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This is what happens when you raise taxes to absurd levels. People leave -- especially the rich. If you have a company that provides products or services glob
by tsaoutourpants 13y ago
This is what happens when you raise taxes to absurd levels. People leave -- especially the rich. If you have a company that provides products or services globally (instead of a business that requires a physical presence such as WalMart or a gas station), what incentive do you have to be based in America?
- pavel_lishin 13y agoAre tax levels absurd?
- socalnate1 13y agoUS Corporate tax rates are. So big companies with options do all sorts of insane dancing to avoid/reduce them, which leads to lower actual collections rates.
- midas007 13y ago40% US official vs 24% effective worldwide.
- ChuckMcM 13y agoThat is the wrong question, the correct question is "Given the state of the world, how can I minimize tax payments?" You see that question only works if the costs salaries of the accountants, the cost of a 'presence' in some foreign country, and other rules is more than offset by the savings in tax rate. It is easy to budget since its an annual thing, plan A we pay $X, plan B we pay $Y, select plan in (A, B) where the tax is lowest. What it means, in the absence of some pretty crazy laws, is that there is a ceiling on taxes.
- midas007 13y agoThe Decline of Corporate Income Tax Revenues (2003) http://www.cbpp.org/cms/index.cfm?fa=view&id=1311 http://www.cbpp.org/cms/index.cfm?fa=view&id=1311
- Detrus 13y agoThis is what happens when countries compete to provide the lowest tax rates in a globalized economy.
- raverbashing 13y agoHow would one define "absurd taxes"? But apart from that I agree, companies will shop for the best tax regimen possible.
- _delirium 13y agoOur taxes are twice the USA's [1], and people aren't fleeing. Maybe America is doing something else wrong? [1] Overall tax rates, taking total tax revenue as percentage of GDP. Some specific tax rates are lower or higher, though overall they trend higher.
- joelrunyon 13y agoWhat country are you in? Do you have a reference other than the KPMG link mentioned earlier in the thread? [1] Also, it's worth mentioning this is referring to where corporations are set up - not people. [1] https://news.ycombinator.com/item?id=7133781 https://news.ycombinator.com/item?id=7133781
- _delirium 13y agoDenmark (it's in my profile). Our overall taxes are pretty high, though our corporate taxes aren't particularly high. Partly depends on what you count as corporate taxes, since there is a large VAT, large energy taxes, large taxes on corporate vehicle registration, etc. But a good portion is via personal income tax.
- maxerickson 13y agoPeople are not fleeing the U.S. either. There is some small amount of emigration, but I doubt there is a net emigration of wealth.
- bronbron 13y ago> This is what happens when you raise taxes to absurd levels Wouldn't any amount above 0% be reason for a company to seek tax havens? With revenues in the billions, it seems like even a 1% tax rate would be more expensive than the cost of relocating that money.