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Perhaps it's time we think of a tax tier for large companies that generate over $1B in revenues. This tax would apply on gross revenues, not on profit, to close

Perhaps it's time we think of a tax tier for large companies that generate over $1B in revenues. This tax would apply on gross revenues, not on profit, to close potential loop holes, and it should reflect the social and environmental impact that company ($1B+) has on society. Large companies ($1B+) that have a negative impact on the environment and society, should pay more taxes to disincentivize the harmful behaviour. On the other hand companies that have a positive impact on the environment and the society should pay less. Also, any billionaire person who labels themselves as a philanthropist should pay double digit % taxes. After all, through taxes we contribute to public good, infrastructure, social support and public institutions. Privately controlled investment funds labeled as charities don't count. Everyone knows.

fredgrott 5y ago
the biggest impact of such for such corporations is the removal of the foreign income tax credit as is also makes it somewhat uneconomical to attempt pet to doge taxes vis the high tech gambits of underpricing a virtual IP and selling it to another controlled corporation to hide revenue in at the lower tax rate In fact is has been recommended by most economists
- kenneth 5y ago
  I don't see how taxing foreign income would work. A corporation would just spinoff foreign business to avoid it. If you tax those it'd just reincorporate offshore. The USA simply can't tax the foreign income of a foreign company.
  - Sanzig 5y ago
    If any nation on Earth can pull this off (or a wealth tax for that matter), it's the USA. The reach of the US financial system is immense: blocking off access or otherwise making life miserable for companies that attempt to offshore operations on paper is certainly something the US could do if it has the political will. In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders. This was extraordinarily unpopular with other countries: I'm in Canada, and the amount of negative press was astounding. In addition to privacy concerns (the law applied to dual-citizens, including "accidental Americans" who didn't know they held US citizenship), implentation proved to be very expensive for foreign banks. However, the US played hardball: if a financial institution was non-compliant with the provisions of FATCA, the US government took 30% of any payments made to them as tax. There was tons of grumbling, but foreign financial institutions went ahead and implemented it. To add insult to injury, the US is itself not compliant with FATCA, as the information sharing is supposed to be reciprocal if a foreign country signs a reciprocal treaty. That has not happened. Access to the US financial system is an extraordinarly big stick when the US government chooses to wield it. It's often said that preventing offshoring or creating a wealth tax is impossible without global buy in. Really, the US could do it if it wanted to. It would not be popular, but FATCA shows there's precedent. [1] https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...
    - candiodari 5y ago
      It'll still only work if tax policy is globalized. As long as there are tax havens this cannot operate. And the appeal of being a tax haven for small nations is incredible. In most places (e.g. Luxembourg, Basel, Lichtenstein, ...) the "pick your favorite tax scheme" game is tolerated (in Basel you can have your pick of 3 tax schemes. Anything agricultural goes for the French scheme, most of the rest, especially medical technology, for the Swiss one, Car companies like their German tax (I'm guessing to avoid import tax)). And while not quite as impactful, it's still tolerated at e.g. the French-German border. And of course there is the "European exception". EU countries each have their tax policy set so "their" company doesn't get taxed. Even the EU proper has such a company (Airbus). But individual countries do as well: the Netherlands has Shell, France has Total, Belgium has lots of government non-government companies (e.g. Sita, Eurocontrol, BICS, who are "Belgian" but multinationals ...). The incumbent telecom is usually beneficiary of such schemes as well, as well as large medical concerns. And I would like to point out: one thing FATCA (+the preexisting international income tax the US has) has done is make it much more difficult, much less worth it, for US citizens to work abroad. Do we really want that ?
      - Chris2048 5y ago
        It's one thing to talk of equality, in the context of say the US, but what of international equality? Being a tax haven is arguably how small nations achieve this. The US has a large unfair advantage in terms of economy - has done since at least WW2. America skews heavily in favour of freedom - for Americans in America, not so much outside that system.
    - CaptainZapp 5y ago
      > In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders. With the unintended side effect that it can make it incredibly hard, if not impossible, for an American citizen to open a bank account in another country. Even if she's a resident in that country.
incrudible 5y ago
That would heavily penalize high-revenue low-profit-margin industries, such as retail. What's the point? Amazon would split off its profitable parts (AWS/services), which would make the barely profitable parts of Amazon worse for everyone. As far paying taxes: All these billionaires aren't really making that much money, they're mostly owning stuff that may or may not appreciate. The fact that it does appreciate is now mostly a function of monetary policy. If you want to tax that, you really need a wealth tax, which is essentially confiscatory. Good luck keeping that capital ashore. Lastly, even if you did somehow manage to keep billionaires around and tax them, it's not really that much revenue. You might as well not bother with it. It sounds unfair, and it is, but "worse is better" in this case.
- throwanem 5y ago
  > Amazon would split off its profitable parts (AWS/services), which would make the barely profitable parts of Amazon worse for everyone. Okay but how is that actually bad? The barely profitable parts of Amazon, ie the retail operation, are already pretty comprehensively lousy. Making it unprofitable to more or less monopolize retail, the way Amazon does now, seems like it would open competition back up among ecommerce business on a smaller scale. As I've discovered since quitting Amazon myself, with platforms like Stripe and Shopify, human-scale ecommerce no longer needs to be - or is! - the patchwork headache we all remember unfondly from 2005. The experience at point of sale is consistent, reliable, quick, and pleasant. The money goes to support small businesses, rather than being shoveled directly into the flaming mouth of Mammon. And while it does take a little longer for shipments to arrive, that's actually also a net good because almost nothing actually needs the kind of unsustainable next-day Prime treatment that Amazon's retail operation insists on by default. Without Amazon's perverse incentives toward counterfeit garbage, the rate at which I've had what I get match what I order has so far been 100%. And without Amazon Logistics involved, I can be fairly confident besides that whoever did the work of delivering that order probably was not denied the basic human dignity of access to toilet facilities because of rampant Taylorism or for any other reason. You've really made a remarkably strong case for the thing you're arguing against! I doubt that's what you wanted, but I appreciate it all the same.
  - 5y ago
spaetzleesser 5y ago
I agree. Sheer size should be discouraged. These big corporations lead to a business monoculture and hinder innovation by killingn off or buying promising new ideas. Large corporations and billionaires also have an outsize influence on politics at the expense of small business and regular people. They shape the world to their advantage.
Chris2048 5y ago
Or just introduce higher regulations, including the degree to which a corp can compete across different industries. For example, I sometimes thing large corporations can beat out smaller competition purely because they have/can afford a large legal/patent dept, that smaller single-industry players do not. There should also probably be more rules wrt competition - allowing private interests to control TLD/DNS, protocols, Operating systems/ecosystems, hardware specs/compliance, the EM spectrum and other common utilities/services has allowed an extreme bent towards monolithic companies - force theses large corps to spin off internal services! > On the other hand companies that have a positive impact on the environment and the society should pay less. Just have a carbon tax. Setup a general scheme for SMBs, and allow larger corps to setup their own if they can do it more efficiently (regulate that, of course).
cwkoss 5y ago
We should make corporate income taxes progressive. Small businesses should pay little to no tax, megacorps should be taxed strongly enough to encourage spinning off other companies rather than the current strategy of "acquire everything to squelch competition and maximize power". This concentration of power diffuses responsibility and allows megacorps to do evil profitably: a dozen independent amazon subsidiaries would have a much harder time lobbying in lockstep and would likely compete against each other - improving prices for consumers and labor conditions. Free market maximalists should welcome this increased competition. Let's tax the economy of scale and force companies who are not able to utilize economy of scale well to split into multiple smaller companies.

fredgrott 5y ago

the biggest impact of such for such corporations is the removal of the foreign income tax credit as is also makes it somewhat uneconomical to attempt pet to doge taxes vis the high tech gambits of underpricing a virtual IP and selling it to another controlled corporation to hide revenue in at the lower tax rate In fact is has been recommended by most economists

kenneth 5y ago
I don't see how taxing foreign income would work. A corporation would just spinoff foreign business to avoid it. If you tax those it'd just reincorporate offshore. The USA simply can't tax the foreign income of a foreign company.
- Sanzig 5y ago
  If any nation on Earth can pull this off (or a wealth tax for that matter), it's the USA. The reach of the US financial system is immense: blocking off access or otherwise making life miserable for companies that attempt to offshore operations on paper is certainly something the US could do if it has the political will. In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders. This was extraordinarily unpopular with other countries: I'm in Canada, and the amount of negative press was astounding. In addition to privacy concerns (the law applied to dual-citizens, including "accidental Americans" who didn't know they held US citizenship), implentation proved to be very expensive for foreign banks. However, the US played hardball: if a financial institution was non-compliant with the provisions of FATCA, the US government took 30% of any payments made to them as tax. There was tons of grumbling, but foreign financial institutions went ahead and implemented it. To add insult to injury, the US is itself not compliant with FATCA, as the information sharing is supposed to be reciprocal if a foreign country signs a reciprocal treaty. That has not happened. Access to the US financial system is an extraordinarly big stick when the US government chooses to wield it. It's often said that preventing offshoring or creating a wealth tax is impossible without global buy in. Really, the US could do it if it wanted to. It would not be popular, but FATCA shows there's precedent. [1] https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...
  - candiodari 5y ago
    It'll still only work if tax policy is globalized. As long as there are tax havens this cannot operate. And the appeal of being a tax haven for small nations is incredible. In most places (e.g. Luxembourg, Basel, Lichtenstein, ...) the "pick your favorite tax scheme" game is tolerated (in Basel you can have your pick of 3 tax schemes. Anything agricultural goes for the French scheme, most of the rest, especially medical technology, for the Swiss one, Car companies like their German tax (I'm guessing to avoid import tax)). And while not quite as impactful, it's still tolerated at e.g. the French-German border. And of course there is the "European exception". EU countries each have their tax policy set so "their" company doesn't get taxed. Even the EU proper has such a company (Airbus). But individual countries do as well: the Netherlands has Shell, France has Total, Belgium has lots of government non-government companies (e.g. Sita, Eurocontrol, BICS, who are "Belgian" but multinationals ...). The incumbent telecom is usually beneficiary of such schemes as well, as well as large medical concerns. And I would like to point out: one thing FATCA (+the preexisting international income tax the US has) has done is make it much more difficult, much less worth it, for US citizens to work abroad. Do we really want that ?
    - Chris2048 5y ago
      It's one thing to talk of equality, in the context of say the US, but what of international equality? Being a tax haven is arguably how small nations achieve this. The US has a large unfair advantage in terms of economy - has done since at least WW2. America skews heavily in favour of freedom - for Americans in America, not so much outside that system.
  - CaptainZapp 5y ago
    > In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders. With the unintended side effect that it can make it incredibly hard, if not impossible, for an American citizen to open a bank account in another country. Even if she's a resident in that country.

incrudible 5y ago

That would heavily penalize high-revenue low-profit-margin industries, such as retail. What's the point? Amazon would split off its profitable parts (AWS/services), which would make the barely profitable parts of Amazon worse for everyone. As far paying taxes: All these billionaires aren't really making that much money, they're mostly owning stuff that may or may not appreciate. The fact that it does appreciate is now mostly a function of monetary policy. If you want to tax that, you really need a wealth tax, which is essentially confiscatory. Good luck keeping that capital ashore. Lastly, even if you did somehow manage to keep billionaires around and tax them, it's not really that much revenue. You might as well not bother with it. It sounds unfair, and it is, but "worse is better" in this case.

throwanem 5y ago
> Amazon would split off its profitable parts (AWS/services), which would make the barely profitable parts of Amazon worse for everyone. Okay but how is that actually bad? The barely profitable parts of Amazon, ie the retail operation, are already pretty comprehensively lousy. Making it unprofitable to more or less monopolize retail, the way Amazon does now, seems like it would open competition back up among ecommerce business on a smaller scale. As I've discovered since quitting Amazon myself, with platforms like Stripe and Shopify, human-scale ecommerce no longer needs to be - or is! - the patchwork headache we all remember unfondly from 2005. The experience at point of sale is consistent, reliable, quick, and pleasant. The money goes to support small businesses, rather than being shoveled directly into the flaming mouth of Mammon. And while it does take a little longer for shipments to arrive, that's actually also a net good because almost nothing actually needs the kind of unsustainable next-day Prime treatment that Amazon's retail operation insists on by default. Without Amazon's perverse incentives toward counterfeit garbage, the rate at which I've had what I get match what I order has so far been 100%. And without Amazon Logistics involved, I can be fairly confident besides that whoever did the work of delivering that order probably was not denied the basic human dignity of access to toilet facilities because of rampant Taylorism or for any other reason. You've really made a remarkably strong case for the thing you're arguing against! I doubt that's what you wanted, but I appreciate it all the same.
- 5y ago

spaetzleesser 5y ago

I agree. Sheer size should be discouraged. These big corporations lead to a business monoculture and hinder innovation by killingn off or buying promising new ideas. Large corporations and billionaires also have an outsize influence on politics at the expense of small business and regular people. They shape the world to their advantage.

Chris2048 5y ago

Or just introduce higher regulations, including the degree to which a corp can compete across different industries. For example, I sometimes thing large corporations can beat out smaller competition purely because they have/can afford a large legal/patent dept, that smaller single-industry players do not. There should also probably be more rules wrt competition - allowing private interests to control TLD/DNS, protocols, Operating systems/ecosystems, hardware specs/compliance, the EM spectrum and other common utilities/services has allowed an extreme bent towards monolithic companies - force theses large corps to spin off internal services! > On the other hand companies that have a positive impact on the environment and the society should pay less. Just have a carbon tax. Setup a general scheme for SMBs, and allow larger corps to setup their own if they can do it more efficiently (regulate that, of course).

cwkoss 5y ago

We should make corporate income taxes progressive. Small businesses should pay little to no tax, megacorps should be taxed strongly enough to encourage spinning off other companies rather than the current strategy of "acquire everything to squelch competition and maximize power". This concentration of power diffuses responsibility and allows megacorps to do evil profitably: a dozen independent amazon subsidiaries would have a much harder time lobbying in lockstep and would likely compete against each other - improving prices for consumers and labor conditions. Free market maximalists should welcome this increased competition. Let's tax the economy of scale and force companies who are not able to utilize economy of scale well to split into multiple smaller companies.