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Like, there's definitely questions to be had about international accounting, but some of the complexity is because national subsidiaries rarely operate in isola
by goatinaboat 6y ago
Like, there's definitely questions to be had about international accounting, but some of the complexity is because national subsidiaries rarely operate in isolation, and valuing much of what they get from their parent organisation is exceptionally hard.
The very, very easy solution is for every corporate entity to be taxed on revenue in each jurisdiction. E.g. if I am in the UK and I spend £4 on a coffee in Starbucks then their legal entity in the UK now owes the taxman £0.40 (for example). How they pay their operating costs and internally transfer the remainder of £3.60 to their parent company is up to them.
- scrollaway 6y agoYou just reinvented VAT.
- goatinaboat 6y agoYou just reinvented VAT. VAT is passed “through” a company, I mean for this to be charged to the company on what is normally considered income. Essentially, since corporations are supposedly people, they can pay income tax like people.
- gsnedders 6y agoSo you're just replacing a profit tax with a revenue tax? For low-margin industries that'll have a significant impact, and grocery stores for example will be heavily hit by it (Tesco, for example, made £1.3B pre-tax profit on £64.8B revenue, which is roughly expected for the industry), with consequential rises in the prices of food. A revenue tax disproportionately hits low-margin industries, which typically account for a disproportionate amount of expenditure of low-income households, which is likely a bad thing.