5 ms·
This isn't a great article. It's more about the politics than the actual proposal. Bloomberg has a better write up: https://www.bloomberg.com/news/articles/20
by nostromo 5y ago
This isn't a great article. It's more about the politics than the actual proposal.
Bloomberg has a better write up: https://www.bloomberg.com/news/articles/2021-04-08/plans-for-a-bigger-pie-of-global-taxes-sliced-fairly-quicktake https://www.bloomberg.com/news/articles/2021-04-08/plans-for...
To answer your question, this wouldn't create a new organization to collect a global tax. Instead it would give the IRS the authority to tax American companies (say, Google) an additional amount on their overseas earnings. So, if they paid 13% in Irish tax, but the American tax rate is %21, the IRS could charge them the gap (an additional 8%). This would be true in all countries that sign the agreement.
Obviously tax havens would still exist, but they'd be harder for big multinationals (like American tech giants) to abuse.
- hellow0rldz 5y agoLast I checked the US tax code does this already. If the US tax rate is higher you pay the difference!
- maneesh 5y agoI believe that's on personal income tax, not on global corporations.
- coliveira 5y agoFor individuals, not for corporations. Corps can keep their profits oversees, which operates like a 401k that you never need to withdraw from.
- Aerroon 5y agoBut aren't corporations in another country corporations of that country? They follow all the laws and rules of that country, not US ones. When a European has dealings with Google they aren't dealing with Google Inc, they're dealing with Google Ireland Ltd.
- coliveira 5y agoI think the point is that to do this, tax agencies around the world would have to cooperate with American tax agencies, which just creates another level of overseeing that has never happened before. It is another instance of Americans trying to force their wishes on the rest of the world.
- onlyrealcuzzo 5y agoWouldn't a public company report how much tax it pays in different countries? Why would Ireland's tax authority have to cooperate with the IRS for this to work?
- gamblor956 5y agoWe have these things called "tax treaties" that have existed for decades. Tax agencies around the world already cooperate with American tax agencies on matters similar to this. In fact, the proposal would actually reduce the amount of inter-agency cooperation required as it would great reduce the amount of treaty-related work the tax agencies have to carry out.
- russli1993 5y agowhat defines a US company? A company registered in the US, a company headquartered in US, a company with subsidiaries in the US, a company doing transactions into US jurisdiction?
- klmadfejno 5y agoWhy do other countries need to sign the agreement? They don't really seem like they have any part in this process.
- nostromo 5y agoBecause if the US did this by itself, all of our crown jewel companies might leave. So the agreement is an attempt to prevent that from happening. It could still happen. Maybe Amazon would move to the Bahamas, or any other country that doesn't sign the agreement. But the hope is that if most industrialized countries sign on, then that risk would be minimized.
- klmadfejno 5y agoLeave where? Ireland? Amazon might choose to leave Ireland and go to the Bahamas, and that sucks for Ireland, but Amazon's situation doesn't really change. The US can still send a tax bill to Amazon's door.