Facebook Tax Bill Over Ireland Move Could Cost $5B

That is how taxes work. The government introduces friction into economic transactions, which sucks up some amount of productivity from those who produce value, which the government can then use for its own ends. By moving to a country with more reasonable taxes, Facebook's economic interactions now have less friction and higher efficiency.

The UK was supposed to be excluding such companies.

I mean, if you're going to argue that corporate tax rates should be lower, just make that argument.

But the argument that corporations should be able to pay fewer taxes because they (and/or other corporations) lobbied to create a byzantine tax law that they then exploited is... a special kind of argument.

Taxing profit is taxing the reward (a delusion of money produced after all operations), which is what's suppose to justify it. But taxing growth is taxing the company itself (taxing the operations). Taxing shares or dividends would be taxing rewards.

Apple has generated a boatload of income tax and sales tax and capital gains tax, and these numbers are usually left out of corporate tax news pieces.

That said, Amazon being able to escape sales tax early was bad. Also individuals avoiding income tax through shell companies in tax havens is also bad. At least worse than global corporations escaping the US corporate tax...

That is a problem of the law being easier to circumvent if you've got resources to do so. From abusing how complicated the tax code is, to actively lobbying to pass laws that make it easy for you to do so. Simplifying the tax code, removing loopholes is one step, but that would require a total rewrite of it, which is a long process.

Corporate income tax is necessary in our society. Corporations use government built infrastructure, whether it is roads, copper cables, etc. They use government services and plethora of government funded things. It is absolutely normal they contribute back to society. Sadly, in an increasingly globalized world, it is much easier for a company to hide its profits in a fiscal paradise.

I think this is one reason why the system doesn't get reformed in general. The tax system's complexity gives a competitive advantage to large corporations who then lobby the government to gain further advantages.

How would that work if a company isn't profitable? Sounds like taxing profit makes more sense, although I agree that it does give ambiguity. But then, it also allows the government to incentivize certain kinds of spending over others by allowing it to be counted (or not) towards the tax bill.

> If you really want you can tax companies' revenue (not profits).

That one doesn't really work.

Some industries are very low margin and capital intensive. There is, realistically, no level of revenue based tax that a supermarket chain can pay. Maaaaybe 1%. Max. Same goes for airlines, steel mills, and a thousand other old-school bricks and mortar industries where a lot of money may come in the door, but then in goes right back out again as a cost of doing business.

Other industries are very high margin, including a lot of tech businesses that were all familiar with. A 1% revenue tax would represent a massive decrease in their total tax bill, but if you charge them a more realistic tax rate you've bankrupted everything that's not a highly profitable tech company, which is basically your entire economy.

(Yes, they'll try to pass it on, but a supermarket chain isn't going to be able to pass on a 20% tax on revenue. They're already making no profits, paying crap wages, and bargaining their supliers down to the wire; the only thing they could do is raise prices 20%, and people who aren't working at the aforementioned high-margin tech companies can't remotely afford a 20% surcharge on their food bill with no offsetting changes to their tax or benefits. Plus, if that's actually the policy result you wanted...maybe just enact a 20% VAT?)

Of course, you could adjust the tax rate based on how capital intensive the industry is and how high your margins are at which point...it's a tax on profit again. :)

The more you dig into it, the more it becomes clear (in my view) that revenue based taxation isn't the right lever to pull. Whatever policy outcome you want can be more easily gained via other methods.

Figuring out how much a large company makes is complex, which is why we have a very complex system of rules and laws to let us calculate it. And according to those laws, Google, Facebook, etc. don't actually make hundreds of millions in profit in your country.

That's why they don't pay taxes, and it's what the linked article is about: Because your country (and mine) has passed laws which say that they aren't making money despite what your intuition tells you.

If you want to fix it, the starting point would be those laws. Except...we've been trying to improve those laws for a long, long time. Many are now many decades old. Transfer pricing rules exist for a reason; simply abolishing them would cause other problems and greater imbalances.

At some point maybe we need to step back and focus on taxing the consumption of real people (which is, in comparison, much easier). Facebook may be inherently hard to tax; but those profits flow into the pockets of real people, and they are (in comparison!) easy to tax.

May be American politicians should stop the war on drugs, wars in far off countries and medicare and reduce tax levels to 20%.

Facebook, Google, Apple and push the frontiers of human knowledge at rapid rate if they can spend that money themselves. In case of government it will be used to by some junk airforce planes that dont fly.

Ireland is 5m people. Just hang them out to dry. Either they consume as much as they add in value or their standard of living has to drop until this is held to be correct.

    > license the U.S.-made IP to that subsidiary for $0.
    > Boom the U.S. company now has no profits to show and
    > all profits are in the low-tax jurisdiction

I'd also add the caveat-- are you sure who is buying who here? The next President has some power to make Wall Street's life difficult. I suspect that the donations that Wall Street gives is more of a Clinton-shake-down than it is a bribe from Wall Street.

Additionally, these analyses simply group individual donations in with whatever company the individual works at. Does this mean that the company I work for is schemeing to make /R(?:on|and) Paul/ president? Hell no. It's the individual's money to donate, and just because they have a successful career in the finance industry their political donations come into question. Do you have any idea how insulting you're being to the true Clinton supporters who work in finance?

It just feels very conspiratorial and small-minded. With a dash of wealth envy.

IDK. I could easily be accused of being a shill, but I've never heard a solid argument presented from your camp. It's always "look at this coincidence!! What else could it mean?!?!"

1. What if you can't ? You have your budget that can't go lower.

2. And what if it employs 100 000 people in your country? Good luck with that.

3. You know what costs are ? Because they can have 0 earning in your country when mother company will take all for licensing.