> If they wanted to head this off all they had to do was pay a reasonable amount of tax in the country where the revenue was generated
Like a donation? Or are these companies evading tax laws?
Like a donation? Or are these companies evading tax laws?
I do not understand the concept of expecting an entity to pay taxes they are not liable for paying.
The incentive for a big country like the US is to make these companies pay their domestically accrued taxes, but the incentive for a small country like Ireland is to attract these companies to come open offices and do business locally at all.
These companies have tricks to avoid paying taxes, such as creating a parent company in Ireland that owns all of the intellectual property, then making the actual Apple or Google in the USA rent the intellectual property from that Irish parent for the cost of all of their revenue. Thus to the US company, they paid 100% of their revenue as the cost of doing business and have 0 tax. Then to the Irish company, they can essentially launder this revenue into being almost completely tax-free.
For the record, the "Double Dutch Irish" has been closed, but there will always be another Caribbean country or looked-over European country willing to offer major benefits to a multinational in exchange for an office and some local hires. After all, why should a small country care if a multinational isn't paying taxes to another country far away?
Why is the country that wants taxes not able to change their rules to collect something similar to an excise tax?
The necessary solution is obviously systemic change rather than asking large companies to pay above what they're required to, the latter would actually be a breach of their agency duty and anyone who thinks companies should do that are foolish.
I don't know what the solution is. Perhaps abolishing company tax, which is my favorite proposal. Perhaps a worldwide company tax as Biden is pushing for (which concerns me for other reasons, even though I do admit it would solve this specific problem).
Hence the question of why are countries not changing the rules so the large multinational companies cannot achieve it.
> As an analogy, it'd be like a road worker paying 30 percent tax on a $100k income and a company CEO paying 0-5 percent tax on a $10m income.
This seems unrelated to my question, but is there anywhere that this is true? All the examples of this I am familiar with in the US involve ignoring the fact that the CEO is not getting $10m of cash income, otherwise they would be paying a lot more tax than someone with $100k cash income. Which is stupid and invalidates any point trying to be made.
If the argument is that society needs to start collecting tax on wealth and forcing sales of assets, then so be it, but it should be stated as such.
"Hence the question of why are countries not changing the rules so the large multinational companies cannot achieve it."
"but is there anywhere that this is true?"
"If the argument is that society needs to start collecting tax on wealth and forcing sales of assets, then so be it, but it should be stated as such."
Reinvesting earnings is a strategy available to all corporations, large and small.
Corporate income tax is not in any way shape or form regressive.
Crazily innumerate reporting on taxes paid by big corporations leads people to believe straight up false things about taxation.
A) find another similar system
B) put their internal bureaucracies at work to switch the entire corporation to the new system?
It's like stock market news, by the time it's in the newspaper it's much too late, all the insiders have finished their trades and you're the chump buying overpriced stuff.
We'll probably find out the 2021 latest scheme in 2031, when it gets banned.