> If I was trying to invent some “fair taxation scheme” I’d tax the profit based on the revenue in that country.

Why is that fair? In your example, if UK provided 100% of the labor shouldn’t UK get 100% of the tax to support social programs for that 100% labor?

Labor seems a better way to distribute and incentivize employment.

It’s “fair” only in that it’s understandable and somewhat enforcacble (and not possible to avoid with loopholes).

It’s not fair in the sense that the right countries necessarily get the tax money - but it’s certainly more likely than it is today.

It’s not fair in that it guarantees businesses aren’t taxed too much or too little, but it does guarantee that the profits are taxed somewhere which ends the incentive to shift the profits around.

Perhaps “fair” is the wrong word. I mean “fair” as in hard to evade overall, not fair distribution.

> if UK provided 100% of the labor shouldn’t UK get 100% of the tax to support social programs for that 100% labor?

The UK gets 100% already from the income tax for their workers.

This seems to just scream "outsource to low or no tax developing nation".

Not really because its extremely exploitable. Revenue is not - it DOES come from someone somewhere - its traceable.

Work effort could be distorted in whatever fashion the country wants. They could declare all their work is done in some off shore 0% tax nation and pay nothing.

That would have different tax results depending on whether or not it was operating under a reseller model, where the reseller is the one importing the item.

Then there is little or no revenue local to France.

What if France has complex rules and extra regulations that bring the profit from the country to just 1 percent, compared to ~10% on global operations. With your logic you will tax the subsidiary way more than 100%.

If you're trying to do fair taxation do away with "profit" taxes entirely. Not like any of us plebs get to dodge taxes by spending our income. Subtract what the company spends on salaries from its total revenue and then charge them 20-30 percent of the remainder just like the rest of us pay. "Corporations are people" after all. Toss in a seven percent sales tax on all stock purchases.

That would instantly bankrupt every single company in the many industries with single-digit profit margins.

I would personally be in favor of a ~5% flat tax on corporate revenue across the board if it meant replacing the convoluted profit-based tax schemes that currently exist. The costs of compliance and "tax minimization" are already a couple percent of revenue for many companies, so replacing that cost seems very reasonable.

That were adversely affect new businesses and discourage competition for well-entrenched businesses. The net results is that it would handicap growth.

Consequently, it’s a terrible idea.

Why do you think that?

If anything bigger buisnesses have more ressources to avoid taxes. - Thus having everyone pay the same would lead to large companies paying more than they do now and small companies would be barely affected.

True. Proposal of parent could be made more realistic by making sure only few things like bill of materials, resale items and personnel costs can be deducted. Companies already keep track of all these things.

You will have to go after financialization tricks, where healthy companies get loaded with debt, weird tricks with assets and all the stuff the finance industry comes up with that has nothing to do with core function of the company. Now imagine the powerful lobby you have to work against.

Yup, gets pretty complicated. Seems like it'd be easier to forget about corporate tax, and charge income tax on every dollar going from the company to an individual.

Apparently some lobby found my little comment too. :)

Food for thought: in a distribution chain you will find lots of small value adds. Take sea ports, there are loads of companies that handle import of materials or products. The price they charge for their goods/services are dominated by their import costs.

> "Corporations are people" after all.

corporations aren't people, and I think you know this. "corporate personhood" means that a corporation has some (not all) of the rights held by individual people. it certainly does not mean that it makes sense to tax corporations as if they were humans that filed a W-2 each year.

what do you think would be solved by jacking up the corporate tax rate specifically? or put differently, whose pocket do you imagine this money comes out of?

the owners are already taxed on any income or capital gains they derive from ownership, employee pay is taxed on both sides, and retail customers pay sales tax. none of those taxes are necessarily optimal, but their impact is at least better understood than corporate tax.

I think op might be talking about Mitt Romney saying corporations are people.

Get rid of income taxation altogether and replace it with land value taxes.

Maybe this is obvious to people that do accounting for multinationals, but it's not clear to me how you even establish that 10% of the revenue was in France.

If a global company like Google pays a global company like Apple $K billion to be the default search engine on iphones, should Apple consider that revenue to be all in the US because Google is headquartered in the US even though it's purchasing something that will apply to people in lots of countries? Does it matter if Google uses local corporations in a number of companies to each pay Apple? If Google pays through its subsidiary in the jurisdiction with the highest corporate taxes, can it force Apple to realize revenue there?

a "simple" solution would be requiring companies to set up legal entities/subsidiaries into the countries they make above xx millions of revenue, getting taxed at the local level, keeping simultaneously things simple for small companies which may sell across borders.