Slashdot Mirror
Germany Urges Global Minimum Tax For Digital Giants (yahoo.com)
Germany is backing a global minimum tax rate as Europe looks to levy tax notably on U.S. tech giants. "Europe is trying to devise a strategy to tax profits from the likes of Google, Amazon, Facebook, Apple and digital platforms such as YouTube and Airbnb which currently manage to keep fiscal exposure to a bare minimum," reports Yahoo News. From the report: "We need a minimum tax rate valid globally which no state can get out of (applying)," Scholz, a social democrat in conservative Chancellor Angela Merkel's coalition government, told the "Welt am Sonntag" weekly. Digital platforms "aggravate a problem which we know well from globalization and which we are trying to counter -- the shifting of profits to fiscally beneficial regions," said Scholz. Scholz explained he had launched an initiative designed to help states react to so-called fiscal dumping in support of embryonic OECD plans designed to fight tax transparency and cross-border tax evasion. "We require coordinated mechanisms which prevent the displacement of revenues to tax havens," said Scholz. A March proposal by the Commission includes introducing a tax as a bridge measure until such time as the OECD can roll out a measure which can be applied globally.
EU does not need to ask permissions how to tax countries selling to their consumers.
Yes they do. It is a blatant violation of WTO rules to tax American products differently based on their origin. So they have to craft this carefully so that only American companies pay the tax and no European companies are inadvertently snagged, without explicitly saying that is their goal. One way to do this is to penalize "bigness", but that is clearly a contrived distinction, so expect this to be vigorously challenged by the US in the WTO courts.
Scholz's words will come back to haunt him. He is basically admitting to designing an illegal tax policy. It is hard to claim you are not intentionally targeting Americans when you have already clearly stated that you are.
Didn't read the first sentence of the summary, huh?
It doesn't matter if the US agrees or not. What Germany is proposing is that the EU implements a minimum global tax rate for companies that do business in the EU. So if the minimum global rate is say 10% and the US levies 15% all is well. If the US only levies 5% then the EU will collect the other 5%. Numbers made up.
This has nothing to do with the US though. This is about tax havens and companies funnelling profits out of the EU. They use bullshit like ridiculous licencing fees to a holding company in the Cayman Islands to claim that their EU operation is making no profit and only has to pay a tiny bit of tax there, but the EU will just tax them based on global income instead.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Try bumping your thinking up one more abstraction level. Who pays corporate taxes? Corporate taxes are taken out of profits. Profits are distributed to shareholders. Shareholders wishing larger distributions (higher profits) insist on lower employee wages and higher prices for products. So corporate taxes are paid for via (1) higher product prices, (2) lower employee wages, and (3) lower shareholder distribution.
There's no need for corporate taxes if you just tax those three directly. (1) can be replaced by a sales tax. (2) can be replaced by an earned income tax. (3) can be replaced by a unearned income tax (interest on savings, distributions). None of these can be thwarted by the Double Irish. (1) yields tax revenue in the country where the sale occurred. (2) yields tax revenue in the country where the company is operating (has employees). (3) yields tax revenue in the country where the owners reside. All bases are covered. The only difference is in the bookkeeping.
The only reason the Double Irish works is because corporations can exist simultaneously in multiple countries. People can only exist in one country at a time, so they can't pull off a Double Irish. So it's easy to eliminate this problem - eliminate corporate taxes and shift them to sales, earned income, and unearned income taxes. The only problem is that a large number of people mistakenly think that corporate taxes have no impact on people, and so feel taxing corporations is preferable to taxing people.
There is no difference - no matter what you tax, in the end a person somewhere pays for it. Taxes are an assignment of a percentage of the country's productivity to the government coffers. And since the only source of productivity is people (everything a company does is done by its employees), in the end all taxes are paid for by people. Get yourself over the notion that corporate taxes are necessary and the Double Irish problem vanishes. Corporate taxes accomplish nothing which cannot be accomplished with different taxes.