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The idea that politicians and bureaucracies can defer to external international conventions to be the bad-cop for wildly unpopular policy decisions - and then c
by motohagiography 5y ago
The idea that politicians and bureaucracies can defer to external international conventions to be the bad-cop for wildly unpopular policy decisions - and then claim to be powerless to stop them - is anathema to democratic principles like national representation, consent of the governed, and other concepts of human rights.
This proposal seems like a global group of government affiliated people colluding to fleece each others' citizens instead of serving them. This is literally what conspiracy theorists have been predicting for decades, it's a terrible shame to make them right.
- colechristensen 5y agoI don't think the New World Order conspiracy theorists were particularly paranoid about closing corporate tax haven loopholes.
- motohagiography 5y agoI thought their whole schtick was "one world government," which is precisely what colluding to destroy tax competition is, as is banning capital flight which results from abusive policy.
- axlee 5y agocolluding: to act together secretly or illegally in order to deceive or cheat someone. And please: capital flight being the results of abusive policy? Corporations and wealthy individuals will always try to avoid giving the fair share to the society that enabled their wealth in the first place: the case where wealth moves because of abusive policies is so marginal in the ocean of pure greed. Some countries are fiscal parasites and benefit from the theft of other societies, and this is how we deal with parasites. Should we just watch wealth evaporate away to offshore stashes, wealth that actually belongs to the people?
- dane-pgp 5y ago> wealthy individuals will always try to avoid giving the fair share to the society Given that the median US household pays about $10k in taxes per year, and has a net worth of about $120k, perhaps we also need a global minimum wealth tax of say 8% per year, with a tax free allowance on the first $100m of net worth.
- robertlagrant 5y agoThe fair share is defined by tax law. It's not some additional amount.
- dantheman 5y agoNotice how fair share is never actually stated... How much of your time should you be forced to devote to others - the majority of government spending is on social programs. 1 day a week, 2 days a week? What's the fair share? I'd say it's actually far lower than current tax rates.
- djbebs 5y agoRich people are the only ones paying anything at all. If that's not paying their fair share, how are the 50% of people who don't pay any income taxes at all paying their fair share?
- ris 5y ago> tax competition It is not tax competition. It's tax fleecing. The issue is that companies are paying the rates of low-tax countries while operating by and large in "high"-tax countries and reaping all the benefits from their expensive infrastructure, law enforcement, healthcare, education, welfare (to top up absurdly low employee wages)... all of which gets paid for by "someone else" (you and me). It might be tax competition if a company that decided to pay Bermudan tax rates also had to draw all its talent from Bermudan universities, had to build their massive shipping hubs in Bermuda using Bermudan transport, had to perform their complex legal cases through Bermudan courts, had to have their entire workforce cared for by the Bermudan healthcare system (or pay them enough to go private)... (Nothing against Bermuda, picked totally at random)
- robertlagrant 5y agoIt is tax competition. It's just not also labour/university/transport etc competition all lumped into one huge unwieldy choice.
- ris 5y agoNo - you don't get to go to a supermarket and choose to pay the price listed for the cheapest bottle of wine and walk out with the most expensive bottle of wine.
- cinntaile 5y agoWhile it may be a cowardly way to divert responsibility I don't agree that this is so bad. This problem can only be solved by cooperating, otherwise companies can just shop around for the cheapest taxation rate.
- disposekinetics 5y agoBut isn't it good that companies shop around for the cheapest tax rate?
- jhrmnn 5y agoIn what sense is it good that a company can make profit through a business activity in some country, but instead of paying the tax there, it pays it somewhere else?
- disposekinetics 5y agoIt minimizes the amount of taxes paid overall, which weakens the state.
- deleted 5y ago[deleted]
- gmadsen 5y agothis is a benefit only international corporations get to enjoy, which gives them an unfair advantage in the market. if your goal is to have a few conglomerates rule the world, then this is a good way to do it. Not sure how that is much different from a powerful "state" though
- ginko 5y agoHow is weakening the state a good thing?
- jeofken 5y ago
- vlovich123 5y agoI think you’ve just described all trade treaties. Typically Congress still has to ratify. There’s no anathema to democratic principles in my view. You’ve elected these leaders to represent the interests of the USA. Something you disagree with at some level will always be accomplished because that’s the nature of democracy. In a dictatorship, you have perfect agreement provided that you are in the small group that holds meaningful power.
- elliekelly 5y agoIs a minimum corporate tax “a wildly unpopular policy decision”? I worked on international inversions in the early 2010s and they fell out of favor pretty quickly but I don’t think it was the end of the world. No one needed to do an inversion in order to keep the business afloat, it was purely a play to pad the bottom line. A nice to have but not a must have.
- weatherlight 5y agoInternational corporations are not citizens. That premise is absurd.
- BoxOfRain 5y ago>The idea that politicians and bureaucracies can defer to external international conventions to be the bad-cop for wildly unpopular policy decisions It's as though so many people saw Brexit and completely refused to learn anything from it. In the UK prior to Brexit the EU was often the scapegoat for things that politicians wanted but knew they couldn't get popular support for, the classic example is how the unpopular (and ultimately abortive) attempt to switch the UK fully to the metric system was very much seen as "petty-minded EU bureaucrats getting one over on the British public" in the tabloids when the reality was that almost all of the effort was Westminster's doing, mostly because business interests had been calling for it as a way to ease international trade. The problem is that while falsely blaming an external outgroup for your problems isn't immediately dangerous, it can quickly spiral out of control. Around 2013 blaming the EU for bad policy-making on a wide range of things like immigration, the refugee crisis, a percieved decline in law and order, a creeping sense of political control over public discussion, and a whole list of other things reached its peak and the referendum was basically wrenched out of Cameron's hand. Eventually if you subvert a democracy by blaming your own unpopular choices on an outgroup, the inevitable question people start asking is "why don't we just get rid of $outgroup then? As you say, $outgroup cause all our problems so let's get rid of them and solve all our problems at once" which many billions of pounds and geopolitical bridges burned later is exactly what happened. If nations as you put it "defer to external international conventions to be the bad-cop for wildly unpopular policy decisions" then things like Brexit are the inevitable result. Not only is it inherently wrong to sidestep democracy like that in my opinion, if supranational organisations are blamed for things that are unpopular then their influence will eventually be damaged by this. Organisations like the EU, the UN, and others aren't just limitless negativity sinks for domestic politics - all that political negativity has to go somewhere and eventually it just spills out.
- ineptech 5y agoI think you're misunderstanding the concept here, this has nothing to do with dodging responsibility for unpopular policies. If you think countries shouldn't tax corporate profits at all, great, but that's a separate discussion; this is predicated on the assumption that all countries desire a non-zero corporate tax, and just need a way to get there. The point of this measure is to avoid a coordination trap that leads to corp tax rates converging on zero even though each country does not want that. Such scenarios are well studied, and a mutually agreed upon enforcement mechanism is the optimal solution. If that resembles a conspiracy theory to someone, well, hopefully they can read the wikipedia page on the Prisoners' Dilemma and learn something new.
- doomroot 5y agoLow Corporate tax rates invite corporations into your country. This benefits poor countries more.
- ineptech 5y ago...until a poorer country adopts a lower rate, and the corporation leaves. That's the trap this avoids.
- robertlagrant 5y agoIt's not a trap. The money will just never go to those countries now.
- thescriptkiddie 5y agohttps://en.wikipedia.org/wiki/Prisoner%27s_dilemma https://en.wikipedia.org/wiki/Prisoner%27s_dilemma
- ineptech 5y ago"trap" in this context means "coordination trap" which is a scenario in which competition forces individual actors to adopt policies they don't want, but can't avoid. Imagine you and I are neighboring farmers who irrigate our fields from the same river. Our farms grow, as does our water use, until we're each using half the water. I buy a bigger water pump and start sucking up most of the water, leaving you with dying crops. So you go out and buy an even bigger pump; now you're getting most of the water, and some of my crops are dying. What's the result? There are only two outcomes here: either we agree to split the water, or we spend more and more money on larger and larger pumps until neither of us has any profit left over. The latter outcome is the "trap" - neither of us wants to spend every spare dollar on pumps, but unless we come up with some agreement, that's what will happen.
- nickpp 5y agoIt's a cartel of violence monopolies putting together a deal to raise their protection tax.
- ericffr 5y agoAs a normal guy, it is hard to understand the extremes to which a company will avoid taxes, basically getting all the profit to it's stakeholders, and none to the ones who made it possible for them to succeed (the workers, the ones who built the roads, the ones who provides the education to their kids...)
- robertlagrant 5y agoHigher corporation tax ignores the presence of that instinct. If there's more tax on profits, then businesses need to reduce costs (e.g. salaries for workers such as road builders) to compensate.
- CrazyStat 5y agoRaising corporate taxes is generally popular, not "wildly unpopular." For example, in a recent poll 65% of Americans support raising corporate taxes [1]. This number has been fairly steady over time. It's even higher when you ask about closing loopholes that allow international tax havens, as this 15% minimum tax agreement is trying to do--70-85% support [2]. The only terrible shame here is you laundering your opinion on corporate taxes by making false claims about them being wildly unpopular. [1] https://morningconsult.com/2021/04/07/infrastructure-corporate-tax-hikes-polling/ https://morningconsult.com/2021/04/07/infrastructure-corpora... [2] https://americansfortaxfairness.org/files/Polling-Questions-on-Corporate-Tax-Issues-as-of-8-28-14.pdf https://americansfortaxfairness.org/files/Polling-Questions-...
- conanbatt 5y ago65% is not enough to justify a loss of sovereignty. Once many countries agree to a treaty like this one, some country wont and becomes a tax haven and suddenly the target of sanctions and political pressure. This is the case with the OCDE literally calling countries with favorable taxation "tax paradises".
- robomartin 5y ago65% of Americans have no clue what it takes to run a business of any scale. They can barely calculate a tip at the restaurant, yet they think they are qualified to make decisions on taxation. The flavor of democracy we practice has been good. However, we must be honest enough to admit it can degenerate into mob rule, which generally means decisions are made by the most gullible and ignorant among us on any specific topic. Simple example: There is no way my vote on a whole range of medical issues should have the same value as that of a medical professional, such as my wife. While I have a reasonable understanding of biology, the difference in knowledge and understanding in this area of knowledge is massive. In other words, I am as ignorant about medical matters as she is about engineering. It isn’t an insult to classify me as ignorant in this category. It’s the truth. Why do our votes have the same value? So, yes, 65% of Americans want to raise business taxes. They are ignorant fools being led by the nose by politicians using this ignorance to gain votes at their expense. The most important reality to understand us that politicians are never negatively affected by some of the nonsense they push. They don’t lose their jobs, careers or level of pay. On the other hand, the fools who buy their nonsense very often end-up with the short end of the stick. Raise business taxes? No problem. More businesses will go to China if they are able to. If they can’t, they’ll reduce costs through automation. Some will do both. In a globalized economy we need lower taxes. Zero would be an even better number. Anyone who thinks otherwise suffers from a serious deficiency in perspective.
- silicon2401 5y ago> This is literally what conspiracy theorists have been predicting for decades, it's a terrible shame to make them right. When conspiracy theorists start being right, you need to question whether they're crazier for believing their theories no matter what, or if it's crazier to believe that they're wrong no matter what. Things like this are why I've never fallen for the promise that globalization and open borders are good for anybody but the ultra-rich, maybe.
- justicezyx 5y ago> to fleece each others' citizens instead of serving them How is that so? More tax for the government, at least that benefits government workers and public servants positions.
- GoodJokes 5y agoThis is so disconnected from reality that I fear you commented on the wrong article.
- jollybean 5y agoI don't think this is a very good characterisation at all. Nations don't have a lot of control over what goes on outside their borders. They can try, but it's hard. So you end up with weird 'race to the bottom' scenarios where everyone is trying to out-do one another with lower rates i.e. a giant prisoner's dilemma. Something needs to be done collectively to sort out the problem and this kind of activity is how it's done. This effort is not about 'fleecing' it's more or less trying to but a lower bound on corporations ability to avoid paying taxes. It's the opposite of 'not serving their citizens' - it's making sure that taxation is applied to international corps in some consistent way. I don't think 'conspiracy theorists' have been talking about this one.