Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

IIRC US corporate income tax rates are fairly high compared to the rest of the world (although maybe there's more deductions and other shenanigans)

Or, better yet, proper sliding consumption taxes. If you want a yacht or private jet, pay 150% in taxes.

Norway already taxes luxury cars at over 100% of their value.

When you have an agenda that wants to spend an additional $6tillion do you really care that much about tax revenues? (On top of the $5 trillion from the past year) At that point does it really matter how much you collect? You’ve clearly given up all semblance of trying to balance a budget.

At this point we’re pretty deep in the new-age progressive economic policy ideology, where taxes aren’t about building up gov coffers but rather taking money out of the economy, so does it really matter how the money is taken out? Why are you so concerned with taxing corporations when it’s much easier to tax people?

Two: the US is actively working on what it is calling a global minimum corporate tax

Three: anonymous shell companies were made illegal in the US in January

It seems your comment is rather uninformed. There is of course much to do but it is hard to look at what is happening and come to the conclusion that it is all nothing

The most a single company spent on lobbying last year was Facebook at $19.7 million, which is a whopping .17% of their marketing expenses. At the same time, they shelled out $130 million, forming a irrevocable trust to fund a supreme court of moderation decisions. If lobbying were really effective, Facebook would have given money to any Congressperson willing to make any decisions at all, regardless of whether they are pro or anti-censorship. Either way, it's a win for Facebook because they can deflect all blame to the new regulations. The less Zuck has to think about moderation, the more he can focus on making money. The problem is that no representative was ever willing to do so. During the hearings about Section 230, Congress loved to grill Facebook on why they shouldn't have censored this and should censor this other thing. However, none of them attempted meaningful questioning that would aid them in writing a bill to achieve their supposed goals.

The real reason Congress is so ineffective is much more mundane: they have no incentive to do otherwise. Voters love hearing spicy soundbytes, so that's where all Congresspeople's effort goes into. People just want a simple problem that they can point their fingers at and knock down, but the real world doesn't work that way. When you blamed "lobbying", did you bother to look up the myriad existing regulations and their shortcomings? The result of all this is that an increasing number of real decisions are being made by unelected officials, from the SCOTUS effectively legislating Google v. Oracle or the Federal Reserve's increasingly aggressive monetary policy.

Spending money on lobbyists is not corruption. Is the ACLU corrupting Congress through its lobbying?

> 88% of the cost of the US Fed gov is paid for by taxes by workers (income taxes). Less than 12% comes from all corp/business taxes combined with capital gains (taxing the rich 1%). Business shifting tax burden to workers is a massive scale problem. $3.5 Trillion = US Tax Revenues (2019) and 88% came from workers.

This is meaningless. You need to look at something called "fiscal pressure". If you remove employees taxes and increase corporate taxes, what you'll probably get is lower salaries. {https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...}

tl;dr: Taxes are a political topic when they should be a scientific one.

If you are feeling masochistic then I highly recommend these two books. 1. Moneyland [1] 2. Treasure Islands [2]

One can set up corporate structures in a way that will make those looking for the real owner stuck in an infinite loop spread across the globe.

[1] https://www.theguardian.com/books/2018/sep/07/moneyland-oliv...

[2] https://www.goodreads.com/book/show/10197857-treasure-island...

How is political capitulation by the masses exceptional?

Covid offered a perfect opportunity for info workers to show solidarity with on-site workers by not opening those laptops at home.

But really it’s the leopards fault they keep eating our faces because we refuse to build a cage (higher taxation, breaking up monopoly).

The solution is not new either as we just went through it in recent memory with ATT.

I’m rather tired of the general public pointing fingers at everyone but themselves.

Stop going to the jobs they offer. It’s our agency not theirs. Demand they respect it.

The tax benefits are there to incentivize philanthropic giving. Society benefits from their giving and they receive a tax benefit and PR boost in return. It's not like they're saving more money total by giving it away. And sure, it'd be nice if philanthropists were super humble and anonymous, but the money helps either way, and I don't think those who are helped by the giving care if the givers have a statue of themselves up somewhere.

Buying stock options is a great example of where you might end up with a fixed tax break.

Buy 1000 options at your strike price ex: $1, pay tax on their current estimated value (say the value is estimated at $100, you pay tax on (100 - 1) * 1000 = $99,000 of "value" that you gained, probably about 20k).

2 years later: Boom, company goes out of business. That stock valued at 99k was actually worth 0k, but you paid taxes on 99k.

So now you can write off approximately $3,500 (for this case) in taxes every year until you've written off that 20k you paid in taxes - about 6 years in this case.

Has absolutely zilch to do with how much your P&L are. Those will still influence your final tax bill, of course, but they don't touch the break.

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Now - this case is not "avoidance" since you've paid the tax and are getting it back, but there are a lot of similar breaks related to loans, and the interest you're paying on loans - especially if the thing you're using that loan for is also taxed.

So it's VERY possible that Uber has generated a $1 billion tax break every year through loan shenanigans. That doesn't mean that they won't pay taxes, it just means the yearly bill will be 1 billion lower than it probably ought to have been.

> increase capital gains tax to equal income tax

Is far easier said than done. For example, would you include the $250K capital gains deduction for selling a home in that? Additionally, you're probably referring to raising long-term capital gains tax, but that has the side effect of disincentivizing long-term investment in favor of more short-term speculation.

In fact, I would rather income tax for individuals also be done away with. Just tax every transaction in the market. That is much fairer and presents less avenues to avoid tax.

It would also become more important to enforce taxation on corporate benefits. If a company provides a car, jet, mansion etc for an executive's personal use, then they need to put a monetary value on that usage and tax it as income. It's not that it's impossible to do that, but it's an additional hurdle for enforcement. Not only do you have to confirm that the company provided the employee X benefit, but you also have to confirm that they valued it appropriately.

Finally, it's just not good politics. It's really hard to sell a plan like this to voters. Even if it doesn't raise the taxes of the average voter, it sounds like you're moving the burden of taxation from rich companies onto the average citizen.

I think there's a lot of economists who love the idea because it really does simplify things. Besides the framing, there's not really a big difference between subsidies or tax breaks. But that third point is probably what kills it.

IMHO the consultants and lobbyists benefit from such convulted loopholes .

These setups are only possible for large consultants to deliver for large consultants and policy makers have plausible deniability when there is no obvious loopholes and benefit from lobbying perks , revoking doors, election donations if not outright corruption.

Also for those who are better versed with law, is it possible that companies can legally defend actions like this by arguing they are maximizing shareholder legally and thus, they are obligated to do so?

An example I'm quite familiar with; the Ferrari Formula 1 team used an engine in (at least) 2019, and possibly earlier too, that had momentary higher fuel flow than allowed by the regulations. The regulations were very clear that at no time the flow was to be larger than 100 kg per hour.

The hurdle: enforcing the fuel flow into an engine, running at 12,000 RPM, is hard when you're not the one building it. So the FIA, the governing body, commissioned a fuel flow device that would sit in the fuel line between the tank and the engine, and measure the throughput. The flow was/is measured almost 5,000 times per second.

Ferrari found out how it worked, and simply produced higher throughput when the fuel flow monitor wasn't reading the flow. Entirely genius but highly illegal. Between 2019 and 2020 they were found out, and for the 2020 season they were considerably slower because their engine was designed to use the fuel flow workaround.

TL;DR: even perfectly designed regulations can have problems when it comes to figuring out if something is being broken. In this example, Ferrari got off without a penalty because they in turn helped the governing body figure out a way to catch anyone doing the same thing. This rule break was suspected by competitors and fans alike for the best part of the 2019 series. It wasn't an out-of-the-blue shock. Figuring out what exactly is being done illegally is just not that easy in large, opaque systems.

The tax laws allow this. Preventing it requires changing the law. If a government complains about this problem but doesn't try to change the law, then it's reasonable to ask if the government is truly serious about doing anything.

However, it's also true that this a difficult problem for governments to solve. Consider a company that has a head office in the US and factories in Indonesia, selling to customers in Europe and the US. Where should the corporate profits be taxed? Without the customers, there is no profit. Without the factories, there is no profit. Without the head office directing the whole thing, there is no profit. Which governments are entitled to a share of that? If the Indonesian subsidiary is "selling" the goods to the European and US branches and turning a profit, and the head office is "selling" its management services to both and turning a profit, and the retail arms are making profits on sales to end customers, then there might be taxes to pay in each jurisdiciton.

Now move the head office to a tax haven, and have the subsidiary units pay hefty IP licensing fees to the parent company - it seems that there are no taxable profits anywhere!

This seems obviously bad, but the amount of work involved in crafting a set of rules which prevent this is hard. Either there is a global corporate tax rate such that this kind of profit-shifting no longer makes sense, or there is some system for distinguishing between illegitimate profit-shifting (to a tax haven) and legitimate profit-shifting (profits accumulating with the parent company in the US rather than in the subsidiaries). Of course, perhaps the latter isn't legitimate either! European governments worried about FANG companies would be no happier if FANG paid heavy corporate taxes in the US if they continued to pay very little corporate tax in Europe, for instance.

So, I think government complaints about this are of the "this is too difficult for us to figure out and get international consensus on", so they resort to a kind of moral shaming, rather like the local priest shaming the town's wealthiest individuals for refusing to pay for repairs to the church roof.

Let's walk down this rabbit hole:

So you want to tax corporate profits. Well, trouble is, it's easy to hide profits. For example, interest payments are subtracted from profits, which allows investors to lend money to corporations as loans, and the interest is only taxed by the recipient, but if you lend money to the corporation by purchasing equity, that is taxed twice. This asymmetric tax treatment incentivizes taking on debt and thus financial fragility and short-term thinking. OK, you say, let's treat interest and dividends the same. Then you have this issue with massive executive compensation, which is untaxed as it is treated as an expense. You'd like for that to not be tax-exempt as well. Thus you decide to tax value add -- that is revenue net of your cost of goods. That way, you catch cheaters, since if corp A reports something as a cost (payment to B), then B better record it as a revenue. B can't hide. Except now comes the foreign sector. What if B is a foreign company? There's the rub. One option is to say the foreign company also has to pay you taxes based on what it sells to A. This would effectively put an end to all the shell company shenanigans. To be fair, you can give credit for income paid to other jurisdictions so you don't end up double-taxing (like we do), but that's minor. So now you are happy with your system. You survey the landscape and what have you accomplished? A sales tax! This is just a value added tax, or VAT, which is another form of sales tax. But sales tax is regressive! And very unpopular. So there is this problem where Americans don't want a national sales tax of, say 20%, but they do want a corporate profit tax of, say 40%. And they are really angry when they see the effective corporate tax being so low, say 5%.

This reveals a cold truth, which is that corporations are effectively pass through entities for the human owners of the corporations. So why tax them twice? Well, because we have so many tax loopholes and such large trade deficits that 40% of our corporations are owned by foreigners that don't pay US taxes and 40% are owned by pension funds and tax-advantaged retirement accounts so that only 20% of US equities are subject to any tax at all. So this thrashing around about corporations reveals yet another uncomfortable truth, which is that our massive outsourcing has resulted in an erosion of the tax base just as much as it has destroyed middle class jobs.

This brings us back to a new variant of the old trilema, which is that you can't have free flow of capital (or equivalently, trade) across borders, a floating currency, and your own interest rate policy.

You can only have two of these. Except the tax version of this is that you can't have free flow of capital (that is trade), a floating currency, and your own corporate tax policy. The best you can do is a national sales tax for goods sold to your own citizens. If you try to tax corporations, you will run into the two-headed hydra that your corporations are owned by overseas investors and that your corporations have set up overseas businesses that sell them valuable inputs, so valuable that all the value is routed overseas.

So what happens is people create a tax policy that tries to also avoid tariffs on trade and foreign capital flows, and then they are shocked when corporations arbitrage that away.

This replaced a higher rate on US net income and global net income that lands in the US.

Het is toch echt andersom. Nederland doet dit al jaren om in de ‘good graces’ van Amerika te zijn.

Are you surprised when you see this news?

And if not, then why is it not stopped? It is not exactly a poor county, that has no choice but to let things like this happen for some dirty dollars on the side. It should not be too difficult to at least catch the biggest fish playing this game.

Gotta give credit to travis, we all appreciate respect for traditions

You would shift the gaming of system from happening on the net income level to gaming of the system happening on the revenue level.

You can play games with the European and American systems since their rules are slow to change and predictable.

You cannot play games with China. They will kill your business and access to their market on a whim, and will send your Chinese employees and their families to labor camps (I’m not exaggerating, this has happened a lot).

Hence why Apple is forced to look like a massive hypocrite whenever they talk about privacy, because they have no such protections for their users in China.