It is at the very least hard. How would the law work?

Will it be illegal for a company to sell/transfer their intellectual property to a company in the Caribbean? Will it be illegal for that company to license intellectual property to a company in the US?

Everyone feels they can recognize tax evasion when they see it, but to come up with a set of quantitative tests that can be applied fairly is difficult. Being able to apply the law consistently is essential, as the government will picking market winners and losers if they let some companies get away with tax evasion but not others.

One of my biggest criticisms of income tax is that it is such a nightmare to implement fairly as income is very fungible.

Why not? I'm sure the tax havens would be very quick to adopt sensible tax rates to stop the ban.

So you need all countries to coordinate on this front. I also don't see how the ban would encourage the Caribbean to adopt "sensible" tax rates. In the Bahamas, Bermuda, Cayman Islands, or the Virgin Islands, the corporate tax is already zero. Not sure how much leverage such a ban would actually have over these countries.

The second problem is in the actual legislation. How is the law going to be written? Is it going to be a fixed list of countries that congress must update? Any country with a 0% tax rate? A new FTC style body that adjudicates which countries are "tax havens?" Because all of these can be circumvented with just a little elbow grease.

The final problem is enforcement. Can intellectual property be sold to other countries in the US? Can those companies be sold to foreign companies? If a US company is a acquired by a foreign company, could that company then not license software to US companies? Are all transactions between US and foreign companies going to be individually monitored? Because that is a lot of work, and if you don't do that, it's very difficult to enforce the law.

Basically, if someone was to sit down with the specific goal of designing a tax that could be easily evaded, they would come up with the income tax. Personally, I feel it's better if we adopt taxes that are more easily enforced and more progressive than the income tax. But for some reason, the corporate income tax remains relatively popular with politicians and voters around the developed world.

Yea, I don't think there would be anything "simple" about this, for all of the reasons listed in my reply above.

> Seems to work well for China.

We have very different definitions of "work well." I assume you are referring to the recent tariffs, in which case we gave China an ultimatum, and they said go for it, and are imposing retaliatory tariffs.

If China had actually changed any of their trade policies to be more fair, I would have considered that to have "worked well."

What we got instead was a trade war, which was to be expected. Basically ultimatums are always an ineffective negotiating tactic as they force politicians in the receiving country to reject the offer, no matter how reasonable.

No, I'm referring to the fact that foreign (Western) companies cannot sell in China unless part of the products are made there, and can't own Chinese companies without Chinese co-ownership. It all resulted in a massive transfer of IP to China, simply because for most companies, the tradeoff still made sense (short-term at least) (Google is a notable exception).

The amount of law and international agreements that would be overturned by such a change is truly staggering, so I’d still say this is the antithesis of simple.

Further, I’m not sure China’s model, and protectionism in general, is a better strategy. No way to know, but I expect China’s economy would be stronger if it didn’t have these protections.

Like I said, there are a hundred things we can tax; why do we only want to tax the one that’s easy to evade?

(By “forbid” I of course mean “tax so heavily it just doesn’t make any economic sense”.)

Here's a fun explanation of the kinds of hoops corporations will jump through to dodge taxes: https://en.wikipedia.org/wiki/Double_Irish_arrangement

You're missing one piece of the puzzle: the Irish government is fully complicit in all this, with a "beggar thy neighbour" strategy to cream off taxes from their supposed partners and allies.

If the penalties were harsh enough, wouldn't it change this dynamic?

1) Nation states are their own sovereigns. Judging from that humans usually support things like the united nations and the law of nations, that will always include their sovereignity over their tax-design.

2) international flow of money is usually desired and thus encouraged. If you can afford to limit the flow to your country, fine. But less fortunate might be hard to convince to decline the benefits of it.

3) The more money you can spend on tax-lawyers, the more likely you are to be able to design your tax burden more efficiently around your needs (needs meaning your business objective + less taxes)

Also IMHO it's fair to say that the more complex a country's tax code, the higher the income-inequality in terms of access to tax-rate-optimum.

We should do only one of those things.

Every person should incorporate themselves and do what the big guys do.

What the logic behind this 'ideal'?

the corporate tax is actually very controversial among economists. it seems like a straightforward case of "making the big corps pay", but there is very little consensus as to who ultimately foots the bill for this type of tax.

This a solution which is easy to explain, but hard to implement.