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The Almighty Buck United Kingdom Businesses Google Government

UK Announces 'Google Tax' 602

mrspoonsi points out that the UK has announced a "Google tax" on corporations that send a significant portion of their profits overseas to avoid local taxation. Any "economic activity" that is pushed to another country would face a 25% tax. George Osborne, the Chancellor of the Exchequer [said], "We will make sure multinationals pay their fair share of tax. We will introduce a 25% tax on profits from multinationals here in the UK which they artificially shift out of the UK. Today we're putting a stop to it. It's unfair to British people." ... [C]orporate taxes are still low, because the system does not tax sales, it taxes profits. And those profits are fiendishly difficult to pin down. Intellectual property payments to holding companies, the movement of sales activity to lower tax jurisdictions and the cost of licensing fees to holding companies all confuse the picture and allow firms with very mobile business models (such as in the technology sector) to be highly tax efficient.
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UK Announces 'Google Tax'

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  • Great (Score:5, Insightful)

    by Roodvlees ( 2742853 ) on Wednesday December 03, 2014 @09:43AM (#48514161)
    Sadly it has to be done this way. Because countries refuse to stop giving the ridiculous tax benefits.
    • Re:Great (Score:5, Insightful)

      by Lawrence_Bird ( 67278 ) on Wednesday December 03, 2014 @10:00AM (#48514283) Homepage

      Because countries refuse to stop giving the ridiculous tax benefits.

      Well there you have it. Exactly what is wrong with the left. A lower tax rate is considered a "benefit" as if the government is tossing a cookie out and patting the corporate (or individual) dog on the head and saying "good boy!"

      The government has no inherent natural right to take money from anyone.

      The far better way to view it is "companies are shifting assets and income out of our country because of the ridiculous tax penalties here."

      • Re:Great (Score:5, Insightful)

        by dave420 ( 699308 ) on Wednesday December 03, 2014 @10:02AM (#48514303)
        The companies profit because of the stable economies and societies countries create through spending the tax the countries have collected. Why shouldn't governments try to recoup some of this? Google can choose to not do business in the affected countries if they want.
        • Re:Great (Score:4, Insightful)

          by deKernel ( 65640 ) on Wednesday December 03, 2014 @10:18AM (#48514441)

          You make it sound like they don't recoup any money which they do. The question is how much is fair.

          • by Chirs ( 87576 ) on Wednesday December 03, 2014 @10:54AM (#48514765)

            How much is "fair" depends on the culture the company and government are operating in.

            You could have a libertarian society with minimal government involvement and minimal taxation, but where every individual has to pay for everything they do. (Roads, fire protection, ambulance, medical, police, education, utilities, garbage collection, etc.)

            On the other hand, you could have a more socialist society with high taxation and high government involvement, but where most of the services are paid for by the government.

            Both are viable solutions, with different tradeoffs.

            • by tnk1 ( 899206 ) on Wednesday December 03, 2014 @12:09PM (#48515457)

              Services paid for by the government *are* services paid for by individuals. I pay a significant portion of my paycheck in taxes. Please don't tell me that I'm not individually paying for government programs.

              What you mean is that the government ensures that everyone has individual services irrespective of their ability to pay for them. They make that happen by charging individuals with those means to pay for people who do not have those means. If I am poor and want fire services, under a libertarian system, I pay let's say $100, but under the government, I pay $10, $1 or even zero. If I am not poor, under a libertarian system I will still pay $100 for fire services, but under the government, I pay $150 (or more).

              Unless the government is an entity that generates its own operating expenses from the sale of a service or product, it is not anything other than individuals being forced to pay for services. It's just not all individuals at the same rate.

              Don't get me wrong, I am not necessarily arguing for the existence of the a la carte ultra-Libertarian state. The government exists for a reason and I happily pay taxes for those services that government is well designed to manage. What I don't like is when the government becomes an engine for wealth redistribution, forced charity, or social engineering experiments.

          • That is up to the electorate to decide.

          • Re:Great (Score:5, Insightful)

            by Opportunist ( 166417 ) on Wednesday December 03, 2014 @11:24AM (#48515015)

            Well, let's look at a country without any kind of sensible government system in place. Let's take, say, Somalia. Now imagine you're doing business there. Ponder for a moment how much you'd pay to be protected from looting, to have your workforce protected from being mugged, to create and maintain an infrastructure so you have gas, water, power and transportation, ...

            Then you know what's fair.

            • Re:Great (Score:4, Interesting)

              by Obfuscant ( 592200 ) on Wednesday December 03, 2014 @02:59PM (#48516921)

              Ponder for a moment how much you'd pay to be protected from looting, to have your workforce protected from being mugged, to create and maintain an infrastructure so you have gas, water, power and transportation, ...

              Except that those employees ALSO pay taxes to create and maintain the same infrastructure so they get gas, water, power, and transportation. In fact, because those employees are employed and earning income they pay MORE than people who are unemployed.

              So the government is double dipping here. Tax the company who creates the jobs that allow the people to pay more in taxes, and tax the people who exchange their time and labor for money.

              The real issue is not whether there should be corporate taxes, but whether a corporate tax rate of 25% is reasonable when a company earns that money someplace else. Great Britain has no business taxing multinationals for money earned abroad, and even less business threatening them with an exorbitant penalty when they don't free pay up on those external profits.

            • Lets be fair, using another dissimilar country for comparison is not a fair comparison

              Lets be frank and you have no real intrest in fair comparisons.

              Somolia's situation is complicated, and as the country has no real "government" as we know it, does not mean its "ungovernen", the capital is a warzone, but the rest of the country is a somewhat peaceful being ruled under tribal leaders. This is not Anarchism, or even capitalism, but simply old school tribalism, something much better suited to the locals th

              • Re:Great (Score:4, Interesting)

                by Opportunist ( 166417 ) on Wednesday December 03, 2014 @04:36PM (#48517767)

                Ok, let's use a fictitious country since Somalia might have a negative connotation. In this country you don't get anything from the government, you need to pay for everything yourself. In return, no taxes are being paid. EVERYTHING is privately owned and run for-profit because, well, you have to run it for-profit because there is no other way to do it sensibly when there ain't nobody going to back you.

                What remains is that you need to hire security (and I mean 24/7 security, since nobody would give a shit about anyone breaking into your place), and pay them rather well because they need to have an incentive to have that job still tomorrow instead of simply using their position to sell off your belongings themselves. You should also take care that you have some firefighters and other technical emergency services on your payroll, at least if there are any assets that you don't want damaged in case of an emergency.

                Depending on what kind of company you have, you will also have to find someone to pipe some water your way, along with someone to transport off your sewage. And unless you want to keep it or treat it yourself, find a treatment plant to enter a contract with you. Put aside a bit of money every year to pay for the necessary inspection and maintenance of the pipes. Or, of course, pay someone to do it for you. Since you will probably not find anyone else willing to share a pipe with you unless you pay him handsomely to use his pipe (after all you'd have to rent it from him, and like I said before, everything in our fictitious state is for-profit, and so is access to this pipe), you will want your own pipe, so expect to pay a bit more than you'd do in one of these "socialist" countries where the sewage is bundled. How else do you think the treatment plant could find out how much to charge you if they can't measure your amount of poop?

                Same goes of course with your waste. Find someone to dump it for you or drown in it.

                You will probably also have to do with a relatively lower qualified work force. Since only people who come from a well off background can afford education, the pool of educated people is smaller. Unless you just need menial workers, this may mean that you have to pay more due to supply and demand. Of course, if you only need monkeys you'll get by paying peanuts since that pool would certainly grow correspondingly. In general, the less training you need to give your work force the better, since fluctuation can be serious. Especially if work related injuries can be an issue and if your workers cannot afford medical care they might stay deformed. Whether this is a crippling problem for you too or just for them depends of course on the kind of work you offer. Though as experience has taught us, workers in jobs where injury is likely are also easy to replace because such jobs usually need no lengthy training, so I think you should be ok without having to implement any worker safety precautions. It's not like there's a government that would pester you with such, if you come up with something like that it would only be in your interest, and as long as workers are easy to replace (remember monkeys and peanuts from above), there is no pressing urge for this.

                And so on. It would be interesting to find out whether it would be cheaper or more expensive to produce in such a country. One thing is certain, though, I would not want to LIVE in such a country.

        • Lets see. Oh companies create jobs that pay workers who then consume goods and pay taxes on those goods as well as their salaries. Companies also pay investors dividends (taxed) and, hopefully, result in capital gains, also currently taxed.

          • Re:Great (Score:5, Insightful)

            by thaylin ( 555395 ) on Wednesday December 03, 2014 @10:35AM (#48514601)

            Companies do not create jobs, demand for goods creates jobs, companies fulfill that role of producing. If that company was not there the job would still be there. That is a myth created by the right.

            • Companies do not create jobs, demand for goods creates jobs,

              Demand creates opportunities for companies to profit, who then create the jobs while making the product in demand. It is trivial to have demand without jobs. Ten million people could line up for a product tomorrow, and if the company that makes that product decides that the increased prices and profits from high demand were better than increased sales of lower priced products then there will be no new jobs. E.g., the demand for Apple Dev tickets is outrageous, yet this doesn't create more jobs. Or more Job

          • True, but does the combined level of taxes on capital add up to the same level of taxation as someone earning the same amount through labor? In my opinion it should add up to the same amount. If I as a citizen make 100k a year through dividends and capital gains, I profit about as much from the government as another guy making 100k a year through working a job. We should pay roughly the same level of taxes, as we gain roughly the same amount of benefits from living in an orderly, governed society and we mak
          • by Chirs ( 87576 ) on Wednesday December 03, 2014 @10:50AM (#48514729)

            The basic idea is that a corporation is nothing but a bunch of people owning it, so instead of taxing the corporation you shift the tax to the individual owners (owners, shareholders, etc.) instead. Since corporations wouldn't be paying taxes, you could then get rid of all of the tax breaks/writeoffs for corporations, which would significantly simplify corporate accounting and reduce the incentive for large corporations to shift money around to avoid tax.

            • by thaylin ( 555395 )

              However then you also need to get rid of special tax breaks that only those owners can take advantage of.

          • Re:Great (Score:4, Insightful)

            by Opportunist ( 166417 ) on Wednesday December 03, 2014 @11:26AM (#48515027)

            Sorry, no. Jobs are to a company a necessary evil. No company in their sane mind creates a job for the sake of creating a job, only if said job generates more revenue than what the worker costs that job will be created.

            I create jobs. I buy goods and services.

        • His objection was not to taxation, but to the terming of taxation as if it is the default state and any deviation (ie lower taxes) somehow requires a justification.

          It may seem like a trifling complaint, but consider the difference between calling freedom of speech a right and calling it a benefit.

      • Re:Great (Score:5, Insightful)

        by visualight ( 468005 ) on Wednesday December 03, 2014 @10:11AM (#48514385) Homepage

        And you have no inherent natural right to electricity, plumbing, roads, safety from murder/rape/robbery, etc. Society gives that to you in EXCHANGE for your taxes.

        Next, try to separate Society from Government to continue your argument. Then I'll just call you you a Liar, because you do actually understand the manipulation you (will) be making.

        Or, you have another, more fair, method that results in every member of Society contributing to the whole, let's hear it. But if you think you should be allowed to live here and profit from our infrastructure and then not pay for it you can get the fuck out you communist free loader.

        • by Krojack ( 575051 )

          Last I checked all my utilities other than water are private companies. My taxes won't pay my electric, gas or phone bill. If I don't pay any of them then they get shut off.

          Also I pay my water bill to my local city and it's not even part of my taxes.

      • Re:Great (Score:5, Interesting)

        by CrimsonAvenger ( 580665 ) on Wednesday December 03, 2014 @10:20AM (#48514463)

        The government has no inherent natural right to take money from anyone.

        Nonsense! Governments have the normal natural right to take money from anyone - the Army and Police.

        Or do you really believe that there's any difference between modern governments and medieval ones, other than the method of picking the rulers?

      • Re:Great (Score:4, Insightful)

        by Roodvlees ( 2742853 ) on Wednesday December 03, 2014 @10:25AM (#48514527)

        Exactly what is wrong with the left.

        The only where it matters who says it is when you are wrong and unable to argue the point.

        A lower tax rate is considered a "benefit" as if the government is tossing a cookie out and patting the corporate (or individual) dog on the head and saying "good boy!"

        When that tax rate is lower than the one people have to pay over their income and it's only paid over the profit the company makes (unlike personal taxes which are paid before basic life maintenance) - yes it's a benefit because it means people have to make up the difference on their personal taxes.

        The government has no inherent natural right to take money from anyone.

        Of course not, but lets be realistic how else will it pay for services?
        If you really don't want to pay tax you can always move to Yemen.
        But you want a police force to reduce crime, fire department to put out fires, etc...
        Taxes are necessary to make those things happen.
        I want everyone to pay their taxes so nobody has to pay an unfair amount.

        Also I think most companies will be happy to pay their taxes, so long as their competition also has to, because they benefit from government services just the same.

        companies are shifting assets and income

        That's so broken! These companies enjoy roads, an educated population, etc, they should not be allow to 'move' income from the place they earned it.

      • Of course they don't - governments are an entirely human construct, so they have no inalienable rights at all.

        However, the vast majority of society sees creating a pot of money from which we pay for shared resources as a valuable and useful thing. We then expect everyone to pay their fair share into said pot given that they are sharing said resources.

      • Re:Great (Score:5, Informative)

        by gstoddart ( 321705 ) on Wednesday December 03, 2014 @10:30AM (#48514569) Homepage

        You know, corporations have no inherent natural right to anything. Corporations are a construct created and regulated by governments.

        Corporations have no such thing as natural rights, because corporations are not a natural thing. They are a legal construct, and nothing more. They aren't some protected species.

        So, yes, when you incorporate to get certain benefits from the government, you do it under their terms. And that has a pretty good chance of including paying taxes.

        So, your status as a corporation isn't some magical, inherent thing in the universe. It's not an objective fact. It's not defined by physics.

        Governments keep giving tax breaks to corporations and the wealthy under the lie that this will create jobs and stimulate the economy. And the they destroy jobs, and sit on record high piles of money and not do anything for the economy.

        From what everyone who isn't a corporation can tell, giving tax breaks to corporations has NONE of the claimed benefits. All this has done is put more money in the hands of the few, and leave the rest of us begging for scraps.

        But don't think for a minute that a corporation is in any way entitled or has some inherent natural right to make money which isn't taxed.

        Because that's complete bullshit.

        Corporations do not exist without the permission of governments. Which means it's corporations which don't have any natural rights in this equation. And they certainly don't have some inherent right to not be taxed.

        • by Kohath ( 38547 )

          People have natural rights. People don't give up their natural rights when they form an organization like a corporation. Whatever harm you mean to cause corporations, that harm will be felt by the people involved.

          • Re: (Score:3, Insightful)

            by Kierthos ( 225954 )

            People don't give up their natural rights when they form a corporation, but that does not mean that the corporation has all those same rights.

  • by Greyfox ( 87712 ) on Wednesday December 03, 2014 @09:44AM (#48514169) Homepage Journal
    You could just tax every transaction made with that currency at a fairly low percentage of the total transaction and do away with all the other taxes. Credit card companies figured this out decades ago.
    • The problem with taxing at a fixed percentage of volume is that it penalizes high-volume low-margin businesses relative to the high-margin ones. That introduces serious inefficiency by artificially lowering the relative cost of expensive good relative to cheaper ones (which is also regressive*).

      In practice, States try to soften the regressive nature of fixed-percentage taxes by devising a classification scheme wherein essential goods like food are taxed at a different rate (sometimes zero). That leads to a

      • The GP doesn't understand what the "Google Tax" is about.
        This previous /. thread has an article about Amazon that lays it out [slashdot.org]

        It worked like this: Amazon Europe paid 105 million EU to Amazon Technologies Inc in Nevada to license the rights to Amazon's intellectual property -- the patents and software for the websites, including that button that buys a book with one click.

        Amazon Europe onsold the rights to use this intellectual property to Amazon EU for 519 million EU -- five times what it had paid the US company. Amazon Europe made an instant profit of 414 million EU, which would have been taxable, except that Amazon Europe is a limited partnership. It doesn't pay tax in Luxembourg.

        This is what the UK is trying to stop.
        A small transaction tax would do nothing to prevent naked abuses of transfer pricing.

  • by trout007 ( 975317 ) on Wednesday December 03, 2014 @09:48AM (#48514195)

    Individuals aren't taxes based on their profit but income. Corporations should minimally be held to the same standard. After all there is a huge benefit to incorporating which is limiting liability of the owners. Tax the income at a much lower rate of 5% or so. Think of all of the productivity lost moving money around to optimize tax payments. If your profit margin isn't high enough to cover this tax then you shouldn't incorporate.

    • Individuals aren't taxes based on their profit but income.

      Untrue, at least for US income tax. You are allowed to deduct your business expenses--you are taxed on on your income net of those expenses.

      • Not if you are an employee. I can't deduct my car that I need to get to work, house to live, utilities, food, medicine, etc. Only if you are self employed.

        • Not if you are an employee. I can't deduct my car that I need to get to work, house to live, utilities, food, medicine, etc. Only if you are self employed.

          Yes if you are an employee. You can't deduct things that are not directly related to work and not required by it. You don't *need* your car to get to work, that's a consequence of where you decided to live. If you drive your car in the performance of your job, that's dedcutible. Your commute, your house, your living expenses...those aren't deductible

      • by thaylin ( 555395 )

        He is talking about employees as individuals, not sole proprietorship that for some reason dont seperate their taxes from their person.

        I am not allowed to deduct my full housing cost, utility payments, food, clothing and such from my taxes, event though they are necessary for me to live and work.

        • Not even close to the right perspective.

          My labor is valued at $50.00 per hour. If I exchange one hour of labor for $50.00 then my profit is 0, and I should be taxed a percentage of 0.

          • by thaylin ( 555395 )

            What you value something at does not equal what said thing costs to produce.

          • by CrimsonAvenger ( 580665 ) on Wednesday December 03, 2014 @10:25AM (#48514535)

            Umm, no.

            Your "profit" is the difference between the price you sell your labor for and the cost to produce your labor. Since it doesn't cost you $50, then your "profit" isn't zero.

            Theoretically, the "standard deduction" (if you don't itemize) is supposed to approximate the cost of your labor. It hasn't for a very long time, but theoretically it did.

            Do note that when the Income Tax was proposed and passed, the intention was to tax people who made tens of thousands of dollars per year (at the time, that kind of income was in one-percenter territory), and that virtually no normal worker would pay any of it.

            Inflation, of course, put paid to that idea three generations back.

          • by tomhath ( 637240 )

            If I exchange one hour of labor for $50.00

            Nope. You produced an hour of labor and sold it for $50. That's a $50 profit (ignoring expenses related to producing that hour of labor such as the cost of an office).

      • by putaro ( 235078 )

        The difference is that for a corporation almost everything is a business expense whereas for an individual you can't deduct things like food, clothing and other things not directly related to the business.

        • by bws111 ( 1216812 )

          That is already built into the tax tables. You pay no tax at all on the first $x of income, of low rate on the next $x, etc. That untaxed (and lower taxed) money covers your basic expenses. If you have additional expenses (such as required for a job) you can also deduct those. If your additional expenses are because of your lifestyle choices, too bad, you are in effect just spending your 'profits'.

          • That's.... huh. I wanted to call bullshit on that because the system is ludicrously rigged for business taxes... but that makes a good deal of sense.

            So while that might be true, putaro's point still stands. Practically everything is a business expense for a corporation: Planes, ludicrous CEO's wages, the rent on the building they pay to the owner to bypass taxes. There is no upper limit to the extravagance that a corporation can claim as a business expense. Their "lifestyle choices" are not scrutinized.

      • by Trepidity ( 597 )

        Generally that's not the case if you earn income as an employee. If you're self-employed you can deduct business expenses from your self-employment income, but if you have a job, you generally pay tax on the gross income from the job, not the income net of expenses. See e.g. these instructions [irs.gov]:

        Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses.

        Most other things aren't deductible either: cost of your work

    • Individuals aren't taxes based on their profit but income

      Yes they are. You can (as an individual in the UK) offset most business expenses against tax. It's a tax on net income, not gross.

      • by thaylin ( 555395 )

        What about food you need to consume, housing (full bill paid), utilities just to live. Offsetting business expenses is not in an individual expense, it is an extension of the business.

      • Individuals aren't taxes based on their profit but income

        Yes they are. You can (as an individual in the UK) offset most business expenses against tax. It's a tax on net income, not gross.

        No you can't. In the UK like any other country you pay tax on income you spend. Often you in fact have the reverse structure from what corporation have, where you pay a lower tax on money you invest or pay onto others.

      • Yes they are. You can (as an individual in the UK) offset most business expenses against tax. It's a tax on net income, not gross.

        And that is still based on "income" not "profit" as the GP said, isn't it? Unlike a company/corporation, for an individual (not a business person), you can't bring all personal expenses to deduct your gross income. How many (percentages of) "business" individual people compared to those who are simple employees???

    • If I was only taxes on profit I'd owe like $100 in taxes.
    • Individuals aren't taxes based on their profit but income

      Not strictly true. Individuals pay some taxes (here, at least - other countries: different rules) on their taxable income. That allows for certain deductions such as some expenses paid by people for items necessary for their work. It also allows them quite generous allowances and reductions.

      It would be simple to think of all the income that a person received from their job as "profit". But governments don't apply rules like that, to protect low-paid workers and be progressive (tax those who can afford to

      • by thaylin ( 555395 )

        There is no reasonable parallel there. Businesses get to deduct the things they need to operate, including their properties, their payroll, all their expenses. Individuals dont. The personal dedication is not "generous" when you consider the different things. Shoot the dedication would not would not allow you to pay for a single bedroom apartment in any city in the US.

    • Because if they taxed individuals on their profits, that would be 0 tax for 99.9% of all individuals. People do not accumulate wealth, so you need to tax their wealth production instead. Also Individuals do not spend money to make money, so their profit margins are all the same, 100%.

      If you wanted to tax wealth production, similarly, for corporation you would need to do it on an individual basis, as every single business has a different profit margin. It is not bad for anyone for a business to be making
      • by thaylin ( 555395 )

        Wait, if people dont accumulate wealth what is that money sitting in my bank? how about Gate's Billions of dollars of wealth?

        • Wealth production comes from owning assets with postive cash flow (i.e., dividend paying stocks and/or rental real estate) or appreciate in value (i.e., stocks and/or real estate). Cash sitting in a bank account that earns less interest than the rate of inflation doesn't generate more wealth by itself.
    • by putaro ( 235078 )

      I think there may be some merit to this.

      First, it makes the tax structure for companies a lot simpler. The amount of paperwork for tracking all of your expenses is silly (I _hate_ saving and tracking receipts) and you don't know how much your tax will be until you know how much your profit is. If it's a percentage of revenues you can just figure it in to your costs and be done.

      Second, the tax on income penalized businesses saving. So, if you need to make a big investment that you can't finance out of rev

    • Re: (Score:3, Interesting)

      Individuals aren't taxes based on their profit but income. Corporations should minimally be held to the same standard. After all there is a huge benefit to incorporating which is limiting liability of the owners. Tax the income at a much lower rate of 5% or so. Think of all of the productivity lost moving money around to optimize tax payments. If your profit margin isn't high enough to cover this tax then you shouldn't incorporate.

      No no no and no.
      Taxes make people not do the thing you are taxing. Tax income, and they have reason to make less. Why go get the new job that pays a tad more when 25% of your raise goes to the feds?
      Tax the thing you want people to do less of. Sales tax. The last few financial bubbles have been because people spent beyond their means and didn't save. But the fact of the matter is due to capital gains, putting your money into a mutual fund means it'll get taxed! You pay less in taxes spending it at the movies

      • The last few financial bubbles have been because people spent beyond their means and didn't save.

        On the other hand, you occasionally have "respected" economists saying that the economy right now is as shaky as it is because people aren't spending enough of what they make.

        Apparently, their take is that a strong economy is built on everyone spending every dime that comes to hand....

      • by jabuzz ( 182671 ) on Wednesday December 03, 2014 @11:12AM (#48514927) Homepage

        Show me anyone outside the 1% and even 99% of the 1%'ers that would choose to make less money because they where being taxed too heavily on it. That is a complete fallacy.

      • by rabtech ( 223758 ) on Wednesday December 03, 2014 @11:19AM (#48514973) Homepage

        Tax income, and they have reason to make less. Why go get the new job that pays a tad more when 25% of your raise goes to the feds?

        This has to be one of the dumbest arguments of all time and I can't imagine anyone who actually has money ever actually operates this way or they're headed for ruin rather quickly.

        Of course you take the job; 75% of the extra income goes into your pocket. A business that decides not to sell more widgets at a 75% profit margin because they'd have to spend 25% to sell the widgets (taxes, overhead, etc) is a business headed for bankruptcy.

        The only programs in the USA that lead to less overall income when you get a raise are ones for poor people like Medicaid where making one extra dollar can cut off your benefits.

    • by Kohath ( 38547 )

      Limiting liability isn't a "benefit". It's a basic necessity to doing business. Without limited liability to business owners, every business owner would always have to bet his family's life savings on every business transaction. One failure would mean permanent destitution. No one with any money would ever take a risk like that. You couldn't build something like a factory -- why bother when it can disappear at any time because someone made a mistake?

      A similar problem keeps countries like Haiti and some

    • Re: (Score:2, Informative)

      by Anonymous Coward

      If by income you mean wages then your talking about taxing profits of the individual essentially. In a business you might have high costs, low margins, and quick turnaround to compensate. That is one business model. If you start basing taxes on income those businesses would go bankrupt or you would see prices increase drastically. On other sorts of items where there is a high margin low cost the seller would greatly benefit. We would have nobody wanting to sell anything for which has a high cost as they wou

  • Algorithm (Score:5, Interesting)

    by countach ( 534280 ) on Wednesday December 03, 2014 @09:55AM (#48514255)

    I'm not sure what Britain has in mind, but I've long argued for a system like this. Say Apple does business in my country. Say they do 6% of their global business and revenue in my country. OK, then whatever profits Apple makes world wide throughout their empire throughout all associated companies, you've got to pay tax in my country on 6% of it.

    If you want to argue that for whatever reason the product mix of sales in my country is lower margin than your global business because the product mix is different, ok fine, but the onus would be on you to demonstrate that, and the level of proof required would be high.

    • by gnupun ( 752725 )

      OK, then whatever profits Apple makes world wide throughout their empire throughout all associated companies, you've got to pay tax in my country on 6% of it.

      That's just wrong. Say Apple's total annual sales is $100B, and $6B of that is from your country. But profit margin varies from product to product. Say another country also has $6B sales, but the average profit margin of Apple products is 30% in that country and 15% in yours. Say, also that the profit margin difference is not due to different pricing i

    • Re:Algorithm (Score:5, Informative)

      by admiral snackbar ( 2559943 ) on Wednesday December 03, 2014 @10:14AM (#48514405)
      For me the real problem isn't that some corporations don't pay taxes in some countries, its that some corporations hardly pay taxes anywhere. That is the real problem. I don't mind Starbucks not paying taxes in the UK, as long as they pay a fair share of taxes somewhere. What I would do is this: I would demand from all corporations operating in the country an overview of the corporate income taxes they pay anywhere in the world. If this is the same or more than the national corporate income tax rate, I would not add any tax. If it is lower, I would take cut of the lower amount equal to the percentage of total business they do in the country. Example: Apple makes 10 billion profit a year and pays 500 million in corporate income tax (anywhere in the world), while the corporate income tax is 25%. So they should have paid 2.5 billion in taxes, a shortfall of 2 billion. If they have 50% of their revenue in the US, the US should take 50% of the shortfall, i.e. 1 billion. This way, you avoid double taxation and you still force corporations to pay a reasonable tax to some country at least. In your example, theoretically Apple could have shifted all their profits to the UK and paid a regular 30% (or whatever the corporate tax rate is there) corporate income tax, and then also be forced to pay in the US over their revenue share (if the US implemented your system)
    • by AmiMoJo ( 196126 ) *

      The EU is trying to introduce something similar at that level, so actually Osborne is just getting in early and trying to claim the credit for something that would have to happen soon anyway.

    • by Kohath ( 38547 )

      If you're in favor of this in the US, you're in favor of a huge tax cut for multinational companies.

  • Easy: just kill IP (Score:2, Interesting)

    by Anonymous Coward

    Of course killinng "Intellectual Property" wouldn't be realistical not thoroughly fair. But strongly curtailing it would go a long way towards a better wold:

    * strongly limit the duration of afforded protection
    * don't let IP "owners" to set an arbitrary phantasy price
    * acutally force an "owner" to use the IP or relinquish control within some reasonable time limit

    IP isn't some property and speculation on IP is already doing a huge damage (speculation on food is doing a huge damage too,

  • by Chirs ( 87576 ) on Wednesday December 03, 2014 @10:37AM (#48514613)

    I know it sounds crazy at first blush, but I think it would make sense to totally get rid of corporate taxes. (Replaced by other forms of taxation.)

    The basic idea is that a corporation is nothing but a bunch of people owning it, so instead of taxing the corporation you tax the individual owners (owners, shareholders, etc.) instead. Since corporations wouldn't be paying taxes, you could then get rid of all of the tax breaks/writeoffs for corporations, which would significantly simplify corporate accounting and reduce the incentive for large corporations to shift money around to avoid tax.

    Some references:
    http://www.dailykos.com/story/... [dailykos.com]
    http://www.theatlantic.com/bus... [theatlantic.com]
    http://www.vox.com/2014/8/8/59... [vox.com]

  • by MillerHighLife21 ( 876240 ) on Wednesday December 03, 2014 @10:56AM (#48514781) Homepage

    Is offset that tax shift by an amount of money equal to how much is spent employing people in that country. Same idea, but provide an incentive to hire more people locally.

    I've been wish the US would do something similar to use taxes to incentive employment. Right now there's so many additional rules, fees, and legislative attachments to hiring people that the government is virtually incentivizing companies to favor automation.

  • by NotQuiteReal ( 608241 ) on Wednesday December 03, 2014 @11:09AM (#48514897) Journal
    (Cost of Government) / (Number of Citizens) = the fair tax per citizen.

    Anything else is unfair, but necessary simply because not everyone can afford their fair share.

    The tax code boils down to extracting unfair amounts of money from whomever can pay, muddied by the politics of helping friends and punishing enemies.

    Sadly, politicians have a disincentive to keep a "reasonable" Cost of Government.
  • by argStyopa ( 232550 ) on Wednesday December 03, 2014 @11:24AM (#48515019) Journal

    I appreciate the use of the term "fiendish" as artfully coined in this discussion.

    It paints the companies trying to avoid taxes as nearly-diabolical agents skulking around in the dark, not to mention adding a delightful soupcon of sinfulness.

    Of course, what this seems to conveniently ignore is that national taxation policies are likewise "fiendishly" complicated, sometimes driven by complicated corporate structures, but just as often driven by a quasi-socialist, populist, and (as long as we're painting in Medieval imagery) a quasi-Dulcinian desire to appropriate at least a piece of anything valuable "for the public" meaning actually "for politicians to spend and gain votes without the usual pain of public taxation or debt".

    Companies respond to these policies. If the policies are so contrived and convoluted that there remain loopholes that are worth pursuing to evade tax, that's the LAW WRITERS' fault, not the companies' for exploiting it. But it plays so much better in the press to blame companies for being greedy, rather than politicians for being incompetent.

"The vast majority of successful major crimes against property are perpetrated by individuals abusing positions of trust." -- Lawrence Dalzell

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