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Comment by ajsnigrutin | Hacker News Reader

I mean.. there are other factors in play too.

How much tax does a mom-and-pop (book)store pay, compared to eg. amazon (relative to size, income and profits)?

I live in a country that was once communist, and we still get a lot of very left leaning parties (literally with a red star in the logo), who always mention "tax the rich", but the effect of any such measure is, that poor people still pay (almost) zero taxes, rich people earn enough to make it worth it to avoid taxes (open a company in a tax haven country, move money around,...), and the middle class (engineers, developers, etc.) gets fucked.

Can't we first fix the tax laws, so that amazon would pay the same effective tax rate as smaller stores do? And then do the same for Bezos personally compared to a regular worker.

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not really? taxes aren't about getting hurt equally, they are about being a passive revenue source for the country, amongst the other revenue sources. the user experience isn't really a factor and it doesn't make sense to give the overleveraged mismanaged country extra money that is just going to use the taxes to make its interest payments, just so people feel its like they're getting screwed equally.

if you spend more than you make that year, then it reduces what you have to pay in taxes. people with savings that far exceed what they earn that year, that they actually spend towards something revenue producing, will not pay taxes on what they earn. if you have outside capital that you spend, and that exceeds your earnings that year, then you have no tax to pay. smaller participants can operate this way too. if they don't have capital and are barely making ends meet by spending what they earn on consumptive things (even if necessary) then they have taxes on what they earn. this is the same for larger organizations if they chose to operate that way. not everyone has access to capital, or savings, or willingness or the risk profile to use their savings towards additional growth. but if you do take the risk, then thats the reward.

> if you spend more than you make that year

Yes, sure.

But if you start another company in eg. cayman islands, then transfer your patents to that company, then that company charges you fees for those patents, and you earn zero on paper in your home country, and a lot in a country with very low taxes, you avoided the taxes in your main country. This is something large companies can afford to avoid paying the same tax rates as smaller ones do, while using the same (or even more) of the infrastructure that is paid by those taxes.

yes, that also happens. this is one area that the US makes extremely difficult for its tax persons, and even large US companies can only do these economically unsubstantive transactions on their offshore earnings (unless it relies on lying).

So there is a lot that other countries can try to legislate where the Double Irish With a Dutch Sandwich and other permutations have limited efficacy.

from your country's perspective, I don't know.

The US may make tax avoidance difficult for its persons but it certainly doesn't have a problem facilitating it for non US entities.

very true! its more like it bullies everyone into having capital within the US

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