4 ms·

> many big tech paid less than 1% on non-USA income. paid to whom? I ask because I have read that (for example) a U.S. company may pay the U.S. taxes of less

> many big tech paid less than 1% on non-USA income. paid to whom? I ask because I have read that (for example) a U.S. company may pay the U.S. taxes of less than 1% on foreign income, but that's because that income was generated by (example) a German subsidiary which fully paid taxes in Germany, where it was earned. Point is, taxes internationally are really a mess.

wolverine876 5y ago
Perhaps you are unaware, but companies often shift revenue to countries where taxes are lower. > these narratives sometimes look scandalous when they're actually following tax laws of foreign countries "correctly". It could be both; nobody said it was illegal. Following the law doesn't make something right - many horrible things are illegal; the law isn't designed as optimal behavior. And in many situations, they write the laws for themselves. Regardless, clearly they need to pay their share, and their share is more than 1%.
- ethbr0 5y ago
  As parent said, in international terms, you can effectively shift profits wherever you want, assuming a sufficiently large and non-physical business. Which led to this entire recent mess. It was less of a problem when steel needed to be bought here, and goods needed to be sold here. Can't very well claim that here is actually there. But with intangible goods, you can! Who's to say what the fair price of using Google Nigeria using Google's brand is? Which led to a game of "Where to put the profits, without being too obvious about it?" Which led to a race to the bottom in tax rates to attract business. Effectively, this base rate is good for major developed countries (who typically didn't need to have the lowest rates), international businesses (who had to play convoluted shell games, without ever knowing the true rules, to stay competitive), and even smaller or developing countries (who now don't have to cut their own throats to attract businesses). Which is probably why an agreement happened. Nobody liked the old game, but it was a competitive necessity.
  - jjtheblunt 5y ago
    nice explanation!
  - wolverine876 5y ago
    > Effectively, this base rate is good for ... international businesses (who had to play convoluted shell games, without ever knowing the true rules, to stay competitive) > Which is probably why an agreement happened. Nobody liked the old game, but it was a competitive necessity. Also a good explanation of how regulations benefit businesses. Unregulated markets are highly inefficient, diverting many resources to that kind of BS. Also, most people actually don't like cheating each other, even if it's legal, and want to operate in places where there's not competitive pressure to do it. (Of course, not every regulation is beneficial to everyone.)

wolverine876 5y ago

Perhaps you are unaware, but companies often shift revenue to countries where taxes are lower. > these narratives sometimes look scandalous when they're actually following tax laws of foreign countries "correctly". It could be both; nobody said it was illegal. Following the law doesn't make something right - many horrible things are illegal; the law isn't designed as optimal behavior. And in many situations, they write the laws for themselves. Regardless, clearly they need to pay their share, and their share is more than 1%.

ethbr0 5y ago
As parent said, in international terms, you can effectively shift profits wherever you want, assuming a sufficiently large and non-physical business. Which led to this entire recent mess. It was less of a problem when steel needed to be bought here, and goods needed to be sold here. Can't very well claim that here is actually there. But with intangible goods, you can! Who's to say what the fair price of using Google Nigeria using Google's brand is? Which led to a game of "Where to put the profits, without being too obvious about it?" Which led to a race to the bottom in tax rates to attract business. Effectively, this base rate is good for major developed countries (who typically didn't need to have the lowest rates), international businesses (who had to play convoluted shell games, without ever knowing the true rules, to stay competitive), and even smaller or developing countries (who now don't have to cut their own throats to attract businesses). Which is probably why an agreement happened. Nobody liked the old game, but it was a competitive necessity.
- jjtheblunt 5y ago
  nice explanation!
- wolverine876 5y ago
  > Effectively, this base rate is good for ... international businesses (who had to play convoluted shell games, without ever knowing the true rules, to stay competitive) > Which is probably why an agreement happened. Nobody liked the old game, but it was a competitive necessity. Also a good explanation of how regulations benefit businesses. Unregulated markets are highly inefficient, diverting many resources to that kind of BS. Also, most people actually don't like cheating each other, even if it's legal, and want to operate in places where there's not competitive pressure to do it. (Of course, not every regulation is beneficial to everyone.)