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While 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 c

While 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 ago
But isn't it good that companies shop around for the cheapest tax rate?
- jhrmnn 5y ago
  In 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 ago
    It minimizes the amount of taxes paid overall, which weakens the state.
    - deleted 5y ago
      [deleted]
    - gmadsen 5y ago
      this 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 ago
      How is weakening the state a good thing?
      - jeofken 5y ago
        State leaders have no incentive to create value, but rather to keep power. Companies must create valuable things people want, or be out of business in a very short time.
        ginko 5y ago
        State leaders have an incentive to get reelected. Companies are only beholden to their shareholders which represent a tiny fraction of the population.
        jlokier 5y ago
        Companies are also beholden to their customers. For all its faults, that does result in some good products.
  - jeofken 5y ago
    Competition in economics is the incentive that has brought the majority of westerners from <$1/day to what we are today - with washing machines, cars, and water toilets no king could previously dream of. Companies compete for shareholders by satisfying as many customers as possible. If states can compete for the best deal for international business, companies can better serve people, and those states can house centres of international trade. It’s not just abstract talk, but incentives that drive us to live different everyday lives than people in guild-economy medieval times, or past slave economies, or how people lived in the GDR or other eastern bloc countries.
    - jhrmnn 5y ago
      > serve people You wanted to write “shareholders”, right?
      - asteroidbelt 5y ago
        It is win-win in market economy. People use Amazon not because they want to make shareholders rich, but because they prefer next day delivery to a trip to a store.
    - 3pt14159 5y ago
      The corporation that uses the roads and operates under the safety of the police and military of a country should not be paying some other country, it barely has anything to do with, a lower tax due to some accounting shenanigans.
- whazor 5y ago
  Now they can still shop around, but probably on all the benefits they will receive.
- 8note 5y ago
  Good for who? The shareholders? The country that's creating the profits? The country where the company is based?
jimbob45 5y ago
Not sure why you’re getting downvoted. Not only are you right, you’re right even without speaking hypothetically because we can actively see this happening with companies moving to Ireland, Switzerland, and others.
coryrc 5y ago
Gee, it's almost like taxing corporate profits twice has caused massive distortions everywhere: biggest stock price bubble, tax residency shopping, etc Tax the wealthy. Don't let them take "charitable" deductions or use tax-exempt IRAs. 100% inheritance tax above $4 million.
- derefr 5y ago
  That’s what taxing corporate income (or more targeted, corporate assets) attempts to do: tax the wealthy. Because by-and-large, wealthy people don’t accomplish the things they want to do by drawing an income and then spending it; but rather by setting up corporate vehicles that have their goal as the corporate mission statement, and then getting other corporations to fund its treasury (as negotiated compensation in deals) rather than funding them personally. Think about it like this: when I want to buy a house, I buy a house. When a billionaire wants to buy a house, they create a property management company (as a subsidiary of their existing business interests) that buys and rents out the house, negotiate for their existing business interests to fund it, and then they rent the house from that PMC. Excess liquid assets sitting in a large corporation’s treasury, are essentially sitting in the wallets of its directors. They’re left there only because the tax implications are better if they’re moved toward their purpose-build vehicles at the last moment possible.
  - asteroidbelt 5y ago
    > That’s what taxing corporate income does: tax the wealthy. No it doesn't. It equally affects both large shareholders and small shareholders. E. g. pension funds will get lower gains, and regular dudes 401k (or whatever they are called in your country) will get smaller yields. I don't have numbers, but I suspect the richest people get only small percent of large corporations income.
  - coryrc 5y ago
    "then they rent the house from that PMC." They'll pay tax on that realized income. And if they build up all that wealth in stock value, then if we don't tax it while they are alive we'll take it when they die, so we'd take away the incentive to hoard all the wealth with those schemes. "That’s what taxing corporate income (or more targeted, corporate assets)" Incorrect. Targeting corporate assets hurts heavy industry. Targeting income hurts low-margin business like grocery. And we already have a tax on corporate profits: capital gains tax on dividends and stock appreciation! It mostly affects people who are doing well and less so people and companies doing poorly. It automatically compensates for market changes (sector doing great paid more, a whole sector slumping pays less).
djbebs 5y ago
What's wrong with that?

disposekinetics 5y ago

But isn't it good that companies shop around for the cheapest tax rate?

jhrmnn 5y ago
In 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 ago
  It minimizes the amount of taxes paid overall, which weakens the state.
  - deleted 5y ago
    [deleted]
  - gmadsen 5y ago
    this 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 ago
    How is weakening the state a good thing?
    - jeofken 5y ago
      State leaders have no incentive to create value, but rather to keep power. Companies must create valuable things people want, or be out of business in a very short time.
      - ginko 5y ago
        State leaders have an incentive to get reelected. Companies are only beholden to their shareholders which represent a tiny fraction of the population.
        jlokier 5y ago
        Companies are also beholden to their customers. For all its faults, that does result in some good products.
- jeofken 5y ago
  Competition in economics is the incentive that has brought the majority of westerners from <$1/day to what we are today - with washing machines, cars, and water toilets no king could previously dream of. Companies compete for shareholders by satisfying as many customers as possible. If states can compete for the best deal for international business, companies can better serve people, and those states can house centres of international trade. It’s not just abstract talk, but incentives that drive us to live different everyday lives than people in guild-economy medieval times, or past slave economies, or how people lived in the GDR or other eastern bloc countries.
  - jhrmnn 5y ago
    > serve people You wanted to write “shareholders”, right?
    - asteroidbelt 5y ago
      It is win-win in market economy. People use Amazon not because they want to make shareholders rich, but because they prefer next day delivery to a trip to a store.
  - 3pt14159 5y ago
    The corporation that uses the roads and operates under the safety of the police and military of a country should not be paying some other country, it barely has anything to do with, a lower tax due to some accounting shenanigans.
whazor 5y ago
Now they can still shop around, but probably on all the benefits they will receive.
8note 5y ago
Good for who? The shareholders? The country that's creating the profits? The country where the company is based?

jimbob45 5y ago

Not sure why you’re getting downvoted. Not only are you right, you’re right even without speaking hypothetically because we can actively see this happening with companies moving to Ireland, Switzerland, and others.

coryrc 5y ago

Gee, it's almost like taxing corporate profits twice has caused massive distortions everywhere: biggest stock price bubble, tax residency shopping, etc Tax the wealthy. Don't let them take "charitable" deductions or use tax-exempt IRAs. 100% inheritance tax above $4 million.

derefr 5y ago
That’s what taxing corporate income (or more targeted, corporate assets) attempts to do: tax the wealthy. Because by-and-large, wealthy people don’t accomplish the things they want to do by drawing an income and then spending it; but rather by setting up corporate vehicles that have their goal as the corporate mission statement, and then getting other corporations to fund its treasury (as negotiated compensation in deals) rather than funding them personally. Think about it like this: when I want to buy a house, I buy a house. When a billionaire wants to buy a house, they create a property management company (as a subsidiary of their existing business interests) that buys and rents out the house, negotiate for their existing business interests to fund it, and then they rent the house from that PMC. Excess liquid assets sitting in a large corporation’s treasury, are essentially sitting in the wallets of its directors. They’re left there only because the tax implications are better if they’re moved toward their purpose-build vehicles at the last moment possible.
- asteroidbelt 5y ago
  > That’s what taxing corporate income does: tax the wealthy. No it doesn't. It equally affects both large shareholders and small shareholders. E. g. pension funds will get lower gains, and regular dudes 401k (or whatever they are called in your country) will get smaller yields. I don't have numbers, but I suspect the richest people get only small percent of large corporations income.
- coryrc 5y ago
  "then they rent the house from that PMC." They'll pay tax on that realized income. And if they build up all that wealth in stock value, then if we don't tax it while they are alive we'll take it when they die, so we'd take away the incentive to hoard all the wealth with those schemes. "That’s what taxing corporate income (or more targeted, corporate assets)" Incorrect. Targeting corporate assets hurts heavy industry. Targeting income hurts low-margin business like grocery. And we already have a tax on corporate profits: capital gains tax on dividends and stock appreciation! It mostly affects people who are doing well and less so people and companies doing poorly. It automatically compensates for market changes (sector doing great paid more, a whole sector slumping pays less).

djbebs 5y ago

What's wrong with that?