I read her plan to tax businesses with $100m in profit is easily sidestepped by spinning off child-subsidiaries of your businesses right around that $100m mark and report back "womp womp, no over $100m profits here".
Either way the plan can be adjusted, as my sibling says, to include the revenue from subsidiaries so let's not be defeatist :)
None of them. You'll be doing business with Apple CustomerCare or whatever it's called, and they're going to pay license fees for some logo, software or what have you to those 595 companies. It's how Amazon & Co funnel their money out of Europe without hardly paying any taxes, too.
Besides, they typically already have dozens of subsidiaries that are largely invisible to most employees and business partners. This is just adding more reasons to do so.
(Source: have worked on subsidiary taxonomy of large companies before, not for tax purposes, and from the outside there is often little information, at face value, why these subsidiaries exist. Even if you asked them, it wouldn't be hard to come up with legal reasons.)
It could be illegal, but this isn't the same as comparing a few timestamps. You'd need to dive into WHY the subsidiaries exist to determine that they weren't "legal" structures.
> Even if you asked them, it wouldn't be hard to come up with legal reasons
And as I said, they might be! There are probably many reasons to split up an organization that aren't CURRENTLY worth the effort. But this suddenly makes it worth the effort and they already have the justification.
The details of what these justifications are can be interesting, but are largely specific to each entity. Here is one general example: if you have a business presence in every state, boom, 50 subsidiaries already there. Come up with a few other bogus reasons and you can easily rack up entirely legal subsidiaries that on the surface, seem like intelligent organizational choices.
See, we can play this game all day.
The fundamental point is this: just because people might break a law (directly or in spirit) is not an argument against having said law.
In other words, if you try to do multiple $9999.00 transfers in an attempt to "fly under the radar" - you will be caught out.
A business buying from another business can reclaim the VAT.
The end usually consumer cannot.
VAT is a consumption tax.
By your logic you could reason that eventually all tax is paid by consumers because they pay the companies for the products and that includes corporate income tax and so on but whenever sales tax is low you will find that companies are more than happy to absorb the surplus as profits.
VAT is the closest governments get to taxing businesses directly on their revenue streams.
How do you explain the fact that businesses can reclaim VAT they've paid, but consumers can't?
The only explanation is that VAT is a tax paid by consumers, not by businesses.
I'm not saying that there would be no effect, but it's not a complicated one.
>> and things carry on as normal otherwise
I don't think consumers will agree with you.
It's precisely how Dollar Trees and Dollar Generals have been pushing out grocery stores in the US right now, by not offering fresh produce, meat, or other traditional loss items. Planet Money even has a podcast on it: https://www.npr.org/sections/money/2019/04/26/717665452/epis...
Imagine the grocery store in your area carrying only frozen and canned meat and produce, because that is what it would push.
1) Business A has 1B in profits with X number of employees, gets taxed.
2) Business B splits into 10 businesses with 100M in profits and X/10 number of employees per business unit, and doesn't get taxes.