Explainer: What is a global minimum tax and what will it mean?
reuters.com
reuters.com
* the minimum corporate tax rate is 15%
* countries don't have to increase their corporate tax rate to 15%
* home countries can "top-up" until the effective tax rate is 15%
* Tax havens can still exist, but the incentive for multinational firms to move their profits to tax havens goes away because their home countries just top-up until effective tax rate is 15%.
Inversion prohibitions are suggested. Inversions happen when companies move to tax havens while keeping their management and substantial operations in their previous home country.
In this case the agreement calls for that AMT to be 15% or more.
Time for that to end.
So, governments don't have trillions in tax dollars a year to provide necessary services for citizens?
Billions more should radically change everything for the better, right? Clearly, that's just a modus ponens logic 101 right there. Yup.
The point of the sarcasm is to emphasize that if you already cannot do it with trillions then you certainly are not going to get it done with billions.
It's a simple argument that stands entirely on it's own.
You first need to provide convincing evidence to the contrary rather than just saying things like "imagine if we gave even more money to something that we already give money too ..."
Is HN devolving into 3-year old logic? I swear the last couple of years have been bad.
What I think we're seeing more broadly is the dissolution of the nation state into a single global administrative regime, and the inevitable consequence from a risk perspective is when you homogenize and correlate everyone under the same rules and criteria, it also fails as a single correlated entity, and this is why people and smaller countries should resist it in principle.
Do provide some sources or examples?
Instead, we have American companies like FAANG, Uber, etc claim they’re Irish/Dutch to avoid taxes globally.
Coercing other countries to have the tax rates that you wish is the same thing
Today, what do you do if you don't want to join society?
More broadly, what DO you want?
The freedom to do whatever i want. Societies don't really provide freedoms, they exist to curb them. Technology on the other hand is empowering individuals
This is the recipe that gets you communism / nazism / all kinds of single-minded societies. Do people forget that millions died for the freedom from such regimes?
Whenever I have had this conversation, people say "they would not let me leave" when they mean "they will not let me leave and start damaging our common resources". I think there is a gigantic difference between these two and the first is just wrong (I agree it would be terrible if it was true) while the second is a policy I would support. Am I missing something?
TLDR: Being able to leave is of fundamental importance to freedom and it is in no way forbidden by the imaginary global government that prompted this discussion. But when you leave you should stop expecting to have the benefits of that society.
In my country you can be the custodian of a mountain hut (some of them with plenty of amenities). Again there are some minor taxes to pay (not unreasonable given that they provide for the upkeep of the road to the hut), but again, living from an RV gets around that.
I guess the RV would require insurance too. So my examples do not fulfill a fundamentalist interpretation of your requirements, but it seems to me it fullfils the most important features (being left 99% alone, with 1% minor inconveniences). As I mentioned, the fact that the government would go after you if you damage the commons (e.g. hunt endangered species) is a feature, not a bug.
Does this at least fulfill the spirit of your question?
The aspiration above seems to be assuming as a premise, without argument or evidence, that a global government is not just a necessary condition for a post-scarcity Utopia, but a guaranteed means of reaching such a goal.
Given the magnitude of such a step, and in the light of the appalling outcomes of past attempts to create world empires, along with the level of coercion and misdirection required, notably in dealing with the inevitable dissidents, I would imagine such a premise ought to be subject to very careful scrutiny before it can be simply assumed. One cannot simply reverse the burden of proof!
Sure, the EU, for instance, fails at that utopic view for now, because of how byzantine and convoluted its attempt at democracy is. But we are getting there and might even succeed, especially given that we have never before had access to today's "almost post scarcity" technology.
But yes, you are right that it is not a guarantee. But it seems like one of the worthiest goals we can have.
In fact, I'm quite curious what the connection is between global governance and post-scarcity at all. How does scarcity prevent global governance? How does abundance require it? How is it helped by abundance? Surely abundance would do the opposite: it seems to me this would amplify the desire for self-determination on ever smaller scales which seems to be at odds with global governance.
I don't even think people will like the result. Surely the end result of an abundant society is 99% of people sitting in a room with Youtube + Netflix + Caviar and alcohol from the replicator. I'm sure they'll want to go for a walk every now and then but interaction between people will die off a LOT more than it already has. I of course can't be sure but I think people living such lives will have a very bad reaction to any attempt at governance.
> I don't even think people will like the result. Surely the end result of an abundant society is 99% of people sitting in a room with Youtube + Netflix + Caviar and alcohol from the replicator
History seems to point to the exact opposite: much (not all) of scientific progress is driven by the privileged few that have their needs taken care off. Most (not all) scientists and scholars up until recently were of privileged background. Nor are the children of the rich today just living the lonely life of hedonism you suggest.
But yes, some have hobbies. 1 in 1000 or so has useful hobbies, and there have been historical time periods where that really mattered.
The main problem with removing boundaries and autonomy, whether this happens on a small scale such as a family group, or on a global scale, is that the very worst actors and ideas no longer face obstacles to their influence, there is no means of escaping them, and no better alternatives by which to judge them. It creates a race to the bottom.
Claiming sovereignty to take registration fees from multinationals that want to obfuscate their financials is just absurd. This is just blatant financial shenanigans:
https://www.gov.bm/38865/google-bermuda-limited-thomas-hutch...
https://www.gov.bm/18571/general-electric-bermuda-ltd-marcel...
https://www.gov.bm/30983/caterpillar-bermuda-holding-company...
That is called out early in the article: that issue has blocked progress* on this issue until now but the financial impact of the pandemic (greater calls on governments as “insurers of last resort” and greater profits at the top of the power law distribution) plus changes in governments has created a different environment.
* “progress” in the sense of forward motion; not using the word in any political sense.
Whether this is good policy imposed on poor countries by rich countries is a great question. But that has little to do with the premise you suggest.
The trend toward coordination has been almost exclusively on matters of trade/monetary policy, with the power being consolidated in supra-national organizations and broad trade agreements. It seems safe to consolidate power in this area, so long as nations are weary of these institutions (given that all institutions tend to develop a kind of will to grow in power and scope) and, of course, as long as nations are able to unilaterally opt out.
But even as this consolidation of economic power has occurred, there has been no trend of consolidation of general governmental power. In fact, the opposite has occurred. The number of distinct nations has increased by ~10% since the 80's (from (roughly) 188 [1] to 206 [2], though the definitions are a bit fuzzy). The proportion of elective/representative governments has also risen dramatically.[3]
So there is no trend toward centralized/authoritarian governance. The general trend has been in the direction of smaller, more representative governance. The trend of economic coordination has merely nibbled away at some aspects of national governmental autonomy, and only the consent of those governments and their people.
In my mind, these two trends have us headed toward a marvelous future; one where supra-national institutions facilitate economic integration, and cumbersome national governments give way to modern states which are smaller, more accountable, and more democratic.
[1] https://en.wikipedia.org/wiki/List_of_sovereign_states_in_th... [2] https://en.wikipedia.org/wiki/List_of_sovereign_states [3] https://www.pewresearch.org/fact-tank/2019/05/14/more-than-h...
The working class shouldn't be subsidizing large corporations.
Totally agreed. This is exactly why HN’s constant support for corporate tax avoidance confuses me. Most HNers live in high CoL countries, where corps do not pay their share of taxes. This leads to the same HNers paying more taxes to support their country. Truly hilarious!
I also wonder about the laffer curve, where sometimes higher taxes might lead to lower tax revenue and vice versa.
Corporations aren't magic money trees. It's like damming a river, you don't get magic free water and get to send water downstream too. Dams have lots of downsides in return for controlling flow.
* Higher taxes does not mean companies will attempt to output less revenue.
Why would companies work /less/? Do HNers work less or ask for lower salaries due to being in higher tax brackets?
I strongly recommend starting a company and trying to sell something if you truly want an answer to your question.
Corporations aren't also a zero sum game. More taxes could mean more profit. Make the whole pie bigger an all that.
I would love to live in a universe where higher taxes somehow magically gives more profit.
What would stop companies to record losses by buying “consulting services” in from companies in third countries with lower tax rates?
The corporations end up distributing the money to stakeholders who then owe taxes on it.
What would happen if corporate tax rates were 0% because ... they aren’t really people after all?
Double taxation happens a lot. I don't think it's a good rule for determining if a tax is fair.
I do wonder how long it takes for a dollar to be 100% taxed as it is exchanged. Transactional taxes certainly give government incentive to stoke consumption as the faster the dollar is exchanging hands the more tax revenue they are collecting.
I’m not railing against taxes here. Just curious how long it takes the government to completely reconsider each dollar put into circulation.
Further, don't forget that while the IRS knows exactly how much you have made - they still require you to figure it out at the end of the year and then in all likelihood pay more taxes than what was taxed.
In scandanavian countries - their taxes are high - but at least the system is simple; they send you a summary of what you made, what you were taxed and you basically just sign it (according to some friends from there - I do not have first hand knowledge of how its actually done in Sweden/Norway/Finland)
Which scenario?
To be clear, I agree that the IRS’s guessing game system is ridiculous. I’d much prefer the Scandinavian system. But I’m not clear on what that has to do with double taxation, seeing how those countries do it as well (via VAT or any discretionary tax.) No country can accurately tax you ahead of time on discretionary spending, and I don’t believe any does.
Why are their taxes on every single transaction?
So what service are you actually paying for besides just... Getting taxed by the IRS?
In particular, things tend to be set up so that for small companies it doesn't make much difference whether the owner takes money out by paying themselves a salary or a dividend.