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>> disproportionately affects companies with higher capital requirements How/Why? >> underlying issue of moving to a jurisdiction with lower taxes Well... no

>> 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

>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.