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> The proposal is part of an international agreement concluded in October 2021 by nearly 140 countries. The Netherlands is the first country in the European Uni

> The proposal is part of an international agreement concluded in October 2021 by nearly 140 countries. The Netherlands is the first country in the European Union where legislation has been presented to parliament. I am still scratching my head over how this is actually going to work. Representatives from 140 companies signing on via an OECD is a far cry from actual legislation. A corporate income tax would not generate meaningful revenue for most countries. And such that it does, it only generates revenue by cannibalizing other taxes (income, sales, capital gains, etc) at the cost of a deadweight loss of investments. But there is a huge game theory problem here. Even if you get collective sign-on, this would be an EXTREMELY unstable agreement - it's like the Prisoners' Dilemma in that there is no Nash Equilibrium. There would always be an incentive for a handful of countries to back out of the deal. And the more countries sign on, the more incentive there is to back out.

dv_dt 3y ago
You say this >A corporate income tax would not generate meaningful revenue for most countries. Then you say this > And such that it does, it only generates revenue by cannibalizing other taxes (income, sales, capital gains, etc) at the cost of a deadweight loss of investments. If it's not meaningful revenue, how is it a meaningful loss of investments? This also seems to ignore if it's a minimum among a wide swath of nations, what investment loss would it incur?
- legitster 3y ago
  https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss There are a lot of theoretical tax schemes for which the amount of collected tax could be $0 and there would be a market reaction. If the government put a $100 tax on pencils, everyone would buy fewer pencils and the government would get a lot less than they calculate. Keep in mind there are a lot of things investors could be doing with their money besides parking them in stocks. So if corporations lose 10% of their income off the top from a change in the tax code, investments like real estate or t-bills or securities are going to pick up the slack in comparison.
  - dv_dt 3y ago
    > There are a lot of theoretical tax schemes for which the amount of collected tax could be $0 and there would be a market reaction. Well markets can be irrational, that doesn't mean we need to cater to the irrationality.

dv_dt 3y ago

You say this >A corporate income tax would not generate meaningful revenue for most countries. Then you say this > And such that it does, it only generates revenue by cannibalizing other taxes (income, sales, capital gains, etc) at the cost of a deadweight loss of investments. If it's not meaningful revenue, how is it a meaningful loss of investments? This also seems to ignore if it's a minimum among a wide swath of nations, what investment loss would it incur?

legitster 3y ago
https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss There are a lot of theoretical tax schemes for which the amount of collected tax could be $0 and there would be a market reaction. If the government put a $100 tax on pencils, everyone would buy fewer pencils and the government would get a lot less than they calculate. Keep in mind there are a lot of things investors could be doing with their money besides parking them in stocks. So if corporations lose 10% of their income off the top from a change in the tax code, investments like real estate or t-bills or securities are going to pick up the slack in comparison.
- dv_dt 3y ago
  > There are a lot of theoretical tax schemes for which the amount of collected tax could be $0 and there would be a market reaction. Well markets can be irrational, that doesn't mean we need to cater to the irrationality.