneled to Ireland, despite only housing like 4.3% of Apple's global employees. They're just shifting money, not talent. Money which is then taxed at a very low rate (Apple International had an effective corporate tax rate of 1% in 2003, which was shrunk down to 0.005% by 2014) and in return doesn't really benefit the people of that country.
  - Proven 6y ago
    Oh yeah? Can you guessestimate for us how many employees would Apple have, or how much more (or less) would they be making if Apple had to pay 10 times as much tax?

monadic2 6y ago

How do you figure?

FranzFerdiNaN 6y ago

If you care about fair trade at all, a minimum tax rate is necessary, else you might as well put it at 0, because that's what it will fall towards eventually.

tanilama 6y ago

idk, at least they are trying to get revenue for their own people from somewhere else. Can't see a reason why they wouldn't pursue this objective except US's objection, now the relation had soured anyway.