Four EU Countries Seek Higher Taxes On Google and Amazon (reuters.com)

An anonymous reader quotes Reuters: France, Germany, Italy and Spain want digital multinationals like Amazon and Google to be taxed in Europe based on their revenues, rather than only profits as now, their finance ministers said in a joint letter. France is leading a push to clamp down on the taxation of such companies, but has found support from other countries also frustrated at the low tax they receive under current international rules. Currently such companies are often taxed on profits booked by subsidiaries in low-tax countries like Ireland even though the revenue originated from other EU countries. "We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries," the four ministers wrote in a letter seen by Reuters.

Comments

Taxing revenue may actually be the best thing

[Solandri]

Because it makes it completely clear who is actually paying the taxes - the customers. A tax on revenue is otherwise known as a sales tax.

Companies don't pay corporate taxes. It gets passed on to customers as higher prices, to employees as lower wages, and to owners/stockholders as reduced dividends. You see, companies are just paper entities - they don't really exist. They're just a line a bunch of people (owners/stockholders and employees) draw around themselves so they can declare "we are working together." All the productivity, all the innovation, all the decisions are made by those people, not "the company". The company is just an inanimate banner, a flag they hold over their operations.

So you can't really tax a company. That's like impounding a car for assisting in a bank robbery, or sentencing a PC to prison for being used in a hack. Losing those items just turns into an additional financial expense for the people who used to own them. Likewise, corporate taxes are just additional financial expenses for the people involved with a company - owners/stockholders, employees, and customers.

Once you realize this, you realize how stupid it is to have a million different taxes for a million different things. It's a horribly inefficient way to collect tax revenue. The most efficient method would be to have a single tax which you assess against all people. If you believe in progressive taxation, then the obvious tax to keep is the income tax. Pretty much all other taxes* can be eliminated with no effect on the economy or tax revenue, other than vastly reducing the amount of money wasted on collecting taxes and forcing people/businesses to keep track of a million different taxes.

* (Behavior-modifying taxes would still be useful since their primary goal is not to collect revenue for the government. e.g. Fuel taxes to encourage energy efficiency, property taxes to prevent speculators from holding on to fallow land which could otherwise be put to much better use.)

This also avoids the hypocrisy of saying you believe in no taxation without representation, then simultaneously wanting to tax corporations while believing they should have no role in government.