> I hate how google, facebook etc. makes hundreds of millions in my country, but barely pay taxes.

Figuring out how much a large company makes is complex, which is why we have a very complex system of rules and laws to let us calculate it. And according to those laws, Google, Facebook, etc. don't actually make hundreds of millions in profit in your country.

That's why they don't pay taxes, and it's what the linked article is about: Because your country (and mine) has passed laws which say that they aren't making money despite what your intuition tells you.

If you want to fix it, the starting point would be those laws. Except...we've been trying to improve those laws for a long, long time. Many are now many decades old. Transfer pricing rules exist for a reason; simply abolishing them would cause other problems and greater imbalances.

At some point maybe we need to step back and focus on taxing the consumption of real people (which is, in comparison, much easier). Facebook may be inherently hard to tax; but those profits flow into the pockets of real people, and they are (in comparison!) easy to tax.

Real people disproportionately situated in the US. I'm not sure if that helps any of those other countries.

The basic problem is companies using public resources of a country but not paying back into the system.

If you're taking about resources which have usage which is measurable and excludable (postal service, road network, legal system) then charge for use. Amazon relies heavily on the road network to deliver goods; it's trivial (and a good idea in any case) to charge commercial vehicles a fee to cover their wear and tear on the roads, carbon emissions, etc. Similarly, if they're filing legal cases, charge them a fee, etc.

If you're talking not so much about them using actual resources, but benefiting in some vague sense from a country having a functioning police system, even if they don't actually use it, then no, you can't charge them fees. But if they're making sales in your country, you can charge GST/VAT.

But if they're not using actual resources, not making sales in your country, and not making profits...

...then they're not going to be paying back into the system. Even if you really need them too, even if it would be highly immoral for them not to. The existence of a problem doesn't imply the existence of a solution.

Companies want to pay no taxes, but they want protection from the legal system infrastructure etc. that allows a company to be successful.

You can't have cake and eat cake. Without taxes there would be no system at all. It's a shame that small companies pay for this system and big corporations use this system but evade paying. No justice in this.

There is so much inefficieny in gov't spending that your statement is meaningless. The biggest line items in the gov't budgets have nothing to do with the legal system or infrastructure.

Government, by definition, can be more efficient than any private entity because it never needs to produce a profit. Businesses need to be able to skim a little off for the owners. Government can provide services at cost, no mark up.

If you're unhappy with the implementation of a specific program, like Medicare (which is, of course, more efficient than private health insurance in the US), let's talk about that.

My pick is the military--very wasteful. We could fold 90% of that budget into university and health care and live in heaven on earth.

But profit creates an incentive for efficiency. Sell the same thing for 1% lower than your competitor and that goes right into your pocket.

Our current gov't system provide very little incentive for efficient use of funds.

I'm not arguing that all of these programs need to just disappear. I'm arguing a "race to the bottom" in terms of efficiency is a good thing, not a bad thing for gov'ts.

I think the kind of constant oversight and worrying over how our tax dollars are spent creates an incentive for efficiency. And the ability to vote regularly on elected officials who guide our programs, that too creates an incentive for efficiency.

Having seen what races to the bottom do in various other industries, I shudder to think of how government works would suffer under the same pressure. Not the kind of society I'd want to aspire to live in.

Medicare and social security pays for the millions of people who have help build this country. Yes the government might be inefficient. How many google, Facebook, and apples are coming out of Ireland or India?

Seems like he only long term answer is somehow to make global companies beholden to a global tax authority, but no idea how that would work on a planet with sovereign nations.

It would be additional global tax from capital. If you are interested more read "Capital in the Twenty-First Century" by Thomas Piketty.

They should isolate countries like Ireland who are allowing countries to wash profits through their territory to "allow investment".

Ireland is 5m people. Just hang them out to dry. Either they consume as much as they add in value or their standard of living has to drop until this is held to be correct.

Why do you think paying taxes is a virtue ? Why does US government need 40% of our hard earned money ?

May be American politicians should stop the war on drugs, wars in far off countries and medicare and reduce tax levels to 20%.

Facebook, Google, Apple and push the frontiers of human knowledge at rapid rate if they can spend that money themselves. In case of government it will be used to by some junk airforce planes that dont fly.

> Facebook Google and apple shouldnt be taxed BC theyre r and d

Lol. Most real frontier level r and d is funded by the gov with tax money, especially the not for profit r and d focused on energy and health sectors. The only r and d the tech cos you named do is targeted to make profit for themselves which is why they pay taxes. I agree that a lot of tax money is wasted but some of it is used for critical research.

When facebook starts a non profit division researching better nuclear storage containers and cancer treatments then, maybe that division shouldnt be taxed. I mean these are essentially advertising based businesses, so that's not really pushing the frontiers of human knowledge in a uniformly positive direction.

Government barely spends and money on research and most of it is on subjects that have 0 impact on anything for example giving heroine to monkeys.

Paying taxes isn't a virtue, it's fair trade for services and security, which all of these companies benefit from within the U.S., and without which they would likely have never come to be.

Your taxes would be a lot lower if the biggest corporations were paying their fair share.

There is not such thing as "fair share" of what someone else has earned.

Sure there is. It's what we vote on and agree to as members of a democratic society.

No one earns anything in a vacuum. Money doesn't exist without society. Taxes reflect that.

Because unless you never use government built infrastructure, contributing back to society is kind of your duty.

I live in France, my employer pays my raw salary in taxes, and approximately 30% of this raw salary that I get is paid in taxes too. And I am happy to pay those because it contributes to a system that gives me and everyone free healthcare, unemployment benefits if needed as well as many other things. If you're unhappy with the 40% you pay to your government, ask to fix inefficiencies, not to stop paying them.

Serious question: who pays an effective rate of 40 percent? Many of these huge corporate entities are in the single or negative digits.

They hire very expensive lawyers and accountants to pay less or simply bribe politicians (read speech money) to keep loopholes that will benefit them. As a result a lot of money is wasted to totally unproductive efforts while increasing corruption and lowering respect of the tax system.

That's because they are deferring the taxes on the ex-US money.

It's a 401k in the US. It's a tax deferment, not a tax break. If your effective rate went from 35% to 25% due to your 401k contribution, you still end up paying 35%, just not right now.

No, you don't end up paying 35%. Part of the advantages of a 401k come from distributing dollars being taxed at a high marginal rate to another year when they are taxed at a lower marginal rate.

It all depends. Sure, if you put almost nothing in a 401k, then when you pull it out, you'd be in a lower margin tax bracket (and living on very little money).

But if you put a lot in, the fact you HAVE to start taking money out at a certain again AND it all gets taxed before you die means you pretty much end up paying the taxes anyways (or more if rates have gone up).

It's slightly different here, but effectively the same. Individuals get sold on the idea of "tax-back" from the taxation authority at the end of the year... They get bombarded by financial consultants that tell them they have to put up to 30% of their post-tax earnings into 401k-type accounts because they are "maximizing" their "tax-benefits".

A lot of them even have no idea that they will be taxed anyways when they withdraw.

Which, not coincidentally, is also what the companies stashing profits overseas hope to accomplish through future changes in the tax law.