France Plans 5% Digital Tax as Governments Chase Internet Giants

Re:France Plans 5% Digital Tax as Governments Chase Internet... by ip26 on Sunday March 03, 2019 @03:25PM (#19296613)

Not an economist so I don't know the official reason. But a corporation can theoretically accumulate profits indefinitely without making a payout, while governments need stable yearly revenue.

Maybe more material from a public policy point of view is that we like to tax different things at different rates, to favor or disfavor spending on various things. Hard to tax a salary based on what the employer spent their money on.

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Re:France Plans 5% Digital Tax as Governments Chase Internet... by tonyedgecombe on Sunday March 03, 2019 @03:46PM (#19296740)

A corporation could accumulate although I expect shareholders would stop that fairly quickly.

You could still implement Pigovian taxes such as fuel or alcohol duties.

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Re:France Plans 5% Digital Tax as Governments Chase Internet... by petronio on Sunday March 03, 2019 @08:52PM (#19298192)

There's many valid reasons for accumulating profits, such as planning buyouts or expansions. That being said, sometimes it can be done for reasons such as waiting for a preferable tax regime. Due to that, some countries have a separate accumulated earnings tax that is similar to individual wealth taxes to disincentivize accumulating without a business purpose.

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