Comment by mustafa_pasi | Hacker News Reader

Comment by mustafa_pasi | Hacker News Reader

This is a new kind of imperialism. The G7 makes up the rules, under the guise of fighting tax evasion or financing of terrorist activities. Then they make all the less powerful countries comply to those rules. If they do not, they get greylisted or blacklisted by some "international" watchdog, making it much harder for those countries to participate in the global economy. Of course only the poorer less influential countries will suffer under such arbitrary rules dictated by the G7. Nobody is going to greylist the US or Germany.

It is effectively a new mechanism for the G7 to encroach on the sovereignty of other countries.

And if you tell me, taxing international corporations is a good thing, I agree, but it is just a pretense. Just a setup. The G7 can also just tell those international corporations to fess up the money. They have enough influence to do just that. There is no reason to include Poland, Sri Lanka or Botwana or Bolivia in this agreement. The reason those countries are included is so that later on, the same agreement can be used to blackmail those countries.

It does seem like e.g. the US could impose this unilaterally. You, a company, have to make two tax returns: one on all the money you made here, and one on all the money you and/or your relevant "parent" corporation made elsewhere. Same rules to calculate taxes in both cases. On the latter return, you can subtract the sum of the taxes you paid elsewhere from the tax owed. The rest belongs to the US government.

At that point there'd be no point in a country offering cut-rate taxes to any corporation that does substantial business in the US, because taxes on any profit realized internationally will still be collected. It's just that the US is taking them rather than the country that's offering the cut-rate tax deal. So that country (Ireland or whoever) no longer benefits from having low corporate taxes, and they might as well have taxes at least as high as those in the US.

It seems like any sufficiently important country or union could impose a rule like this if they wanted to. There must be some facet of international law that prevents it, or some other complexity to the idea that I'm missing.

I’m neither a lawyer nor an accountant but I’d expect it to run counter to all existing double taxation agreements. All those agreement would have to be cancelled or renegotiated - that’s a lot of work.

Why? The parent suggested to discount the tax paid abroad from the taxes to be paid in the US. It is the double-taxation prevention agreement.

Me being a cynical bastard will expect countries rallying to offer themselves to the US and reduce their cut to buy political favor.

Double taxation agreements describe rules to assign the taxation of an activity to a jurisdiction. The other jurisdiction can then no longer tax that activity.

With your proposal you do end up taxing it twice, just at a reduced rate. As I understand it, that would require changes to double taxation agreements.

Yes, this is exactly what the US does with US citizens: they pay the maximum of the US income taxes and the residence country income taxes.

> they pay the maximum of the US income taxes and the residence country income taxes.

The IRS collects on income over $108k/year, and income over that amount is taxed at that bracket and higher. Foreign Tax Credit also prevents double dipping by the IRS.

You'll own nothing, and you'll be happy.

https://www.youtube.com/watch?v=lBBxWtKKQiA

Sounds scary out of context, but it's hardly a silly prediction.

Uber, AirBnB, clothing rental, device upgrade plans...

It is not bad as long as you own stocks, which you can exchange into material goods.

Like some of my friends can afford a decent house, but prefer renting because it gives greater flexibility (they can rent a small flat in the center of the city in a walking distance to the office and meet with friends often while they don't have children instead of investing into big house in the suburbs with empty rooms they wouldn't use).

But if you own nothing and don't save, this is bad.

The UK did a great thing last year, they increased to minimum payment to private pension (equivalent of US 401k) to 8% of salary, so even irresponsible people will have some savings at retirement age. And I think the UK should continue gradually increasing these contributions.

> even irresponsible people will have some savings at retirement age

Ah, there are enough loopholes that a lot of people still won't end up with any savings at retirement age.

There are a lot of self-employed people in the UK, at the low end of pay (gig workers, freelance cleaners, graphic designers, etc) and high end (consultants, IT contractors etc), and bootstrapping entrepreneurs (pay all over the place). The pension 8% doesn't apply to any of them.

Also interesting (secret TPP) bit: "The deal also reportedly includes a framework to eliminate digital services taxes, which targeted the biggest American tech companies."

In other words, if you sell to us, we'll call it dumping, but in areas we monopolize, sovereign governments must have no role in the free market.

Up next, countries in the system must respect human rights as defined by Radio Free Europe.

Is the whole concept of international agreements offensive to you? I don't see how this one is special. Bigger countries always have more influence, such is life.

Sovereignty goes both ways. No country is obligated to deal (allow trade or capital flows) with any other country they don't want to. If this agreement will even have such enforcement.

Countries are obligated to do business with the us.

Its called gunboat diplomacy

When was the last time US used gunboat diplomacy to pressure a country into a multilateral agreement it didn't want to be part of?

Dollar & "cheap credit" diplomacy is more of a thing nowadays, and other powerful countries are doing it too (notably China)

Do you actually have any backing for these claims, or is this all pure speculation?

https://en.wikipedia.org/wiki/Slippery_slope

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