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Precisely. But instead of solving this problem inside US they want to re-engineer the whole globe. Most countries are mad about multinationals, most of them ri

Precisely. But instead of solving this problem inside US they want to re-engineer the whole globe. Most countries are mad about multinationals, most of them rich US multinationals. If the US would do a proper job of taxing their own corporations none of this would be necessary. Interesting how this is just in time for the Dutch sandwich scheme to expire. Clearly something else was missing!

onlyrealcuzzo 5y ago
How else do you solve this in the US? Company A sells all of its IP to Ireland. They have the Irish company charge them 100% of the profits for IP. Poof. No US taxable income. What's your magic beans solution for this beside what the IRS plans to do?
- coliveira 5y ago
  It is very simple: just make corporate profits for US corporations (or more sensibly, the difference in taxes) taxable on the US, wherever it is made. This is already the rule for individuals.
  - deleted 5y ago
    [deleted]
  - onlyrealcuzzo 5y ago
    "Wherever it is made" is simple when it comes to tech. And, anyway, almost nothing tech is made in the US. The IRS has a (separate?) issue to deal with this - that countries will pay tax primarily based on the country where the sales take place.
- pseudo0 5y ago
  Why not just cut the corporate rate to 0 and raise the necessary funds through a VAT? No amount of fancy accounting tricks will eliminate companies' dependence on the US consumer market.
  - onlyrealcuzzo 5y ago
    Because the Federal government doesn't have a sales tax? This system is easier than getting all 3 branches of the government to impose a VAT. And also, that doesn't solve the problem. If you're Apple - you have only pay taxes on your sales in the US. If you're a smaller company, you pay taxes on all your profits, plus a VAT on your sales in the US.
    - pseudo0 5y ago
      What's stopping the federal government from implementing a VAT? I realize there's a ton of legal and political inertia, but theoretically it seems like it would be an improvement. In an ideal system everyone would charge a VAT rather than a corporate tax, resulting in a level playing field for foreign profits as well.
ericmay 5y ago
Could you walk us through your proposed solution? Like what the United States could be doing that would be a proper job of taxing its own corporations?
- thrill 5y ago
  Set guaranteed tax rates that make keeping money in the US attractive instead of trying to punish those who find the business practices of other sovereign nations offering better treatment.
  - klyrs 5y ago
    Does this mean reducing taxes to 0%, so that corporations don't need to jump through hoops to get the same effect in other jurisdictions?
coliveira 5y ago
Yes, the US knows the exact amount their corporations are NOT paying taxes on. Just apply a tax and be done. Instead, they want to define what other countries will do, in order to fix the US tax leaks. I see this more as another attempt to control other countries than a real tax proposal.
toast0 5y ago
What does a proper job of taxing US corporations look like? Currently, US corporations have a minimum tax of 10% on global income or 20% on US income; sounds like the numbers are proposed to change to 15% and 28% (or something; NYT paywall is loading too fast today, and it's a proposed law so the details aren't set and not worth fighting over); and the US is saying hey, these guys are going to pay 15% on income from your country, you may as well have them pay it to you instead. The AMT on global income was part of the Trump tax changes, and is a departure from the full corporate rate on global income, but only due when/if money made it back to the US. I imagine a next step would be charging multinationals headquartered elsewhere but operating in the US the AMT on their global income. That's kind of far reaching though, so if they can get a few major countries on board instead, that's better.

onlyrealcuzzo 5y ago

How else do you solve this in the US? Company A sells all of its IP to Ireland. They have the Irish company charge them 100% of the profits for IP. Poof. No US taxable income. What's your magic beans solution for this beside what the IRS plans to do?

coliveira 5y ago
It is very simple: just make corporate profits for US corporations (or more sensibly, the difference in taxes) taxable on the US, wherever it is made. This is already the rule for individuals.
- deleted 5y ago
  [deleted]
- onlyrealcuzzo 5y ago
  "Wherever it is made" is simple when it comes to tech. And, anyway, almost nothing tech is made in the US. The IRS has a (separate?) issue to deal with this - that countries will pay tax primarily based on the country where the sales take place.
pseudo0 5y ago
Why not just cut the corporate rate to 0 and raise the necessary funds through a VAT? No amount of fancy accounting tricks will eliminate companies' dependence on the US consumer market.
- onlyrealcuzzo 5y ago
  Because the Federal government doesn't have a sales tax? This system is easier than getting all 3 branches of the government to impose a VAT. And also, that doesn't solve the problem. If you're Apple - you have only pay taxes on your sales in the US. If you're a smaller company, you pay taxes on all your profits, plus a VAT on your sales in the US.
  - pseudo0 5y ago
    What's stopping the federal government from implementing a VAT? I realize there's a ton of legal and political inertia, but theoretically it seems like it would be an improvement. In an ideal system everyone would charge a VAT rather than a corporate tax, resulting in a level playing field for foreign profits as well.

ericmay 5y ago

Could you walk us through your proposed solution? Like what the United States could be doing that would be a proper job of taxing its own corporations?

thrill 5y ago
Set guaranteed tax rates that make keeping money in the US attractive instead of trying to punish those who find the business practices of other sovereign nations offering better treatment.
- klyrs 5y ago
  Does this mean reducing taxes to 0%, so that corporations don't need to jump through hoops to get the same effect in other jurisdictions?

coliveira 5y ago

Yes, the US knows the exact amount their corporations are NOT paying taxes on. Just apply a tax and be done. Instead, they want to define what other countries will do, in order to fix the US tax leaks. I see this more as another attempt to control other countries than a real tax proposal.

toast0 5y ago

What does a proper job of taxing US corporations look like? Currently, US corporations have a minimum tax of 10% on global income or 20% on US income; sounds like the numbers are proposed to change to 15% and 28% (or something; NYT paywall is loading too fast today, and it's a proposed law so the details aren't set and not worth fighting over); and the US is saying hey, these guys are going to pay 15% on income from your country, you may as well have them pay it to you instead. The AMT on global income was part of the Trump tax changes, and is a departure from the full corporate rate on global income, but only due when/if money made it back to the US. I imagine a next step would be charging multinationals headquartered elsewhere but operating in the US the AMT on their global income. That's kind of far reaching though, so if they can get a few major countries on board instead, that's better.