8 ms·

I read "providing proper economic benefits to the United States, including the United States Treasury" as just meaning Microsoft will make money (and hence pay

I read "providing proper economic benefits to the United States, including the United States Treasury" as just meaning Microsoft will make money (and hence pay tax) on this. Am I being naive?

czzr 6y ago
Apparently yes: A transaction of the type the president envisions could also prove more expensive than the one Microsoft described on Sunday. Trump said Monday that part of the amount paid to buy TikTok would have to come to the U.S. Treasury Department because it would be making the deal possible. “It’s a little bit like the landlord/tenant; without a lease the tenant has nothing, so they pay what’s called ‘key money,’ or they pay something,” Trump said. “But the United States should be reimbursed or should be paid a substantial amount of money, because without the United States they don’t have anything, at least having to do with the 30%.” https://www.cnbc.com/2020/08/03/president-trump-might-be-easier-if-microsoft-buys-all-of-tiktok.html https://www.cnbc.com/2020/08/03/president-trump-might-be-eas... So, to summarise: the president of the United States is openly advocating applying illegal real estate extortion/bribery practices to major M&A deals with geopolitical implications.
- pjc50 6y ago
  > So, to summarise: the president of the United States is openly advocating applying illegal real estate extortion/bribery practices to major M&A deals with geopolitical implications Well, yes, because he's spent his entire career doing that and now he's President. See the case the NY AG is building against him.
  - londons_explore 6y ago
    Is it any different than just having a tax on purchasing foreign companies? It's the same as a tax on purchasing foreign goods, which is already in place for goods from China in the form of tariffs.
    - pjc50 6y ago
      Forgive me if I'm not familiar with the process, but aren't taxes set by Congress?
    - rsynnott 6y ago
      I mean, if such a tax existed, sure (though such a tax would probably not be a great idea...). However, there is no relevant tax.
    - InitialLastName 6y ago
      Tariffs aren't a tax on purchasing foreign goods. I can buy as many tons of steel as I'd like in China while paying no money to the US Government (as long as I can export the money, which is a different issue). Tariffs are taxes on importing foreign goods. That would only even conceivably be comparable if Microsoft were planning to relocate TikTok to the US; as it sounds like they're planning to relocate it to London, that wouldn't apply.
cookie_monsta 6y ago
Trump seems to have some idea about the US being like a landlord in this deal, it's been widely reported: https://www.theguardian.com/technology/video/2020/aug/04/trump-says-us-should-take-share-of-proceeds-from-proposed-tiktok-sale-video https://www.theguardian.com/technology/video/2020/aug/04/tru...
1f60c 6y ago
> Am I being naive? Possibly. Axios[0] quotes Trump as saying: “A very substantial portion of that price is going to have to come into the Treasury of the United States. Because we’re making it possible for this deal to happen. Right now they don’t have any rights, unless we give it to them. So if we’re going to give them the rights, it has to come into this country. It’s a little bit like the landlord/tenant”. Make of that what you will, but it doesn’t sound like he’s talking about just taxes to me. [0]: https://www.axios.com/trump-tiktok-banned-microsoft-fd45748d-1ee8-4f4a-812a-09ec76d6f8e2.html https://www.axios.com/trump-tiktok-banned-microsoft-fd45748d...
- mcintyre1994 6y ago
  I'm probably being stupid, but how is that not absolutely terrifying for US companies? The deal seems to be that all acquisition of foreign companies has to have a kickback to the treasury because they could always just ban the company you bought otherwise?
  - puranjay 6y ago
    This entire thing saddens me a great deal. It seems that you can just whip people up into a frenzy - even th HN crowd - simply by shouting "national security" and providing no proof to back it up. Has everyone really forgotten Saddam's WMDs so quickly?
    - xvector 6y ago
      I too was surprised that the HN crowd supported Trump’s and Microsoft’s actions so much. The people here are fairly intelligent and tend to have a good education. We are no stranger to history. We know that “national security risk” has been used to justify terrifying programs like PRISM and the Patriot Act. And despite having this in mind, so many folks here just openly supported what is effectively a hostile and coercive takeover of a foreign corporation. If some of the most educated people in this country can fall victim to populist xenophobia then I don’t have much hope for us overall.

I read "providing proper economic benefits to the United States, including the United States Treasury" as just meaning Microsoft will make money (and hence pay tax) on this. Am I being naive?

czzr 6y ago

Apparently yes: A transaction of the type the president envisions could also prove more expensive than the one Microsoft described on Sunday. Trump said Monday that part of the amount paid to buy TikTok would have to come to the U.S. Treasury Department because it would be making the deal possible. “It’s a little bit like the landlord/tenant; without a lease the tenant has nothing, so they pay what’s called ‘key money,’ or they pay something,” Trump said. “But the United States should be reimbursed or should be paid a substantial amount of money, because without the United States they don’t have anything, at least having to do with the 30%.” https://www.cnbc.com/2020/08/03/president-trump-might-be-easier-if-microsoft-buys-all-of-tiktok.html https://www.cnbc.com/2020/08/03/president-trump-might-be-eas... So, to summarise: the president of the United States is openly advocating applying illegal real estate extortion/bribery practices to major M&A deals with geopolitical implications.

pjc50 6y ago
> So, to summarise: the president of the United States is openly advocating applying illegal real estate extortion/bribery practices to major M&A deals with geopolitical implications Well, yes, because he's spent his entire career doing that and now he's President. See the case the NY AG is building against him.
- londons_explore 6y ago
  Is it any different than just having a tax on purchasing foreign companies? It's the same as a tax on purchasing foreign goods, which is already in place for goods from China in the form of tariffs.
  - pjc50 6y ago
    Forgive me if I'm not familiar with the process, but aren't taxes set by Congress?
  - rsynnott 6y ago
    I mean, if such a tax existed, sure (though such a tax would probably not be a great idea...). However, there is no relevant tax.
  - InitialLastName 6y ago
    Tariffs aren't a tax on purchasing foreign goods. I can buy as many tons of steel as I'd like in China while paying no money to the US Government (as long as I can export the money, which is a different issue). Tariffs are taxes on importing foreign goods. That would only even conceivably be comparable if Microsoft were planning to relocate TikTok to the US; as it sounds like they're planning to relocate it to London, that wouldn't apply.

cookie_monsta 6y ago

Trump seems to have some idea about the US being like a landlord in this deal, it's been widely reported: https://www.theguardian.com/technology/video/2020/aug/04/trump-says-us-should-take-share-of-proceeds-from-proposed-tiktok-sale-video https://www.theguardian.com/technology/video/2020/aug/04/tru...

1f60c 6y ago

> Am I being naive? Possibly. Axios[0] quotes Trump as saying: “A very substantial portion of that price is going to have to come into the Treasury of the United States. Because we’re making it possible for this deal to happen. Right now they don’t have any rights, unless we give it to them. So if we’re going to give them the rights, it has to come into this country. It’s a little bit like the landlord/tenant”. Make of that what you will, but it doesn’t sound like he’s talking about just taxes to me. [0]: https://www.axios.com/trump-tiktok-banned-microsoft-fd45748d-1ee8-4f4a-812a-09ec76d6f8e2.html https://www.axios.com/trump-tiktok-banned-microsoft-fd45748d...

mcintyre1994 6y ago
I'm probably being stupid, but how is that not absolutely terrifying for US companies? The deal seems to be that all acquisition of foreign companies has to have a kickback to the treasury because they could always just ban the company you bought otherwise?
- puranjay 6y ago
  This entire thing saddens me a great deal. It seems that you can just whip people up into a frenzy - even th HN crowd - simply by shouting "national security" and providing no proof to back it up. Has everyone really forgotten Saddam's WMDs so quickly?
  - xvector 6y ago
    I too was surprised that the HN crowd supported Trump’s and Microsoft’s actions so much. The people here are fairly intelligent and tend to have a good education. We are no stranger to history. We know that “national security risk” has been used to justify terrifying programs like PRISM and the Patriot Act. And despite having this in mind, so many folks here just openly supported what is effectively a hostile and coercive takeover of a foreign corporation. If some of the most educated people in this country can fall victim to populist xenophobia then I don’t have much hope for us overall.