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A comment on Three European Countries Block Tax on Tech Giants. Parent comment

Re:Three European Countries Block Tax on Tech Giants by bluecalm on Tuesday November 06, 2018 @01:46PM (#18393765)
This is because taxing profit is a very bad idea. It leads to situations where two companies doing exactly the same thing pay different taxes because one uses less efficient (and often more polluting) technology or just chooses to buy luxury cars for the employees instead of showing profits. The tax on profits is a tax on honesty in accounting and even if accountats are honest it's still impossible to determine fair value of things like offshore licensing.

Once you accept taxing corporate profit is a very bad idea the solutions magically appear: tax consumption and things we don't want (pollution, land usage etc.) It's very easy to make consumption tax progressive if you want that (higher rates for luxury goods, refunds up to X amount per month, funding social services with it etc.).

There is no reason to debate what a company based in country at the end of the world should pay or how your neighbors choose to tax their companies. If they do business in your country the revenue is collected by consumption tax. If your country is nice to live in people will move and pay tax there. The incentives are right for the politicians: make your country businesses friendly and a nice place to live and for the companies who move to places which are more business friendly and better to operate in as tax rate isn't an issue anymore - everyone sets their consumption tax rates and everyone who sells there must oblige.

The countries setting their corporate tax to near 0% have the right idea. I hope they won't be bullied of their position.

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Re:Three European Countries Block Tax on Tech Giants by pmontra on Tuesday November 06, 2018 @02:20PM (#18394077)
> If your country is nice to live in people will move and pay tax there.

Many countries apparently nice to live in are doing their best to keep people out.

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Re:Three European Countries Block Tax on Tech Giants by gruez on Tuesday November 06, 2018 @06:44PM (#18395907)
>or just chooses to buy luxury cars for the employees instead of showing profits.

those purchases are taxed as income

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Re:Three European Countries Block Tax on Tech Giants by bluecalm on Wednesday November 07, 2018 @11:03AM (#18399982)
I meant buying them as company cars. I hoped it's obvious. It's the reason there are so many nice things bought by companies and why they organize expensive symposiums and meetings in nice locations - there is a rebate on that.
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Re:Three European Countries Block Tax on Tech Giants by amelius on Tuesday November 06, 2018 @01:57PM (#18393878)
> This is because taxing profit is a very bad idea.

Wouldn't the same argument hold for income tax then?

I mean, I can evade income tax to a certain extent by making my boss buy me a nice car, computer, bicycle etc.

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Re:Three European Countries Block Tax on Tech Giants by rubber_duck on Tuesday November 06, 2018 @02:09PM (#18393994)
He can't, if he buys it as company expense then it's not your property.

But yeah same is true for income tax, my country has a really high wage income tax at top bracket (close to 50% with health&benefits) that kicks in really fast, but profit income tax caps at 20% because people would just take profits out of the country if it was higher. so a lot of people work around it by invoicing their salary as self owned company pay min wage and take the rest as profit.

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Re:Three European Countries Block Tax on Tech Giants by bluecalm on Wednesday November 07, 2018 @11:06AM (#18400006)
It makes some sense because wages come with a lot of benefits guaranteed by labor law while self employed people take a lot of risks but in general I see progressive taxes as a bad idea inviting scams. It's better to tax consumption of luxury goods at higher rate and/or use more tax revenue to fund social services mainly poorer people use.
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Re:Three European Countries Block Tax on Tech Giants by leifg on Tuesday November 06, 2018 @02:11PM (#18394010)
That is absolutely true. The reason why it's not discussed on the same level is the scale.

The profit out of salary (for most people) is just not big enough to justify an accountant to optimize.

There is a lot to be said about replacing income tax with a pure consumption tax (it is one possible financial model for the universal basic income).

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Re:Three European Countries Block Tax on Tech Giants by nitrogen on Tuesday November 06, 2018 @02:30PM (#18394168)
Company cars are a benefit in kind and are taxed in the US
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Re:Three European Countries Block Tax on Tech Giants by daurnimator on Tuesday November 06, 2018 @08:59PM (#18396620)
> I mean, I can evade income tax to a certain extent by making my boss buy me a nice car, computer, bicycle etc.

Most systems tax these at a higher rate. See e.g. https://en.wikipedia.org/wiki/Fringe_benefits_tax_(Australia...

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Re:Three European Countries Block Tax on Tech Giants by openasocket on Tuesday November 06, 2018 @02:09PM (#18393990)
Income tax is more like a tax on revenue, not a tax on profit. And your boss would have to pay taxes on gifts, so while you might not have to pay for it, the government is still getting its due.
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Re:Three European Countries Block Tax on Tech Giants by mh8h on Tuesday November 06, 2018 @02:16PM (#18394044)
It really depends on the tax jurisdiction. In some jurisdictions, those perk are taxable benefits.
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Re:Three European Countries Block Tax on Tech Giants by the8472 on Tuesday November 06, 2018 @02:09PM (#18393992)
Private use of corporate assets is considered income-equivalent for tax purposes.
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Re:Three European Countries Block Tax on Tech Giants by openasocket on Tuesday November 06, 2018 @02:13PM (#18394021)
Can you have a progressive consumption tax though? Because otherwise the average corporation would have to pay a lot more in consumption taxes vs corporate taxes to keep things revenue neutral.
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