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>>What can we do? It's a tough question. The tendency is to react superficially: Moralizing reactions, emotional reaction, first principles takes. The way tax

>>What can we do? It's a tough question. The tendency is to react superficially: Moralizing reactions, emotional reaction, first principles takes. The way tax actually works is via accounting "standards," tax law and corporation law... across multiple jurisdictions. A thousand-detail complex , where morals, emotions and first principles are literally meaningless. Actual meaning can only be derived with scenario plans and spreadsheets. Words like "profit," "company," "revenue" and such don't have inherent meanings, in that world. They're just objects with associated rules. The pro-corporate side of this debate (debate is the wrong word) deals entirely in the latter terms. Terms that the majority of journalists and politicians can't work with. They tend to win. When the other side does consider the reality of mess, they tend to conclude radical/unrealistic conclusions like "throw everything out and start from scratch." At this point, complexity is hardened by international agreements and trade rules. IMO the actual place to start is corporation law, not tax law. If entities can own other entities, or part thereof in an endless cascade...words like "tax rate" have no meaning. Another, more radical approach is rethinking the idea of public wealth. The currently ongoing collapse of monetarism is, perhaps, an opportunity. Tax public companies x% of their shares per year. Hold, to avoid price deflation. Offload shares as part of macroeconomic/monetary policy (ie, when we run deficits), to avoid inflationary scenarios such as the current one. I would take the same approach for wealth taxes. Capital gains, property, etc. Tax x% of current market value annually, not income or realized gains. It won't be perfect, but everything gets marked to market eventually.

gruez 5y ago
>Another, more radical approach is rethinking the idea of public wealth. The currently ongoing collapse of monetarism is, perhaps, an opportunity. Tax public companies x% of their shares per year. 1. this disproportionately affects companies with higher capital requirements than lower ones. Think spacex compared to a SaaS. 2. this doesn't solve the underlying issue of moving to a jurisdiction with lower taxes. let's say US taxes 1% of shares every year, but the company offshores to bermuda. then what?
- dalbasal 5y ago
  >> disproportionately affects companies with higher capital requirements How/Why? >> underlying issue of moving to a jurisdiction with lower taxes Well... nothing simple solves this in full. However, "loophole" in this article works by attributing income from IP licensing (an internal transaction between Apple owned entities) to Ireland, which does not consider this a taxable transaction. A "share tax" would apply to the same entity that shareholders own a stake in, it doesn't try to disentangle subsidiary structures. Companies might try to list on Bermuda's stock exchange. I wouldn't discount that possibility, but it won't happen overnight.
  - gruez 5y ago
    >How/Why? Because a company's value (and therefore its stock price) is determined partly by how much assets it has on hand. A company that's capital intensive by definition bring in less money for the same amount of capital invested. Think how much money you need to invest to get spacex off the ground (r&d, rockets, manufacturing facilities, etc.) and how much profit it brings in, compared to how much investment a SaaS needs (a laptop) and how much profit it can bring in (hundreds of thousands? millions?). Under a tax scheme that taxes based on company's shares, a 1% tax would get you 1% of spacex's IP, rockets, and manufacturing facilities, but a 1% tax on a SaaS would only get you 1% of their laptops. >A "share tax" would apply to the same entity that shareholders own a stake in, it doesn't try to disentangle subsidiary structures. So the US would end up getting 1% ownership of Microsoft USA, which makes zero profit and sends all its profit to Microsoft Bermuda. Once they're about to lose control because they bled too many shares, they'll cut off doing business with Microsoft USA and start doing business with Microsoft America (a newly formed company) instead. >Companies might try to list on Bermuda's stock exchange. I wouldn't discount that possibility, but it won't happen overnight. It might not happen overnight but I guarantee it would happen within the year.

gruez 5y ago

>Another, more radical approach is rethinking the idea of public wealth. The currently ongoing collapse of monetarism is, perhaps, an opportunity. Tax public companies x% of their shares per year. 1. this disproportionately affects companies with higher capital requirements than lower ones. Think spacex compared to a SaaS. 2. this doesn't solve the underlying issue of moving to a jurisdiction with lower taxes. let's say US taxes 1% of shares every year, but the company offshores to bermuda. then what?

dalbasal 5y ago
>> disproportionately affects companies with higher capital requirements How/Why? >> underlying issue of moving to a jurisdiction with lower taxes Well... nothing simple solves this in full. However, "loophole" in this article works by attributing income from IP licensing (an internal transaction between Apple owned entities) to Ireland, which does not consider this a taxable transaction. A "share tax" would apply to the same entity that shareholders own a stake in, it doesn't try to disentangle subsidiary structures. Companies might try to list on Bermuda's stock exchange. I wouldn't discount that possibility, but it won't happen overnight.
- gruez 5y ago
  >How/Why? Because a company's value (and therefore its stock price) is determined partly by how much assets it has on hand. A company that's capital intensive by definition bring in less money for the same amount of capital invested. Think how much money you need to invest to get spacex off the ground (r&d, rockets, manufacturing facilities, etc.) and how much profit it brings in, compared to how much investment a SaaS needs (a laptop) and how much profit it can bring in (hundreds of thousands? millions?). Under a tax scheme that taxes based on company's shares, a 1% tax would get you 1% of spacex's IP, rockets, and manufacturing facilities, but a 1% tax on a SaaS would only get you 1% of their laptops. >A "share tax" would apply to the same entity that shareholders own a stake in, it doesn't try to disentangle subsidiary structures. So the US would end up getting 1% ownership of Microsoft USA, which makes zero profit and sends all its profit to Microsoft Bermuda. Once they're about to lose control because they bled too many shares, they'll cut off doing business with Microsoft USA and start doing business with Microsoft America (a newly formed company) instead. >Companies might try to list on Bermuda's stock exchange. I wouldn't discount that possibility, but it won't happen overnight. It might not happen overnight but I guarantee it would happen within the year.