EU Unveils Plan To Force Facebook, Google and Amazon To Pay Their Fair Share of Tax (independent.co.uk) 263
An anonymous reader quotes a report from The Independent: The European Commission is bringing forward plans to make major multinationals such as Google, Amazon and Facebook disclose exactly where and how much tax they pay across the continent. The plan was expected to include rules requiring businesses earning more than 600 million euros a year (nearly $700 USD) to open up their tax affairs to public scrutiny, revealing their profits and accounts in every country in which they operate within the EU. Since the Panama Papers, a new clause has reportedly been added to require the companies to say how much money they make in so-called "tax havens." A final, more general statement would reveal profits in the rest of the world, treated as a single item. The plans will be presented by Britain's EU Commissioner, Lord Hill, who told the BBC: "This is a carefully thought through but ambitious proposal for more transparency on tax. While our proposal on [country-by-country reporting] is not of course focused principally on the response to the Panama Papers, there is an important connection between our continuing work on tax transparency and tax havens that we are building into the proposal."
Setting the bar a bit low (Score:5, Funny)
The plan was expected to include rules requiring businesses earning more than 600 million euros a year (nearly $700 USD) to open up their tax affairs to public scrutiny, revealing their profits and accounts in every country in which they operate within the EU
Wow, that's quite an exchange rate.
Re: (Score:2)
Re: (Score:3)
Wow, that's quite an exchange rate.
I think they mistook Canadian Dollars for Euros.
Re: (Score:2)
They're using the same calculation engine as Amazon.
Re: (Score:2)
Yes, 600.000.000 EUR is not 700 USD, I got it, heh.
But TFA talks about $700 USD.
So, how many euros are 700 dollars dollars?
Re:Setting the bar a bit low (Score:5, Funny)
600M EUR = 700 USD
Mario Draghi and his f*in quantitative easing.
Re: (Score:2)
The plan was expected to include rules requiring businesses earning more than 600 million euros a year (nearly $700 USD) to open up their tax affairs to public scrutiny, revealing their profits and accounts in every country in which they operate within the EU
Wow, that's quite an exchange rate.
That is nothing. In 2009, 35 quadrillion Zimbabwean dollars would get you 1 USD.
Re:Setting the bar a bit low (Score:4, Insightful)
I'm starting to realize just how much I missed picking out mistakes in the summary and mocking them in the comments under the old Dice regime. This is definitely a return to form, reminding me of the good old days.
Re:Setting the bar a bit low (Score:5, Informative)
Well, actually enforcing international law against shell companies being anonymously owned would make huge strides - and coincidentally basically kill terrorist funding networks.
In case you were wondering, Panama is only the SECOND worst about letting people form shell companies without having to provide identifying documentation so the ownership is known... the worst offender is the USA.
There are very few American names in the Panama papers - because Americans don't need Panama to dodge taxes or hide income from atrocities... they can do that more easily in Delaware or Nevada.
Re:Setting the bar a bit low (Score:4, Interesting)
If you are trying to hide money in the delaware and you are a US citizen you are nuts. The IRS has access to the data of those bank accounts. They will data match and you will be found out.
Re: Setting the bar a bit low (Score:4, Insightful)
And thats why the bank account belongs to a shell company. If there is no information on who owns the company the IRS has no way of finding out whose money it really is. In delaware you can create a shell company online in 5 minutes for a nominal fee with zero documentation. I bet half the companies registered in DW are owned by Homer J. Simpson of Springfiels Il.
Re: (Score:3)
Bank accounts have to be tied to a person via their SSN even if the bank account is held by a company. The setting up of a company may require limited documentation, but bank accounts are a bitch.
Re: (Score:3, Informative)
I suppose it gets a few extra marks for not being about the mythical 'climate change' for once...
Yeah, lol. There'll be articles on the equally fictitious 'evolution' as well. Praise Jesus.
Re:Setting the bar a bit low (Score:5, Funny)
Re:Setting the bar a bit low (Score:4, Funny)
Re:Setting the bar a bit low (Score:5, Funny)
Won't solve anything (Score:3, Interesting)
There is this fallacious, persistent belief that if somehow the EU could get hold of more money, all their problems would be solved. This is not the case. When a government, at any level from local to supra-national, gets more money, what happens? They blow it immediately on stupid crap, or use it to fortify their own power. Then, the money is gone and it will never come back. However now that they are used to the higher income level, the quest for more money begins anew.
There is a wonderful short story, called The Rocking Horse Winner [dowse.com], about just this situation. I urge all of you to read it, it's only 5-10 minutes and is well worth the time. More money doesn't fix anything, it just generates demand for even more money.
Re:Won't solve anything (Score:5, Insightful)
Irrelevant. Do you really feel that multinationals (who are the main drivers of oligopolization in every market they participate in; and whose reach and power worldwide has increased enormously since the Thatcher/Reagan revolution) should be allowed to keep their competitive advantage over smaller companies, just because they can afford to hire the "best" lawyers and bookkeepers? Given that SMEs have to pay, and citizens (whose income comes from something other than cap gains, which is by and large not meaningfully taxed) I see no reason why big companies should be able to avoid it. The playing field is uneven enough as it is.
Re:Won't solve anything (Score:4, Insightful)
A) Force multinational corporations to comply with the same tax laws as small businesses.
or
B) Stop taxing corporations.
"But B is outlandish! Blasphemous even!" Let me ask you this: Do you believe in taxation without representation? Do you believe corporations deserve representation in government? For most people the answer is no, no. What's the logical conclusion regarding taxing corporations then?
The usual argument people bring up to counter this is that the people who own and/or work at the corporation already have representation - they're allowed to vote, so it's OK to tax their comopany. That argument doesn't fly because those people are already taxed (as individuals) the same as people who don't own or work for a corporation. What's your justification for taxing them more just because they own or work for a corporation?
"But the government would lose billions in tax revenue!" The economy doesn't work like that. All taxation is is diverting a certain percentage of the country's GDP to the government coffers. For the most part, where that money gets diverted from doesn't really matter.* If you eliminated all income taxes and shifted the entire tax burden to corporate taxes overnight, what would happen? Everyone would suddenly have (say) 25% more money, but would their purchasing power increase by 25%? Nope. Companies would be forced to raise their prices to pay for the new taxes, and the price of goods and services they sell would increase - exactly enough to wipe out the 25% extra money people gained. Per capita purchasing power increases can only originate from increased productivity. Taxation is just moving money from one purse to a different purse - it does not affect productivity
Neither do companies for that matter. Companies are just a shell - it's the people who work for that company who generate its productivity. People are the only source of productivity, so ultimately any tax burden is paid for by people regardless of what type of tax you use to collect it - income taxes, sales taxes, corporate taxes, import taxes, customs taxes, all of it is ultimately paid for by people. Think of the economy as a giant donut-shaped swimming pool (in reality it's a web but it's conceptually easier this way), and economic activity as the speed at which the water circles around. Individual people move that water around by paddling it (adding productivity to the economy). A company is just a group of people paddling together. Someone who is self-employed is paddling on his own. Taxes are just a diversion in this donut which directs about 35% of the water into government control, for the government to decide where the water should outflow. But it's always people who do the paddling regardless of whether they work as individuals, work for a corporation, or work for the government.
Eliminate corporate taxes and there's no incentive for these companies to shift income out of these countries. The money stays where it's needed,** and if the company is generating a lot of income in that country, it will keep money in that country to finance its operations. That money gets spent in that country, meaning more income and sales for that country to tax. **The exception would be profits distributed to owners/shareholders. But in a simplified tax structure like this, you could simply assess those people income tax based on (corporate dividend from that stock) * (percent of company income generated in country x) * (income tax rate in country x). Heck, you could even argue that a corporate tax is a simpler way to do just that. The drawback is that a multinational corporation exists in multiple countries simultaneously so a corporate tax creates an incentive to shift income out of countries with higher corporate taxes, whereas an individual can only exist in one country at a time. And
Re:Won't solve anything (Score:4, Insightful)
> More money doesn't fix anything, it just generates demand for
> even more money.
Why can't greedy capitalists ever learn this valuable lesson?
Re: (Score:3)
> More money doesn't fix anything, it just generates demand for > even more money.
Why can't greedy capitalists ever learn this valuable lesson?
Because it is a side effect of greed? Greed affects certain parts of the brain. It cripples the part that handles common sense, completely switches off the morality centre and there is nothing you can do about it any more than you can stop your joystick from dripping if you get infected by a drug resistant Chlamydia Trachoma strain.
Re:Won't solve anything (Score:5, Insightful)
Re: (Score:2, Interesting)
Name problems that have been solved by offshore billiionaires skipping on taxes.
Re:Won't solve anything (Score:5, Interesting)
One local libertarian author cited Estonia as the reason we should ONLY care about those the Panama papers implicated in huge atrocities and actively help people dodge taxes. Estonia he says, has built their post-cold-war economy on being a tax-haven which has attracted lots of "investment" as foreign companies headquartered there to pay the low tax, and given the government lots of money to inject into the local economy which then thrived (a very unlibertarian idea that last part but libertarians have never been known for their consistency they'll break every rule they claim to believe in when the beneficiaries are already rich and libertarianism should be more properly known as neo-aristocratism).
Here's the thing he did not, however, consider. At the last G8 meeting, the African Union made a representation in which they said that Africa would gladly forgo all foreign aid - if the G8 agreed to pass harmonious laws to prevent their companies from avoiding taxes when doing business in Africa. It was a smart thing to say too - the taxes lost from taxable business in Africa every year through avoidance is almost 40 times what the continent receives in aid. If every African country cut it's corporate tax rate in half (and most are already among the lowest in the world - here in South Africa the corporate tax rate is less than 3rd of the individual income tax rate) and gave up all foreign aid - but those taxes were actually paid, Africa would be debt free in a year - and every African country would at LEAST tripple it's GDP even if it was so corrupt that 90% of the money was misspent (the actual levels are nowhere near THAT bad) - the remaining 10% invested would all but eradicate poverty on the continent.
So that changes the picture: Estonia has not had a "sound and clever economic policy" - they've enriched themselves not by producing anything, not by selling any resources of value - but by stealing the taxes due to the governments charged with caring for the poorest people on the planet. Every dollar Estonia make in foreign tax, is an African child going to sleep hungry tonight.
There is no reason this should be encouraged, supported or legal.
Re: Won't solve anything (Score:3)
Oh yes. Some westerner telling an African what my own home is like because you think you know better than the people who live here.
Hint: the most corrupt companies in Africa are local subsidiaries of large multinationals. They exist solely to do their parent company's dirty work while maintaining plausible deniability. When somebody gets murdered for not wanting their ancestral land turned into a mine you can be certain of finding a large multinational mining conglomerate with a local subsidiary who wanted
Re:Won't solve anything (Score:5, Insightful)
This isn't just a money grab, it's about curtailing extreme abuse of the system. These companies benefit from the services paid for by taxation (infrastructure, education, healthcare, legal system etc.) but contribute almost nothing back. Certainly nothing like what the law intended.
Essentially it's a bugfix to stop people abusing a flaw in the system, like a developer would ship for an MMO if players discovered a way to harvest vast amounts of gold in a way that was never intended.
Re: (Score:3)
This isn't just a money grab, it's about curtailing extreme abuse of the system. These companies benefit from the services paid for by taxation (infrastructure, education, healthcare, legal system etc.) but contribute almost nothing back. Certainly nothing like what the law intended.
On the one hand, yes sure if they are actually illegally not paying taxes then I have no argument against that. If those are the taxes that the country has democratically decided. If a company just has a physical address and doesn't really do business in a country and then yes we are likely dealing with some level of fraudulent behavior just moving money around and laundering it in the lowest taxed placed.
But for the most part what we are talking about are companies following the letter of the law to av
Re: (Score:2)
There, FTFY
Re: Won't solve anything (Score:5, Interesting)
Corporations earning money and paying other countries for the services and infrastructure that THOSE countries provide at lower prices - that is, like, SO unfair! You may say that "taxes are theft" as a general attitude is extreme, but this particular tax initiative is most definitely theft and nothing more.
May I direct your attention to Starbucks? Starbucks have traditionally paid practically nothing in taxes in any country in the EU. They achieved this by putting all the profit onto their beans -- all Starbucks Whatevercountryorother LLC/Ltd/GmBH subsidiaries have to buy official Starbucks coffee, which is a 100% closed market. Starbucks coffee for Europe is sold via Switzerland, but the coffee never even enters the country. Starbucks' operation in Switzerland is just an office that subcontracts most of the work out. The actual operations of the company are not built on Swiss services or infrastructure.
Or how about Amazon? For most of Europe, we buy our goods from Amazon's Luxembourg operation, and they subcontract "fulfilment" to a local Amazon subsidiary who then ship it out. The goods are never in the physical possession of the Luxembourg company, and never ever visit Luxembourg. I could order a product that was designed and made entirely in Scotland from Amazon, have it delivered to me here in Scotland from an Amazon UK site in Scotland; the item would never have left Scotland at all, and yet I've allegedly bought it from a Luxembourg-based company. Again, the services and infrastructure that the business relies on are not merely based in Luxembourg -- the majority of it is not. And yet the UK tax evaporates.
Part of the point of laws like this is to level the playing field -- small specialist webshops are constantly being crushed by the likes of Amazon. Not only because of Amazon's natural economies of scale, but because of the manufactured economy of profit exporting.
Re: (Score:3)
The problem with these tax avoidance scheme and Europe's ability to stop them is tied entirely to the fact that several of your own countries are facilitating this. Rather than singling out certain size companies the EU should be going after the countries for creating tax rules that aren't in compliance with Union rules. As it is, the EU is trying to single out several companies rather than attacking the real problem. This distracts the electorate but doesn't actually solve the problem, the problem will con
Re: (Score:3)
Re: (Score:2)
so headline for this story should be, "EU proposes plan to help USA do less crap"
Re:Won't solve anything (Score:5, Interesting)
Now in almost any context I abhor that phrase "fair share", usually there is nothing fair about it. But in this case we're also talking about fair competition. Evading taxes is an expensive game that requires expert knowledge and a fair amount of money to set everything up, but it is also something that benefits enormously from economies of scale: it may cost $5.000 to hide $10.000 in profits, but only $50.000 to hide $1 billion. That puts tax evasion out of reach of small and medium enterprises, who will have an even harder time competing with the multinational giants if they are forced to pay the taxes thet the big boys can evade.
Re: (Score:2)
It's kind of a balance thing. Do note that the moderate middle is not necessarily the correct view in all cases; but most things don't work at extremes. In the great many cases where a moderate middle *is* correct, it's a middle of objective extremes; the golden mean of ideal A and ideal B is not necessarily the golden mean of extreme -1 and extreme +1, and the correct course may not be precisely 0.
It's correct to say that allowing businesses to evade 100% of all taxes is non-ideal.
It's also incorrect
Re: (Score:2)
Casino and hookers? Still better than nothing (providing they are legal in that country)
It's even better when they're illegal. Vice scandals sell newspapers. People tend to buy sweets and fizzy drinks when they're in the newsagent. Thus casinos and hookers stimulate a vibrant local economy. :-)
Re: (Score:2)
Funny thing is I've had quite a few AC comments written in exactly the same style recently. It looks like I've got my very own AC stakler!
Whose so cute? Yes you are! Yes you are!
Ironic (Score:3)
The term 'Offshore' for banking is a very British institution referring to their Crown dependencies on smaller islands, be it on the Channel Islands or in the Caribbean.
In 1978 when I started working internationally all British engineers had such an Offshore Account and it wasn't because they wanted their bank manager to live in nicer weather.
Let's see if there is another howl in Westminster about Brussels interfering in their national interests.
A lot of the problems could have been fixed by the British parliament years ago.
Re:Ironic (Score:4, Informative)
Re:Ironic (Score:5, Interesting)
The timing isn't an accident, and the british commissioner leading it isnt an accident either, its all designed to maximize the chances of it going through.
I think this is a good start, you pay taxes where you earn the money...
Re: (Score:2)
"The term 'Offshore' for banking is a very British institution referring to their Crown dependencies on smaller islands, be it on the Channel Islands or in the Caribbean."
Making it a British problem is the Corbyn line, but it's pure populism and incredibly hypocritical. Britain has recieved flack for hundreds of years for it's imperialism, if we were to start dictating what crown dependencies do, effectively disenfranchising them by removing their previously granted right to independently govern themselves.
Re: (Score:2)
The fact they're crown dependencies should be neither here nor there, we should treat them and their people with the respect that we treat any independent nation.
They're either British or they're not. If they're British, we're responsible for them, and should intervene (as happened for the abolition of the death penalty). If they're not British, we should can the whole Crown Dependency malarky and let them be truly independent nations.
As for Les Îles Falkland (in the original French), I don't see Corbyn's statement as hypocritical really. It is one of self-determination. The Falkland islanders have chosen by referendum to subject themselves to British rule --
Re: (Score:2)
Maybe if you were right - either they're British or they're not, then you'd have a point, but despite your attempt to simplify the issue down to binary dumb-think that's just not the reality we live in. The fact is that self-governing dependencies are an actual thing whether you choose to try and write off the whole issue by pretending otherwise or not.
As for the rest of your post, it was just a mess of confusion of various completely irrelevant issues so I'm not even going to waste my time other than to po
Re: (Score:2)
If we attempt to rule them with an iron fist from Westminster they'll simply choose to go for full independence and continue doing what they do regardless of what we think
So? It seems to me that it would be a lot easier to invade them with the help of the British armed forces than fighting them defending their colony.
we need a "rogue tax-haven nations" list (Score:5, Insightful)
If we can have lists of "rogue nations" and "terrorist organisations" that it is illegal to deal with, then there's no reason why we can't also have lists of "rogue tax-haven nations" (like British Virgin Islands) and "tax-evasion organisations" (like Mossack Fonseca) that it is also illegal to deal with.
It should be a serious crime with huge penalties (both monetary and gaol time) to negotiate with or transact business with any government, company or organisation in one of the listed countries, or to own, operate or conduct business with any listed entity in the organisations list.
That would solve the problem at its source.
And before anyone says that Mossack Fonseca is a legal company that provides other services than just setup of shell companies and tax evasion, the same is true of Hamas. They are a huge humanitarian organisation in the Middle East, providing financial and medical aid and other services to those who need it. Unfortunately, they also have a nutcase terrorist militant wing - this gets them listed as a terrorist organisation and no amount of humanitarian work by the majority non-terrorist parts of Hamas will ever get them off that list.
Re: (Score:2)
Unfortunately, they also have a nutcase terrorist militant wing - this gets them listed as a terrorist organisation and no amount of humanitarian work by the majority non-terrorist parts of Hamas will ever get them off that list.
Yeah isn't it so unfair that if you go round murdering people, then everyone will forget all the good you do too.
Re: (Score:3)
Unfortunately, they also have a nutcase terrorist militant wing - this gets them listed as a terrorist organisation and no amount of humanitarian work by the majority non-terrorist parts of Hamas will ever get them off that list.
Yeah isn't it so unfair that if you go round murdering people, then everyone will forget all the good you do too.
I think you've managed to flip his argument right upside down. His point wasn't that we should turn a blind eye to Hamas's militant activities due to their humanitarian ones -- it was that we (quite rightly) don't, and that we should apply the same standard to organisations that support financial crime and stop using their legitimate activities as an excuse to turn a blind eye. If a foreign company actively advises its clients on how to break laws (the allegations against Mossack Fonseca are not just about
Re: (Score:3)
I think you've managed to flip his argument right upside down.
You are absolutely right. I misread it somehow (the original is quite clear). I retract my statement.
Re: (Score:2)
It's already the case. Izz ad-Din al-Qassam Brigades is the military wing.
Re: (Score:2)
If we can have lists of "rogue nations" and "terrorist organisations" that it is illegal to deal with, then there's no reason why we can't also have lists of "rogue tax-haven nations" (like British Virgin Islands) and "tax-evasion organisations" (like Mossack Fonseca) that it is also illegal to deal with.
It should be a serious crime with huge penalties (both monetary and gaol time) to negotiate with or transact business with any government, company or organisation in one of the listed countries, or to own, operate or conduct business with any listed entity in the organisations list.
That would solve the problem at its source.
And before anyone says that Mossack Fonseca is a legal company that provides other services than just setup of shell companies and tax evasion, the same is true of Hamas. They are a huge humanitarian organisation in the Middle East, providing financial and medical aid and other services to those who need it. Unfortunately, they also have a nutcase terrorist militant wing - this gets them listed as a terrorist organisation and no amount of humanitarian work by the majority non-terrorist parts of Hamas will ever get them off that list.
The British Virgin Islands are not a country, they are a part of Britain. The problem here in the specific case of Great Britain is that they pass tax law reforms and anti tax-haven laws but then ensure that these do not apply to "the colonies of the empire" (did I overdose on sarcasm? to be fair they actually call these places: 'British overseas territories' these days, not colonies). Britain for all it's officially tough stance on tax dodging is in the habit of passing reforms with one hand while digging
Re: (Score:2)
there's no reason why we can't also have lists of "rogue tax-haven nations"
There is. The reason is that the USA would be on that list. Many US states are now tax havens, and that they eroded the banking secrecy of Switzerland, for example, has turned out to be just an effort to eliminate competition.
Re: (Score:2)
There is. The reason is that the USA would be on that list. Many US states are now tax havens,
Isn't there a human involved in opening a bank account? Isn't their identity recorded?
Re: (Score:2)
Oh for fucks sakes.
The issue here isn't that companies structure themselves to minimize their tax burden, but the way taxes themselves are collected.
There is such a regulatory morass that goes with any tax code, and a never ending list of things to be taxed. The reams of paperwork devoted not only to the code, but the army of accountants to ensure compliance, and lawyers to finesse the gray areas of the code.
Isn't it fun how the same big companies that are responsible for much of the tax complexity(*) are now using it as an excuse for their tax evasion?
(*) Some examples: taxes on ISPs to help finance movies and public television; taxes on portable hard drives to help finance the movies and music industries; lower taxes on diesel to keep taxis, truckers and farmers happy; reduced VAT on various products to help the companies producing them, etc.
Re: (Score:2)
Some places like Delaware and Ireland are tax havens but they are also real places with real people living there.
Places such as the Cayman Islands and British Virgin Islands are places with almost no population and/or production and their sole purpose is to be a tax haven. Nothing of value would be lost if we stopped all trade with these entities. The worst would be the loss of tourism destinations but there are plenty of other islands to go to.
Dutch Sandwich and Bermuda Black Hole (Score:2)
Ultimately the corporate taxes are waived in Bermuda (aka. Bermuda Black Hole), I wondered how EU was supposed to regulate it?
Re: (Score:2)
Re: (Score:2)
They refused to disclose the illegal bits (evasion) which are clearly not the bits everyone knows (avoidance).
The Google workaround (Score:2)
So now that it's the run-up to the EU exit referendum in the UK, the Google search engine will be modified so that any "should UK leave the EU" search will simply return "Yes, because we want to keep our tax situation secret in the UK".
Missing the point (Score:5, Interesting)
Capitalism is quite simply the reinvestment in the means of production. With tech companies this can be a complicated relationship with both reinvesting in the actual product, and having the cash available to go around buying out similar companies. Another layer in that involves both issuing new shares to buy companies, and issuing shares to attract investors.
As an example, if a local UK company wants to compete with Google in the ad space in the UK, they will end up paying full taxes on any profits; while google won't. Thus google will be able to return a higher profit to their investors, have more cash to buy out competitors, and will be able to issue more valuable shares as part of those buyouts. The UK company will simply have much of its value continuously eroded by taxes that are annually removed from its balance.
Obviously using google as a comparison to some little ad company is a bit unbalanced, but the same applies to any homegrown company that legally exists only in the European country. Cutting edge drones, robotics, 3D printing, or pretty much anything along those lines will not be able to match the growth curve of a company paying a tiny fraction in taxes.
Those sort of companies that could otherwise become international players are what drives a country's economy. To allow certain countries to always have the upper hand is just going to be a long term bad plan.
So I wouldn't be so much worrying about the handful of missing billions but the long term missing trillions.
So quite simply, make sure that these international companies are under the exact same tax burden as a local company when it involves any business within Europe.
So if a local company were to make an apple priced smart phone and would end up paying $80 in taxes. Make sure that Apple selling the same phone is paying $80 in taxes regardless of what paper shenanigans they try.
Re: (Score:2)
Bullshit.
Who was the first? (Score:2)
Re: (Score:2)
This has been going on far far far longer than existence of google, or apple or facebook.
These tax havens have been running like this for last couple hundred years.
Just because it's being advertised now doesn't make it a new thing.
Re: (Score:2)
What a surprise (Score:2)
a new clause has reportedly been added to require the companies to say how much money they make in so-called "tax havens."
Proving once again that politicians have zero understanding about how a "tax haven" actually works. I can't really declare income on money that doesn't belong to me anymore...
Pay tax where business is done (Score:2)
Companies should pay tax in all locations in which they operate. If they gross some amount across 2 countries, and they're earnings are split 60/40 between countries A and B, then they should be taxed on 60% of their earnings at country A's tax rates and 40% at country B's tax rate. If any money is shifted between country A and B within the company, then it should be taxed leaving country A at their tax rate, and entering country B at their tax rate. This might reduce the advantage for countries with lower
Re: (Score:2)
Re: (Score:2)
That is, in fact, how it works today. You pay corporate profits taxes at the rate of the country in which you earned those profits. High-tax jurisdictions don't like this, though, because companies will shift their profit centers to those low-tax jurisdictions. And somehow that's "not fair".
I wonder how many of those bureaucrats clammoring for "fair share" tax payments refuse to take deductions on their own personal income, and ensure they pay at least 64% to match the highest personal income tax rate [wikipedia.org] in
"fair share" (Score:2)
When it comes to taxes, those who throw the phrase "fair share" around interpret it as more, more, always more, more, and a hell of a lot more.
Re: (Score:2)
Re: (Score:2)
That's more reasonable, good.
I wonder though - why "the same rate"?
What makes a proportion of profit (or income?) the natural tax amount, as distinct from e.g., an accounting of government services used?
Fine no tax then no fire / free ambulance / cops (Score:2)
Fine no tax then no fire / free ambulance / cops / etc.
Now it's not fair to the workers to cut them off from the ambulance so if need we bill your office for that cost if needed. And if it's a night and some one beakers in we are not sending the cops to help you.
Say (Score:2)
Isn't Ireland (Eire) in the EU ?
They must have low taxes or why would so many US companies movr their KQ there...
Subsidiaries (Score:2)
It's not Facebook or Google. It's Facebook-UK or Google-Italy. Each can report their income and expenses within the jurisdiction that they operate. Usually this is an individual country. Those expenses can include interest, franchise, management, licensing and other fees paid to the parent corporation. If this parent corporation resides outside that taxing jurisdiction, good luck getting any continent-wide or global information out. The subsidiary doesn't have access to it and the local taxing authorities c
I wish (Score:2)
>> 600 million euros a year (nearly $700 USD)
I wish. I could retire on the change in my pocket.
Going after tax havens? (Score:2)
Since the Panama Papers, a new clause has reportedly been added to require the companies to say how much money they make in so-called "tax havens."
To pretty much every country, every other country charging a lower corporate tax rate is a "tax haven". Why don't they just come out and state they want to tax earnings made overseas since other countries are somehow able to charge lower tax rates, and that's "not fair"...
Heck, let's just jack everyone up to the level of the US, near 47% [wikipedia.org] just to make it fair worldwide...
Re: (Score:2)
That would be the authors of the plans themselves.
But the idea is not completely wrong as to find out if someone pays all due taxes, you need to know how many taxes he's paying to begin with. The next step would be to use those data to recognize money-shifting for tax reason. Final goal would be to close the multinational legal loopholes used, but that's scheduled well after world peace and understanding women... (I heard they booked a conference room for a discussion on that subject at the new Berlin airpo
Re: (Score:2, Interesting)
if you are not required to pay your part, then the gov't has no obligations to serve you. none whatsoever.
it's really that simple.
no tax= no infrastructure, health, schooling, law enforcement or anything really. want that backroad fixed? pay up. you're having problems with burglars? tough. hire a guard service. ... oh wait, you already do.
broke a leg? pay up!
Re: (Score:3)
Infrastructure, health, schooling, and law enforcement are paid for through local taxes, user fees, and sales taxes; they do not justify national corporate taxes.
Furthermore, the US has spent massively on European defense, so by your reasoning, US companies operating in Europe should get a massive tax break just for that.
Re:All tax is immoral (Score:5, Insightful)
Punish the wealth creators, and they'll stop creating wealth.
Considering all the wealth they create ends up in their own pockets, I'd say it's a fair deal.
Re: (Score:2)
Considering all the wealth they create ends up in their own pockets.
This is a common misconception and you know it.
Not so much when that pocket is an offshore account in some tax haven.
Re: (Score:2)
Yes, a lot of it goes towards offshoring jobs.
Re:All tax is immoral (Score:5, Insightful)
Re:All tax is immoral (Score:5, Informative)
The term "wealth creator" is basically a giant red flag that means "This person is an utter tool or a troll or both".
Re: (Score:2, Informative)
The term "wealth creator" is basically a giant red flag that means "This person is an utter tool or a troll or both".
It is a term lifted from the writings of Ayn Rand and means somebody who strives to be utterly completely and perfectly selfish and most of all strives to prevent socialism, communism, and any other state intervention in society, that allows poor people to "leech" his hard-earned wealth.
Re: (Score:3)
Re:All tax is immoral (Score:5, Insightful)
Punish the wealth creators, and they'll stop creating wealth.
Nonsens. Who do you think are the real wealth creators? The fat cats that sit at the top, skimming the cream off the labour of others without much effort? Or the people who put in a real day's work, whether they are called engineers, hi-tech entrepreneurs, farmers or manual labourers? All of these groups of wealth creators will keep working, because they have to, whether they pay taxes or not; if they don't, they can't feed their families. If your only contribution to society consist in siphoning un-earned money into your own wallet, then you are nothing more than a parasite, and the rest of us would be better off without you.
Re: (Score:2)
And if those fat cats happen to have started a successful business and made it grow through good strategic leadership, are they still leeches siphoning un-earned money?
Look at your own question and tell me if you haven't already answered it. If you start a business and provide good leadership, does that not add value to the company? That isn't the same as sitting on a big pile of money and lending it out in order to skim off interest of the work of others.
Re:All tax is immoral (Score:4, Insightful)
The ratio of wealth creators among the 1% is probably also on the order of 1%. Most of the super-rich don't create wealth, except for themselves. In my country, recent statistics say that 80% of the wealth of the rich (millionaires and above) is inherited.
Lots of the famous super-rich started that way. Gates parents were wealthy, and the Trump empire was built by two generations (not including Donald).
The real wealth creators are in the middle class. Not the one-in-a-million startups that make billion dollar IPOs, but the one-in-five startups that create a viable, middle-sized company and employ a dozen or a hundred people.
That is where wealth is created. And incidentally, it is also where taxes are the most heavy. Because all the tax breaks that are pushed through with your argument are always for the top.
Re: (Score:3)
William Gates II was a lawyer for the bankers and did well enough to put a million dollars in trust for William Gates the 3rd as well as send him to an expensive school where he had early access to computers and his Mother was well connected enough to get him introduced to the big shots at IBM
Re:All tax is immoral (Score:4, Insightful)
Punish the wealth creators, and they'll stop creating wealth. -- roman_mir
Oh yes, I can just picture it now. "What?!? I'm only going to get 3 gazillion megabucks? But I wanted 5 gazillion megabucks. Sod it all. I'm declaring insolvency!"
Re: (Score:2)
What I'm seeing is a lot of people looking at their 401K (or whatever equivalent retirement account system their country might have) and saying "Hey! Why is my retirement account growing 35% slower than it has been for the last ten years???"
Pay tax or bug out (Score:2)
And yes, it might become more difficult for them to hoodwink their (EU) state tax office when they have to disclose what they earn and how much tax they pay in which other EU state.
In the US you can't avoid the IRS either by clever apportionment of your business between Vermont, Wisconsin and Hawaii. You're free however to pack up in one state if you think you're better off in another state for tax reasons.
In that way, state ta
Re: (Score:2)
Until there is a single EU tax authority, your analogy is nonsensical.
Re: (Score:3)
You wanna make business in my country, you gonna heed the laws of my country.
But this ain't North Korea. You're free to get the fuck out any time you want.
Re:Actually this is the problem (Score:5, Informative)
It comes from a supreme court case in 1910 when a corporation decided to pay it's workers a decent living wage, and cut margins a bit to afford that. The shareholders sued claiming the CEO had no right to pay workers a penny more than the least he could get away with - as that reduced their profits. They won.
However, it's pretty important to know that this was an American case, it has no bearing on any other country nor is it supported by the laws of any other country. German law, for example, does not describe companies in a way that could possibly support such a legal finding - companies there are described as communities existing for the benefit of all involved - shareholders, employees and customers alike and would lose a case where they screwed any of those (which is why in Germany every corporate board HAS to be made up of 50% non-shareholding employees, usually appointed by the union).
So the logic that drives that is uniquely and exclusively American (and to a lesser extent exists in Britain) but the rest of the world is not that insane. This is why laws like these tends to look like they target American companies (look at how facebook got mentioned here) - it's not really the case, they are laws the likes of which European companies have always worked with and complied with happily because *not* complying would require doing unthinkable. The utterly opposite incentives created by US laws leads to US companies feeling targetted since their behavior mostly consists of those "unspeakable things".
Re: (Score:3, Interesting)
It comes from a supreme court case in 1910 when a corporation decided to pay it's workers a decent living wage, and cut margins a bit to afford that.
There is no legal duty [nytimes.com] to maximize corporate profits and 'shareholder value'.
And what supreme court case are you talking about? Dodge v. Ford Motor Co [wikipedia.org]?
That was a Michigan Supreme Court case, not a US Supreme Court case. And even that case really has nothing to do with shareholder value.
Re: (Score:3)
Just like Americans can elect someone different if they don't like how the government is spending their money.
Re: (Score:3)
Taxes are theft.
Lack of taxes is lack of theft, but the converse is not true.
Theft is a crime. Crime can only exist if there is a legal system. There cannot be a legal system without a public body. There cannot be a public body without public infrastructure. There cannot be a public infrastructure without public money. There cannot be public money without public income. The catchall term for public income is "tax". Therefore there can be no theft without tax.
(Strictly speaking, what I have said is not true. Fines and penal
Re: (Score:3)
Re: "Fair share", my ass. (Score:2)
Well it makes even more sense comsidering the phrase is French in origin. Predates communism by about 2 centuries and was the original credo of classic libertarians.
Re: (Score:3)
What pet causes would that be exactly? Police? Road maintenance? Military?
It may be news to you, but your finance minister doesn't put it in a huge money bin a la Scrooge McDuck to swim in it. If you want to find out what asshole you have to pay taxes for, find a mirror.