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UK Announces 'Google Tax'
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.
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.
I love Jesus, except for his foreign policy.
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.
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, but I disgress).
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?
"I do not agree with what you say, but I will defend to the death your right to say it"
As the parent poster stated: "in EXCHANGE", or in other words you're paying for it. You can't rebut an statement if you've only bothered to read half of it.
Parent poster is right: western nations with higher tax rates generally do offer more stable, safer, societies, and corporations are all too happy to take advantage of that without making their contribution to that society.
And yes, governments do have the right to tax you. You can bleat about libertarianism all you like, but elected governments get to make the laws, and you can either abide by them, or piss off somewhere else without any pesky laws. I understand Somalia is nice at this time of year.
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Corporations love to socialize the risks and privatize the benefits. If some Pharma company releases a drug that kills a bunch of people, I don't hear the libertarians calling for liability for anybody who had money in a 401k that was partially invested in a mutual fund that had .5% of its shares in the company 5 years ago when the decisions were made that led to the problem.
And this is why corporations make short-term decisions. The person making the decision gets his bonus today. The shareholders get their dividends today. The consequences (if any) come for the shareholders 5 years from today.
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.
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.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.