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> While that spurred more than 130 countries to agree a deal to ensure big companies pay a global minimum tax rate of 15%, aimed at making it harder for them to

> While that spurred more than 130 countries to agree a deal to ensure big companies pay a global minimum tax rate of 15%, aimed at making it harder for them to avoid taxation, the millionaires said the wealthy still needed to contribute more. For too long we've let the supporters of inequality get away with arguments like "Well if you increased taxes on the rich / corporations, they'd just move somewhere else". While such claims may be true up to a point, they miss the fact that these coordination problems can be solved, even in the face of vested interests trying to profit off defecting from the common good.

pdonis 5y ago
> the supporters of inequality Opposing taxation is not the same as "supporting inequality". In fact, considering where the bulk of government spending goes, giving the government less to spend would probably reduce inequality.
- dane-pgp 5y ago
  > giving the government less to spend would probably reduce inequality. If you have some data comparing inequality and tax revenue (as a percentage of GDP) for countries around the world, I'd love to see if there is some sort of correlation. Of course, a correlation wouldn't prove causation, but it would give me more confidence in what policy to support than your "probably".
sva_ 5y ago
Yeah that tax can't come soon enough, and I think it will happen at this point. It's probably too little, but a good start. I wonder if there have ever been any calculations for different countries, on how much they've missed out through this kind of tax evasion that has been going on. It's probably hard to quantify, but I'd still be curious to know in what ballpark it might be.
- nightski 5y ago
  Are you in the U.S.? If so what specifically do you feel that tax revenue is going to do for you? The government is currently running a $1T-$1.5T deficit, meaning they haven't cared about tax revenue as it relates to spending in quite some time. I'd love to reduce wealth inequality but I just don't think throwing all that money at the government is a viable path towards that goal.
  - wolverine876 5y ago
    So what solution do you offer? It's just reactionary to oppose a solution. The anti-government stuff needs some support and nuance. Government isn't all good or bad; it is what we want it to be. If we want it to invest in our people, such as through education, health care, housinng, etc., nothing is stopping us. We're not powerless at all.
    - AnthonyMouse 5y ago
      The government giving you $100 for school is strictly worse than the government just giving you $100. You can spend it on school if you want to go to school, on housing if you want better housing, on child care if you need child care, or on whatever it is that you need. Which you know better than a committee of politicians who have never even met you. For anyone paying more than zero taxes, this is the same as a $100 tax cut. For anyone who is paying zero taxes, we can still do the same thing by giving them a tax credit (e.g. increase the EITC) and letting their effective rate be negative. This is better than subsidizing student loans (thereby inflating the cost of college) or any of the other bad ideas politicians have had over the years. But it forecloses the majority of political corruption. Which is why it's good, and also why it's unpopular.
      - wolverine876 5y ago
        > Which you know better than a committee of politicians who have never even met you. If you haven't met your local elected representatives, that might be on you. It's not hard to meet them, and usually IME they make an effort to know voters. > The government giving you $100 for school is strictly worse than the government just giving you $100. We the people might be willing to fund schooling, but not other things. Regardless, I tend to agree with giving cash for charitable purposes. But where is this coming from? Who disagreed? > Which is why it's good, and also why it's unpopular. How do you know that? School vouchers are popular, and people could have said the same about them. These rants about government - that we see commonly - are somehow given a pass for establishing a factual basis and making strong arguments. But they don't really say much except express frustration.
wolverine876 5y ago
> For too long we've let the supporters of inequality get away with arguments like ... They always have arguments, but history shows that we can successfully tax wealthy people. It's not hard.
- AnthonyMouse 5y ago
  This is not historically accurate. Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. But that's also around when we stopped enforcing antitrust, which is where the recent concentration of wealth actually came from.
  - wolverine876 5y ago
    > Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly.
    - AnthonyMouse 5y ago
      > I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The main problem with IRS audits is that they choose taxpayers at random to be subject to an expensive time consuming audit which the taxpayer doesn't get reimbursed for even if the IRS finds nothing wrong with their returns. Small business owners are generally the ones this happens to because they're the ones who exceed the income threshold to get audited and they're the ones with complicated tax returns that are expensive to audit. Democrats have figured out that if they encourage this, Republicans have to spend political capital preventing it or their constituents get really mad. This could be easily solved by having the government pay the taxpayer's time and expenses for the audit, but neither party really wants to do that because it would "cost money." (It costs money either way, but that way it would have to be formally accounted for and spread evenly among taxpayers instead of subjecting random unlucky ones to a disproportionate expense.) But tax evasion is different than tax avoidance. One is illegal, the other is restructuring your activities to minimize your taxes while still complying with the law, e.g. by arranging for profits to accumulate in a subsidiary in a country with a low tax rate. It's typically the latter that corporations and rich people do to have low tax burdens. > The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly. Before the 1980s the highest nominal tax rates were higher, but nobody actually paid them because there were so many loopholes. People were literally deducting the cost of their personal vehicle from their taxes etc. They closed the loopholes and lowered the top rates at the same time, which basically canceled out. Federal revenues as a percent of GDP have been essentially flat since the end of WWII: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S
AnthonyMouse 5y ago
The fundamental question nobody wants to answer is what is corporate tax supposed to be on? People keep saying "profit," but it's an international supply chain. Is the "profit" attributable to the jurisdiction where the product is designed? Where it's manufactured? Where it's sold? They're all in different countries. There is no principled way to attribute a specific portion of the profit to a specific thing -- they're each inherently necessary in order to make the money. Nobody wants to say "we are going to tax them in the place where they make the products" because then low tax jurisdictions would have a huge advantage to attract manufacturing. But it's the same thing if you say you're going to tax them in the place where the product is designed or sold or anything else. Making a choice allows them to arbitrage that choice. But not making a choice is even worse because then they get to arbitrage everything. The best one is to tax them where the customers are, because it's really hard to move the customers. But then "corporate tax" is just VAT. Which everybody hates specifically because it works, and therefore causes lower retirement account returns and higher consumer prices by the combined amount of money which is now going to the government. And that's really what the problem is. To have it not wreck the economy the change needs to be revenue neutral. Combine it with a tax cut for the working class in the same amount. Because then you might actually do something good. But most of the people asking for it are asking for it because they want to spend more money.
vecplane 5y ago
Not true - nations compete to attract talent and capital, and one means of attracting these things is lower taxes and favorable regulations. Are you arguing that nations should stop competing for talent and capital, because the taxes get a little too low in some places?
mohanmcgeek 5y ago
> these coordination problems can be solved If you focus too much on _punishing_ the companies rather than solving real problems such as government finance, you'll end up with ridiculous ideas like this. If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. AND even if that weren't the case, I as the sovereign, get to decide how much the tax should be. Not a bunch of edicts from people who can't run their own finances properly.
- imtringued 5y ago
  >If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. Are you sure, what about a potential competing country that reduces taxes to 9%? The paradox of competition states that you will get none of the benefits of increased competition in a zero sum game like this. Taxes will be cut to 0%. So you can now either get rid of corporate taxes entirely or form a global consensus. The former is preferable but it would require land value taxes which are an even bigger threat to the rich than corporate taxes which are just a formality that is easily avoided. > Not a bunch of edicts from people who can't run their own finances properly. It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit?
  - mohanmcgeek 5y ago
    > what about a potential competing country that reduces taxes to 9%? If a country can manage its finances just fine while taxing corporations at 9%, what about them? > Taxes will be cut to 0%. As unrealistic as it sounds, this is bad exactly how? > It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit? No point in arguing with you then.

pdonis 5y ago

> the supporters of inequality Opposing taxation is not the same as "supporting inequality". In fact, considering where the bulk of government spending goes, giving the government less to spend would probably reduce inequality.

dane-pgp 5y ago
> giving the government less to spend would probably reduce inequality. If you have some data comparing inequality and tax revenue (as a percentage of GDP) for countries around the world, I'd love to see if there is some sort of correlation. Of course, a correlation wouldn't prove causation, but it would give me more confidence in what policy to support than your "probably".

sva_ 5y ago

Yeah that tax can't come soon enough, and I think it will happen at this point. It's probably too little, but a good start. I wonder if there have ever been any calculations for different countries, on how much they've missed out through this kind of tax evasion that has been going on. It's probably hard to quantify, but I'd still be curious to know in what ballpark it might be.

nightski 5y ago
Are you in the U.S.? If so what specifically do you feel that tax revenue is going to do for you? The government is currently running a $1T-$1.5T deficit, meaning they haven't cared about tax revenue as it relates to spending in quite some time. I'd love to reduce wealth inequality but I just don't think throwing all that money at the government is a viable path towards that goal.
- wolverine876 5y ago
  So what solution do you offer? It's just reactionary to oppose a solution. The anti-government stuff needs some support and nuance. Government isn't all good or bad; it is what we want it to be. If we want it to invest in our people, such as through education, health care, housinng, etc., nothing is stopping us. We're not powerless at all.
  - AnthonyMouse 5y ago
    The government giving you $100 for school is strictly worse than the government just giving you $100. You can spend it on school if you want to go to school, on housing if you want better housing, on child care if you need child care, or on whatever it is that you need. Which you know better than a committee of politicians who have never even met you. For anyone paying more than zero taxes, this is the same as a $100 tax cut. For anyone who is paying zero taxes, we can still do the same thing by giving them a tax credit (e.g. increase the EITC) and letting their effective rate be negative. This is better than subsidizing student loans (thereby inflating the cost of college) or any of the other bad ideas politicians have had over the years. But it forecloses the majority of political corruption. Which is why it's good, and also why it's unpopular.
    - wolverine876 5y ago
      > Which you know better than a committee of politicians who have never even met you. If you haven't met your local elected representatives, that might be on you. It's not hard to meet them, and usually IME they make an effort to know voters. > The government giving you $100 for school is strictly worse than the government just giving you $100. We the people might be willing to fund schooling, but not other things. Regardless, I tend to agree with giving cash for charitable purposes. But where is this coming from? Who disagreed? > Which is why it's good, and also why it's unpopular. How do you know that? School vouchers are popular, and people could have said the same about them. These rants about government - that we see commonly - are somehow given a pass for establishing a factual basis and making strong arguments. But they don't really say much except express frustration.

wolverine876 5y ago

> For too long we've let the supporters of inequality get away with arguments like ... They always have arguments, but history shows that we can successfully tax wealthy people. It's not hard.

AnthonyMouse 5y ago
This is not historically accurate. Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. But that's also around when we stopped enforcing antitrust, which is where the recent concentration of wealth actually came from.
- wolverine876 5y ago
  > Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly.
  - AnthonyMouse 5y ago
    > I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The main problem with IRS audits is that they choose taxpayers at random to be subject to an expensive time consuming audit which the taxpayer doesn't get reimbursed for even if the IRS finds nothing wrong with their returns. Small business owners are generally the ones this happens to because they're the ones who exceed the income threshold to get audited and they're the ones with complicated tax returns that are expensive to audit. Democrats have figured out that if they encourage this, Republicans have to spend political capital preventing it or their constituents get really mad. This could be easily solved by having the government pay the taxpayer's time and expenses for the audit, but neither party really wants to do that because it would "cost money." (It costs money either way, but that way it would have to be formally accounted for and spread evenly among taxpayers instead of subjecting random unlucky ones to a disproportionate expense.) But tax evasion is different than tax avoidance. One is illegal, the other is restructuring your activities to minimize your taxes while still complying with the law, e.g. by arranging for profits to accumulate in a subsidiary in a country with a low tax rate. It's typically the latter that corporations and rich people do to have low tax burdens. > The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly. Before the 1980s the highest nominal tax rates were higher, but nobody actually paid them because there were so many loopholes. People were literally deducting the cost of their personal vehicle from their taxes etc. They closed the loopholes and lowered the top rates at the same time, which basically canceled out. Federal revenues as a percent of GDP have been essentially flat since the end of WWII: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S

AnthonyMouse 5y ago

The fundamental question nobody wants to answer is what is corporate tax supposed to be on? People keep saying "profit," but it's an international supply chain. Is the "profit" attributable to the jurisdiction where the product is designed? Where it's manufactured? Where it's sold? They're all in different countries. There is no principled way to attribute a specific portion of the profit to a specific thing -- they're each inherently necessary in order to make the money. Nobody wants to say "we are going to tax them in the place where they make the products" because then low tax jurisdictions would have a huge advantage to attract manufacturing. But it's the same thing if you say you're going to tax them in the place where the product is designed or sold or anything else. Making a choice allows them to arbitrage that choice. But not making a choice is even worse because then they get to arbitrage everything. The best one is to tax them where the customers are, because it's really hard to move the customers. But then "corporate tax" is just VAT. Which everybody hates specifically because it works, and therefore causes lower retirement account returns and higher consumer prices by the combined amount of money which is now going to the government. And that's really what the problem is. To have it not wreck the economy the change needs to be revenue neutral. Combine it with a tax cut for the working class in the same amount. Because then you might actually do something good. But most of the people asking for it are asking for it because they want to spend more money.

vecplane 5y ago

Not true - nations compete to attract talent and capital, and one means of attracting these things is lower taxes and favorable regulations. Are you arguing that nations should stop competing for talent and capital, because the taxes get a little too low in some places?

mohanmcgeek 5y ago

> these coordination problems can be solved If you focus too much on _punishing_ the companies rather than solving real problems such as government finance, you'll end up with ridiculous ideas like this. If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. AND even if that weren't the case, I as the sovereign, get to decide how much the tax should be. Not a bunch of edicts from people who can't run their own finances properly.

imtringued 5y ago
>If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. Are you sure, what about a potential competing country that reduces taxes to 9%? The paradox of competition states that you will get none of the benefits of increased competition in a zero sum game like this. Taxes will be cut to 0%. So you can now either get rid of corporate taxes entirely or form a global consensus. The former is preferable but it would require land value taxes which are an even bigger threat to the rich than corporate taxes which are just a formality that is easily avoided. > Not a bunch of edicts from people who can't run their own finances properly. It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit?
- mohanmcgeek 5y ago
  > what about a potential competing country that reduces taxes to 9%? If a country can manage its finances just fine while taxing corporations at 9%, what about them? > Taxes will be cut to 0%. As unrealistic as it sounds, this is bad exactly how? > It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit? No point in arguing with you then.