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Comment by kjrose | Hacker News Reader

I would love to hear how they intend to enforce such a global minimum tax rate. As well how they would guarantee that no country offers a tax credit or otherwise to lower the numbers.

And then, of course, there's the really common trick of keepin profits on the books near zero for a corporation to avoid taxes altogether. Would they suddenly be taxing income and not profit?

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> As well how they would guarantee that no country offers a tax credit or otherwise to lower the numbers

Never mind the international angle, what about the US states and localities offering business tax incentives to attract corporations?

Like Delaware, the scumbag state - a tax haven

How is Delaware a tax haven?

https://www.theatlantic.com/business/archive/2016/10/dont-bl...

> Delaware doesn’t tax “intangible assets,” and this encourages companies to move parts of their business to Delaware to avoid taxes in other states. This has led to Delaware being labeled a “tax haven.”

I don't get it. I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?

> I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?

Company transfers intangible asset to subsidiary in Delaware, "trademark or naming rights"[0], its locations elsewhere pay the Delaware subsidiary for the use of those rights, lowering their profits(?), and the Delaware subsidiary doesn't have to pay tax on that income and resulting profit?

[0] https://www.theatlantic.com/business/archive/2016/10/dont-bl...

That'd make sense if delaware had a low corporate tax rate, but it doesn't[1]. If you wanted to relocate your profits to a low tax jurisdiction, you'd want something like north carolina (2.5%) not delaware (8.7%).

[1] https://taxfoundation.org/state-corporate-income-tax-rates-b...

...because [under the "loophole" / arrangement we're discussing] Delaware doesn't tax (any of!) the income from those intangible assets[0]?

https://udel.edu/~pollack/Downloaded%20SDP%20articles,%20etc...

> if delaware had a low corporate tax rate

Hard to set the corporation tax rate (for income on intangible assets) any lower than zero.

Sanctions on non-compliannt countries.

This strikes me as incredibly imperialistic. Why should the USA get to decide what the tax rate is for the rest of the world?

Start with multilateral agreements, then sanction small jurisdictions that don't comply (e.g. bring the EU, US, Japan, etc on board and negotiate conditions, then impose them on Cayman Islands or Panama).

Those multinationals are following USA tax law! Why sanction the small country when your own country enables the action?

Yes, that is precisely my point.

You seem to think this will be a hard sell to most countries, where in fact 21% is below Corp Tax for most countries with clout. Most of the EU would be on board, China would be on board, all nuclear powers would be on board...

I doubt either China or Russia would be on board, They might though they would properly ignore it and have many exemptions for State Run businesses or or such things

It shouldn't but it arguably has the diplomatic and economic power to do so.

So every city with tax credits. Every county with a tax benefit.

Taxes is not just a federal thing here.

> there's the really common trick of keepin profits on the books near zero for a corporation to avoid taxes altogether.

https://slate.com/business/2012/07/xerox-parc-and-bell-labs-...

> The thing about this is that we ought to understand both PARC and its East Coast friend Bell Labs as in important respects outgrowth of the high marginal tax rates prevailing in postwar America. These were, lets recall, very high rates.

Replace income tax with the sales tax.

Honestly, a good VAT is far more useful than a corporate tax imo.

Yeah, especially considering the fact that Russia and China are ditching the dollar. No one cares what America has to say anymore.

You think the US throws it’s weigh around wait until you start using the RMB!

If recent experience with America’s unilateral application of FATCA on the rest of the world, (effectively imposing massive compliance costs on other countries’ banking systems to help them find non-compliant Americans and bring in revenue equal to maybe 1/100th of the worldwide compliance costs) and how literally no country put up resistance to this imposition, I’d say everyone still cares what America has to say!

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