Amazon and Starbucks pay less tax than sausage stall, says Austria

And maybe they overtax those sausage stalls, lots of/most every? country has tax regimes with lots of insanity. Apple wouldn't be playing the games it plays with the US if we didn't have the 2nd highest or so corporate tax rate in the world (e.g. see https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates when you factor in state tax rates only Cameroon is perhaps higher).

While I was doing the search for that, I noted that as a region Europe has the lowest, but that's no doubt not accounting for VATs, which the US is allergic to, at least unless one of the big other categories of taxes is totally killed off (like, with a "this time we mean it" Constitutional amendment).

Anyway, my point is that all this results in all sorts of distortions. For example, when the Reagan individual tax rate cuts kicked in, I noticed my parent's business and investing strategies change as tax avoidance became much less important. In his working lifetime, the top rates went from 91% ("We Like Ike???") to 70% (which as I recall was split between 50% or more for "earned" and 70% or more for "unearned" (investment) income), to 38.5%, to 28%, before it started going up again (even the George W Bush tax rate cuts only dropped them 4.6% to 35%).

And going back to the distortions, the family exemptions allowed a normal family prior to JFK's 1964 supply side rate cuts to survive with the lowest bracket being 20%; those weren't adjusted for inflation until Reagan's reforms, which turned them into a pretty minor thing with how inflation savaged the dollar during that long period (the CPI peaked at like 13-14% around the time Reagan entered the Oval Office).

Now all the profit is offshore. Everybody happy, except the Austrian government (who don't get corporate tax because the franchise hardly makes any profit in Austria) and sausage stands (who wonder if they could make more money if they join the Starbucks franchise)

[0]: http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-f...

The EU should have more statutory authority for laws like this just as in the case of the US Federal Government over State governments.

At any rate, don't blame Amazon, Starbucks, but rather blame wealthy governments that refuse to spend the money for talent that can fix the laws (or iteratively "refix" them).

Look at IKEA. They operate as a non-profit, but transfer money to a holding company which licenses the IKEA brand to the non-profit.

Countries simply need to hire very competent people to construct the laws. Their problems with taxes is one of market competition for intelligent people to write the laws with Amazon and Google who hire people to "legally" skirt the laws, often acting in "grey" areas and loopholes.

What is really not acceptable is that a small company will pay 1 or 2 order of magnitude more tax than the giant they directly compete against.

Corporations are legal persons, and income accruing to distinct legal persons is subject to tax. E.g. I get paid by my employer, and then pay tax on that. Then I pay my nanny with post-tax dollars, and she pays tax on that. That's not "double taxation"--just the nature of an income tax.

Imagine that instead of forming a corporation, a bunch of investors nominated Bob to be the legal entity in charge of the whole business. Bob held all the bank accounts, directly employed everyone, and booked all revenue minus his expenses as his income. A series of contractual arrangements required Bob to pay out the profits to the investors. Under that circumstance, there would be no doubt that profits would be taxed when they initially accrued to Bob, then again when he paid the investors.

It should be noted that nothing precludes companies from organizing as something other than a corporation. Partnership income, for example, is only taxed when it is received by a partner.

If someone in power is so stupid to do it, companies will stop operating on their country but the world will continue going around and tax heavens will continue existing.

Governments are bankrupt totally now, expending way more that what they earn, with 5% deficits or more and want to raise more and more money in taxes, but there is a limit on what they could extract, as people can stop working if they become slaves.

I wouldn't say there shouldn't be public infrastructure. For the last part, though, mightn't Facebook consider charging the company managing infrastructure for the ability of their customers to access Facebook? I think people would be a lot less likely to subscribe to an ISP that didn't facilitate access to Facebook.

There are plenty of Dutch online retailers (e.g. bol.com and coolblue.nl) but their prices are significantly higher (even factoring the slight difference in VAT). Considering we're supposed to be in a "single market", I've never been able to figure out why that is.

I live in Vienna, and I order a few orders from amazon every day. Last year I had over 600 amazon.de orders. Generally I try to order only Prime stuff.

The vast majority of orders (over 90%) come from Salzburg, Austria, although in a few occasions I even had same day shipping, those came from somewhere even closer.

From a US perspective, it's common for our top politicians, when talking about a problem, to present a specific proposal for legislation they would use to fix the problem. It makes their words more credible to me. It is easy to complain that things are bad, harder to describe in detail how things could be better. To be cynical, these plans are written by staffers and the politician may just memorize the key points. But it at least demonstrates there is some commitment to the issue.