Re:Running a Business With Staff Scattered Around the World
by netcan on Thursday September 06, 2012 @07:37AM
(#4483704)
One thing I'm curious about recently is implications for tax regimes. For example, the Argentinian employees decide to work from Costa Rica.
One type of tax is like Goods & services taxes. They are very hard to avoid. Tax makers can set these to whatever rate they want and have to deal mostly with simple economic effects (lower demand at the higher price point). They don't have to worry about "dynamic effects" where people just choose to purchase outside of the tax regime.
Another type of tax is corporate taxes, investment taxes, capital gains taxes & similar taxes. These "have legs". Tax makers do have to consider investment going elsewhere or corporate profit being accumulated elsewhere. Often lowering cooperate taxes can lead to higher totals because companies move in from higher tax regimes.
Income taxes are still much more like the first type but they are getting more like the second. They are tied to the job & the job is tied to a place. But.. as our culture, economy & the companies we work for get more globalized, differences between income tax regimes may become a bigger factor. If you pay $30k a year in income taxes and work from home this becomes paying $30k a year to live in a country.
I've spoken to several people lately that are considering taking such proposals to their employers. Let me work remotely so I can clear an extra $x0,000 per year. These are average income people, not millionaires.
Whatever the ideological disposition of a culture, many governments may be forced to survive on lower revenues. In Ireland for example, it seems that tax revenues reached a peek a few years ago. The current budget is milking lizards. There is no more tax revenue that can be raised without hitting a point of negative return. There is a sense that "recovery" will take a long time but I suspect the decline (at least as a % of GDP) may continue.
One type of tax is like Goods & services taxes. They are very hard to avoid. Tax makers can set these to whatever rate they want and have to deal mostly with simple economic effects (lower demand at the higher price point). They don't have to worry about "dynamic effects" where people just choose to purchase outside of the tax regime.
Another type of tax is corporate taxes, investment taxes, capital gains taxes & similar taxes. These "have legs". Tax makers do have to consider investment going elsewhere or corporate profit being accumulated elsewhere. Often lowering cooperate taxes can lead to higher totals because companies move in from higher tax regimes.
Income taxes are still much more like the first type but they are getting more like the second. They are tied to the job & the job is tied to a place. But.. as our culture, economy & the companies we work for get more globalized, differences between income tax regimes may become a bigger factor. If you pay $30k a year in income taxes and work from home this becomes paying $30k a year to live in a country.
I've spoken to several people lately that are considering taking such proposals to their employers. Let me work remotely so I can clear an extra $x0,000 per year. These are average income people, not millionaires.
Whatever the ideological disposition of a culture, many governments may be forced to survive on lower revenues. In Ireland for example, it seems that tax revenues reached a peek a few years ago. The current budget is milking lizards. There is no more tax revenue that can be raised without hitting a point of negative return. There is a sense that "recovery" will take a long time but I suspect the decline (at least as a % of GDP) may continue.