OECD unveils proposals to curb corporate tax avoidance | Hacker News Reader

OECD unveils proposals to curb corporate tax avoidance

reuters.com

51 pointssigna1162 comments

This is very good news and about damn time.

While legal, this tax avoidance hurts competition (as smaller companies pay tax normally, while larger ones do not) and also means that some countries can actually lose money while hosting a business (e.g. business uses national infrastructure but doesn't pay towards it).

You often hear companies use their employee's income tax as a way to justify the business's tax avoidance, but that is utter nonsense: employee's individual income tax goes to paying for infrastructure and service that that employee utilises, not the additional infrastructure cost imposed by the business itself.

One thing that does need to happen is that it needs to become easier for SMBs to pay tax to dozens of different countries while operating in the digital space. If they really want things like sales tax/VAT to be paid then they need to make it relatively EASY to do. Otherwise SMBs just might start rejecting customers from smaller countries (as paying the tax for a single transaction is never worth the cost of setting it all up).

> employee's individual income tax goes to paying for infrastructure and service that that employee utilise

With all due respect, that is nonsense. There is nothing magic about the tax dollars I pay to enforce that they go to the things I use. It's all one big bucket of money.

Case in point: The social security surplus the U.S. ran when the baby boomers were young will be really useful as the baby boomer start retiring. That money ended up being spent just like any other tax dollars.

I agree with your point about tax loopholes being easier for large actors to take advantage of. That seems like a good case for simplifying tax codes, though, not a case for adding even more regulations that rich corporations will inevitably circumvent.

And don't get me started on VAT. That stuff is just a big loophole from the get-go (arbitrary tax rates based on arbitrary categorizations, etc.).

> With all due respect, that is nonsense. There is nothing magic about the tax dollars I pay to enforce that they go to the things I use. It's all one big bucket of money.

Yes, it all goes into a big pot of money. That doesn't preclude the fact that infrastructure and services cost money, companies utilise both, that generates additional expenses (due to wear and tear, etc). The rest of society winds up paying for the company's share.

You don't really even attempt to argue why companies shouldn't pay. Unless the "big pot of money" is your argument then in which case I am not following it.

> I agree with your point about tax loopholes being easier for large actors to take advantage of. That seems like a good case for simplifying tax codes, though, not a case for adding even more regulations that rich corporations will inevitably circumvent.

This just reads like a generic libertarian talking point. Currently the regulations/agreements are: "You shouldn't tax companies twice on the same profits." Getting rid of those regulations wouldn't solve tax avoidance, it would just generate other problems (e.g. over-taxation, double-taxation, etc).

Interestingly I cannot imagine libertarians taking too kindly to double-taxation given their views on taxation in general. But that's what international de-regulation would result in...

Your solution is no solution at all. It is just giving up and hoping the problem solves itself. Which is very naive to say the least.

Instead of defending my case I'll ask you this: why not stop taxing profits and instead start taxing consumption? Seems much easier, no? And the incentives would be in the right place.

Because in general, consumption drives economic growth which makes life better for everyone, whilst retained earnings allow complacent corporations to avoid innovating because they have big enough war chests to scare potential competition away. I can't fathom why you consider that to be a better alignment of incentives.

Because consumption is harming the environment. That said, clearly both sides of that coin aren't particularly great. What's the third option?

Option 3: tax only the environmental harm of goods and services. Eco-friendly goods and services would go untaxed, while many luxury goods would become even more expensive. The trick of course is quantifying environmental harm.

If there were no tax on capital gains and income, which is the whole point of a consumption tax, businesses would have an incentive to distribute much more of their retained earnings to shareholders. Part of the reason war chests have gotten so big is because dividends are disadvantaged to capital gains in the current tax code for many classes of investors. It's not totally clear that the scenario implied by innguest's comment was one of taxes on capital gains and income being removed, though. Keeping (a) income tax, and (b) tax on capital gains/income, and (c) adding a consumption tax, while removing the corporate tax on profits, doesn't seem like a particularly attractive scenario, especially as compared with moving completely to a consumption tax (which is the most favored tax among a consensus of tax economists).

And if the problem is the regressive nature of the consumption taxes, why not address those issues at the source -- by instituting an Earn Income Credit or universal basic income?

You're quite right to point out that favorable tax treatment of capital gains over dividends encourages retaining earnings but replacing both with a massive new consumption tax is hardly likely to stimulate either a desire on the part of management to reinvest revenues or on the part of the shareholders to fund more consumption

And for all its outspoken advocates like Kotlikoff, consumption tax is a long way from being "the most favored tax among a consensus of tax economists". If there's one thing you could get a majority of tax economists to agree on it's that tax on land ownership and various other forms of economic rent distort incentives less than most other taxes, but ironically that's more or less the complete opposite; a tax primarily on wealth.

Trying to solve the regressive nature of pure consumption taxes with a Basic Income is basically squaring a circle: you lose vast amounts of tax revenue from point-one-percenters that spend very little of their taxable income, and pass that burden on to the general public. (Warren Buffett once commented that the percentage of tax he paid was less than some of his junior employees. Given his notoriously miserly spending habits, it's conceivable that the absolute amount of tax he paid would be lower than many of his employees under a pure consumption tax). It also overlooks arguably the most important benefit of higher income is not the ability to consume more in the future but the ability to work less.

And to cap it all, it makes the tax free gains from speculative housing bubbles look very attractive, especially relative to investing in firms that make taxable goods.

> If there were no tax on capital gains and income, which is the whole point of a consumption tax, businesses would have an incentive to distribute much more of their retained earnings to shareholders.

That's kind of a twisted way of looking at it. Insofar as there is a disincentive to distribute retained earnings, its because long-term capital gains are taxed as capital gains, but dividends are taxed both as corporate income and (currently, usually) as long-term capital gains to the recipient.

Simply allowing expensing of distributions would equalize the tax treatment and eliminate the bias in favor of retained earnings, no change in the basic basis of the rest of the tax system is necessary to that purpose.

Sure, eliminating the taxation of income (including corporate income and capital gains) entirely would also eliminate that bias, but its massive overkill if that's your only concern.

Allowing expensing of distributions would actually not equalize the tax treatment. If you could expense distributions it would be more favorable to do dividends than to retain earnings, because retained earnings (in the context of companies building up huge war chests rather than reinvesting retained earnings in the business) would still be subject to double-taxation (corporate taxes, then deferred taxes on capital gains), while dividends would be subject only to the tax on capital income, which is less than the combination of the other two taxes. I think.

It should be obvious, but taxing consumption disproportionately affects low-income people who are the least able to afford it. Conversely, as the sister comment alludes to, if a person has less money, they are far more likely to spend the money that they save from tax breaks.

See also: the declining marginal utility of money.

The problems that come from corporations is the fact that they are 'derivative people' basically. What you should be advocating is abolishing corporate tax and make all corporations into S-corps, so the income and thus tax is attributed to the stockholders. Then you avoid the entire derivative people mess.

But then you have the entire citizenship based taxation schema that the USA is unique in the world in having.

Which infrastructure and services are corporations using outside of their employees? Why can't that infrastructure be paid for through direct fees instead of indirect income taxes? How do we know when corporations are paying their fair share?

> This just reads like a generic libertarian talking point

Maybe. I'm not a libertarian, but I'm not sure why that would disqualify my points. I'd rather our discussion not be an exercise in polemics, please.

> Your solution is no solution at all.

I don't have "a solution", but if the problem is one of justice (that tax rules are unfair, prone to abuse, and hard to enforce), the principles I would apply are simplicity and transparency, not on-the-fly patches to already convoluted logic (spaghetti tax code if you will). At that point we can have sensible discussions about which tax schemes are fair and at which rates.

If the problem is one of revenues being too low, it's far from clear that increasing the effective corporate income taxes across all the OECD will even be a revenue-positive action.

I think the parent's point was that individual income tax is the employee's share of the tax, and that a company can't point to that and say "look, we pay tax through our employees!"

It is fair for everyone who uses the infrastructure to pay for it.

Employees use it, and they pay income tax. Corporations use it, they should pay tax too, but they can't point to an employee's income tax and claim that contribution as their own.

Edit: Clarification

I'm not following. How does a corporation use infrastructure except through people (employees)?

And if there are particular imbalances, why can't they be resolved through more fair (and economically sensible) fee-for-use sort of taxation?

Think of the employee taking a commuter train or driving to work, vs operating a freight train or driving a semi truck for work. I'm not taking an ideological position here, just pointing out the difference between the employee as individual economic actor vs as agent of a corporation.

If semi trucks aren't paying for their infrastructure, raise taxes or fees on semi trucks. It's very non-obvious to me that raising corporate taxes (including on companies that rarely ship things) is a good way to make sure that highways and weigh stations are paid for.

And, again, these actions are still discrete and still being taken by individuals. So taxes on the actions still apply whether the MASTERCARD paying the bill is owned by the citizen or her employer.

Please read the second sentence in my comment above.

Infrastructure includes:

Political decisions on spending (which are influenced by corporations already)

Public education (Do you really want to employ people who don't have basic literacy and numeracy? More than that, nothing drives growth like high quality free education)

Many elements of transportation, which make it possible to move people, goods, and services around reliably at reasonable cost.

Big-project blue sky research (The space program, the Internet, many of the Mk 1 computer models, and not a little aviation have all been gov-sponsored)

Enforceable law, including contract law, and justice (You really don't want to privatise these or put them up for sale)

Healthcare (in sensible countries, anyway)

Military protection

Keynesian pump-priming (and no, bank bailouts were never useful pump-priming)

Basically corps that offshore profits to avoid tax get a massive free ride on all of this, while private citizens have to contribute a share.

I don't know how 'sensible' applies to 'fee for use', because I don't know how you would calculate a realistic social value.

Most suggestions I've seen are literal-minded in a not terribly bright way ('Use a bridge - pay a toll') which is totally inadequate for quantifying or paying for the true social value they add.

The argument really comes down to people who understand gov spending can generate huge social and commercial benefit multipliers, and people who think you can reduce gov spending to a catalog of services with neat little one-to-one costs you can count like beans and stick price tags on.

> individual income tax is the employee's share of the tax, and that a company can't point to that and say "look, we pay tax through our employees!"

Except that individual income tax is only part of the tax paid as a result of an employee's employment. The other half is payroll taxes. When arguing that corporations don't pay income taxes, people often act like corporations pay no taxes at all, which simply isn't true.

> Case in point: The social security surplus the U.S. ran when the baby boomers were young will be really useful as the baby boomer start retiring. That money ended up being spent just like any other tax dollars.

This is a bit deceiving, as it makes it seem like Social Security surplus has been spent. The liquid money may have been spent, but it was spent to buy treasury bonds for the Social Security Trust Funds [0]. When a deficit is finally encountered, those bonds and their owed interest will be used to pay obligations.

I do understand that this is a bit of hand-waving, as it's basically the government buying IOUs from the government, but it's an important note when talking about Social Security and its solvency.

[0] http://en.wikipedia.org/wiki/Social_Security_Trust_Fund

To me basically the question is: should the money be spend by private persons and corporations, or by governments. There should be a balance, but there is a long term tendency towards governments. Because in the end they make the rules. And its difficult to control ones powers...

Personally I am not sure the latter spends it better, in terms of good for the future of society. I am very happy with Google search, Gmail, my iPhone, iPad, etc. Looking forward to ever buy a Tesla hopefully ;-)

There are always side effects: a handful of people getting extremely rich or presidents who spend billions on big projects.

Governments should concentrate on lowering taxes (in Europe the taxes go just one way in the long run...) and keeping a very close eye the playing field: misuse of rules. Privacy and net neutrality come to mind. Software patents... As well as banks taking to high risks which are highly rewarded if it works out or payed for by society if not (which is a governmental decision !).

In my humble opinion our government leaders are just as human as the leaders of companies. Does anyone of them thinks of society ? Probably. Do either one of them think about their own future ? Definitely.

I don't think you can really separate "private persons and corporations" and "governments," because the same people often switch back and forth. Goldman Sachs is the obvious example:

https://en.wikipedia.org/wiki/Goldman_Sachs#Personnel_.22rev...

tl;dr

If we think your cross-border transactions are moving money mostly to avoid tax, we still tax it.

If we think that small divisions in tax-light countries happen to make all the profit by doing all the purchasing, we will allocate that across the business

And currently just having a warehouse in a country did not make you tax resident. Amazon is nothing but warehouses and that's a trend that will continue. So we will tax you if you have a "significant digital presence"

All seem sensible clear policies. Taken with things like HMRC's new whitelisting rules on tax schemes ("until we approve the scheme assume we will tax it") governments around the world might soon start to balance the equation of multi national companies and single nation citizens. A good thing all round and probably the most important activity of the next few years that will never be on the front pages

Won't work. If the choice is pay tax or spend money it will get spent. Earnings may go down but the players will adapt to minimize their tax burden.

Better to spend money than hoard it...

Time to load up on debt! Good thing interest is tax deductible..

This is more of a game than anything. There will always be ways to reduce the tax burden, and I find that changes are often made without really properly thinking them through.

Closing loopholes is great, but rethinking critical parts of the law can also create a whole set of loopholes if not done properly. Which, considering we're human, is always the case.

Many people have suggested removing the tax loophole that is interest on debt. It might have to be coordinated but I would not be surprised if it happens.

We're talking in a context of companies having billions is cash/cash equivalents just to avoid paying taxes. It's pretty much a win win situation.

There are 3 things you can do with money: - Spend it - Hoard it - Invest it

It's better to spend inflationary money than to hoard it, you've got that right. That sentence only works with the "inflationary" word there, which you forgot to add, but I fixed it for you.

Other than risk of facing sanctions (lowe-case s), what is the incentive of say an Ireland to comply when their tax code is such an important reason why businesses go there? All else being equal, won't this hurt the development of many emerging markets (not just tax havens but even Asian countries where businesses have chosen not to re-patriot income - incentiving them to invest locally)

The concept is that even if Ireland continued to have a low tax rate, the country where the business is making their money could tax them when they try and send the money there.

As the article puts it: If you're ONLY money moving to avoid tax, then it can be taxed.

So if a company made tons in the US but then tried to ship it to Ireland, they would just get taxed by the US government at the normal rates instead of Ireland.

But they don't just "ship" the money. They set up subsidiaries to provide services to the parent company. And then the services in low-tax jurisdictions just happen to have high margins. So now is government going to examine internal processes to ensure that margins are "fair?" Seems incredibly unworkable.

They already do examine margins. Its called "transfer pricing". Information sharing is a key part of the proposals.

While internationally supported and implemented tax avoidance rules are generally the right way, I would like to see all these new rules balances with real transparency and accountability for how this (additional) tax income of countries / governments is spend.

What we have as transparency rules today is at best a good show - take the UK for example (considered as one of the best with regards to open data): DFID - the UK's development aid department publishes every £500 spent but with many 100s of millions they spend p.a. the only thing we know is that it disappeared in some opaque gov. shops in Geneva that have zero accountability, spend money on themselves as if there is no tomorrow and - when someone has a closer look - have "lost" billions or fostered corruption and organised crime globally.

And the OECD - like most international organisations - is not exactly a light when it comes to efficient use of (tax) funding.

First governments have to demonstrate and assure that they use the funds entrusted in an efficient way that is best for their citizens and not only for special interest groups. There must be rules to hold those in Government accountable and not only £5000 fines if someone "lost" or wasted £1Billion+ funds, and afterwards (s)he is moved to another senior post or receives a large consultancy contract from where they funds have disappeared.

In the moment this looks more like trying to threaten or milk successful companies or to make them compromise e.g. on the participation in dubious spy programs on citizens.

At the same time don't forget who is "running" the biggest tax heavens on this planet - its the UK and the US plus a series of "independent" island states where dozens of trillions of dollars have found a home (including for some of the largest multinational players mentioned here).

> Amazon and Google say they pay all the taxes they should. Analysts say competitive pressures force companies to seek to minimise all costs, including tax.

Amazon and Google do not have competition. They seek to minimize all costs because that's how they can free the most resources to invest in the product they're offering to consumers. Also, there's no competition when a company gets big and starts lobbying.

This is really bad news for everyone; we all lose when bankers steal money from those that provide us goods and services.

No, Amazon and Google seek to minimize all costs so they can increase their profits.

Doing this will just reduce their profits a little.

And how do they increase their profits? By providing goods and services that customers want. Increasing profits and having your product/service valued and wanted by your consumer base is the same thing. Why do you say "profits" as if it's a bad thing?

As the Democrats argued when Grover Cleveland was elected, taxes make goods more expensive and subsidize monopolies. This will be no different.

When a blue collar worker can make $30/hr again maybe I'll agree with you. It isn't taxes that's lowering our paychecks (taxes are lower than in the Cleveland's day).

You've got it backwards. Once everyone considers these principles I'm putting forward, then blue collar workers will make $30/h again. Taxes are what is lowering paychecks. Taxing comes in several shapes, including inflation. In this sense, taxes are higher now, since the dollar was pegged to gold then.

No, you have it backwards.

The Gold Standard died in 1934 when the President was authorized to devalue the Dollar up to 40%.

In the 70s, things were fine. It wasn't until the 80s when the "$30/hr" bit started to fall off.

How do you explain 40+ years of reasonable wages going into the crapper over the past 35?

Hint: It isn't the Gold Standard which didn't change over this period in any significant way.

In economy, changes take a long time to shows symptoms in the system. How long each change takes is anyone's guess. The gradual unpegging of gold had both immediate and long term consequences.

In 1971 the US ended the Bretton Woods system, finally freeing the dollar from any pegging. (Thanks for the wrong hint)

In 1973 there was the Oil Crisis.

In 1979, the Fed switched its monetary policy from targeting the exchange rate to targeting the money supply, believing they were following what they called Neoliberal ideas. Do not confuse this for Libertarianism, as we wouldn't have a central bank targeting this nor that in the first place.

> In 1971 the US ended the Bretton Woods system, finally freeing the dollar from any pegging. (Thanks for the wrong hint)

Eh? You were complaining about inflation not foreign exchange rates.

For reference you said:

> In this sense, taxes are higher now, since the dollar was pegged to gold then.

http://www.usinflationcalculator.com/inflation/historical-in...

http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=1917&ye... You can verify the #s there too, cept by year to give you an idea. 1917-1918? 18% inflation

Let me point out a few lines for you:

1917 12.5 15.4 14.3 18.9 19.6 20.4 18.5 19.3 19.8 19.5 17.4 18.1 17.4

1918 19.7 17.5 16.7 12.7 13.3 13.1 18.0 18.5 18.0 18.5 20.7 20.4 18.0

1919 17.9 14.9 17.1 17.6 16.6 15.0 15.2 14.9 13.4 13.1 13.5 14.5 14.6

1934 2.3 4.7 5.6 5.6 5.6 5.5 2.3 1.5 3.0 2.3 2.3 1.5 3.1

1935 3.0 3.0 3.0 3.8 3.8 2.2 2.2 2.2 0.7 1.5 2.2 3.0 2.2

Bretton Woods was for handling international exchange rates.

http://en.wikipedia.org/wiki/Bretton_Woods_system#Fixed_exch...

Do you get it now? Or are you confusing the rate for gold for the rate for real goods [e.g. Food, Housing, Labor] still?

From the site you linked: "Rates of inflation are calculated using the current Consumer Price Index"

The CPI presents several problems when used to measure inflation: http://goo.gl/Ywh3T9

Members of the Bretton Woods system "were required to establish a parity of their national currencies in terms of the reserve currency" (that's the US Dollar) and "to bolster faith in the dollar, the U.S. agreed separately to link the dollar to gold at the rate of $35 per ounce of gold".

When Bretton Woods ended, so did the 1 Ounce of Gold <-> $35 USD promise, and Nixon in 1971 said "I am now a Keynesian in economics".

So, basically, your argument is you ignore reality and substitute your own. The Gold Standard pegged the cost of one good [gold] to the price of the USD. It didn't magically make inflation disappear.

RE: Bretton Woods

Fixing the exchange rate doesn't magically make inflation disappear is a fact.

The value of gold [relative to other goods] did vary overtime.

Here you can see it in Oil:

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F0...

1940's 1.02 1.14 1.19 1.20 1.21 1.22 1.41 1.93 2.60 2.54

1950's 2.51 2.53 2.53 2.68 2.78 2.77 2.79 3.09 3.01 2.90

1960's 2.88 2.89 2.90 2.89 2.88 2.86 2.88 2.92 2.94 3.09

Under Bretton Woods, it roughly tripled. If inflation does not exist on the gold standard and technology/economic efficiency of production always improves, how does this happen?

Perhaps Cattle?

http://nass.usda.gov/Statistics_by_State/Washington/Historic...

1944 - 10.60

1970 - 27.00

Or are you going to claim everything just magically gets more expensive over time due to "market forces"?

Hint: If you do, that is inflation.

RE: The CPI

A) The changes you complain about are all post 1980s. So, your complaint about changes in methodology aren't relevant since they don't affect the previous measurements.

B) Even if they were relevant, I can cherry pick data to BS my way to my proof if I really wanted but let us just show exactly how much reality you have to ignore to believe Schiff: "From 1970 to 1980, the CPI rose 112% according to official statistics. During the same time period, the price of Schiff’s basket of 20 goods rose 117%. This leads to a difference of just 5% points."

Try paying 95% of your bills and see how that works out for you. You can't just make economic measurements up out of whole cloth and ignore entire industries.

"To prove there are problems with the official CPI, Schiff calculated the price changes of a basket of 20 goods that consist of common household purchases. Schiff’s CPI basket of 20 goods included: eggs, new cars, milk, gasoline, bread, rent for a primary residence, coffee, dental services, potatoes, electricity, sugar, airline tickets, butter, store-purchased beer, apples, public transportation, cereal, tires, beef, and prescription drugs."

Things in the CPI ( http://www.bls.gov/news.release/cpi.t01.htm ) that he ignores:

1) People who purchase homes, which is the majority. 60+% of people own rather than rent.

http://www.bloomberg.com/news/2014-07-29/u-s-homeownership-r...

So we throw out 60% of housing data [31% of the total basket] because he says so? That is sheer stupidity.

2) We ignore fuel oil and the price of the gas you buy from the utility like he does? No, we don't.

http://www.eia.gov/tools/faqs/faq.cfm?id=49&t=8

Once again, he ignores 60% of households with his basket. That is 32% of the CPI basket he ignores now.

3) Medical services? Everyone needs those, he ignores those. That is another 5.8% of the CPI measure he ignores and pretends doesn't exist with his made up bullshit. That is 37.8% of normal household expenditures he now ignores.

4) He ignores CLOTHING for fuck's sake. That brings us up to 40.1% of the CPI basket he ignores. You are apparently naked.

5) He ignores the difference between eating out vs. eating in. We are up to 45.8%. No one ever eats out. Ever. Clearly, this is true. You've never eaten in a restaurant.

6) He ignores Tobacco (included in the CPI). This puts up to about 46.5% of real world purchases by households you are ignoring.

So just to reiterate in Schiff (and your) reality:

1) You are naked.

2) You do not eat out.

3) You do not use the gas utilities.

4) You do not change the oil in your car.

5) You do not own a home.

6) You never utilize a physician or hospital.

7) You don't use tobacco.

I don't know how you can take Schiff seriously if you do any of those 7 things. Given you aren't posting this from jail for public indecency ... I'm assuming you have to admit you wear clothes.

Some other people bitching about the complete ignorance of reality:

http://www.etvita.com/2013/04/peter-schiff-is-wrong-about-ev...

http://theweek.com/article/index/258502/no-the-government-is...

> Under Bretton Woods, it roughly tripled. If inflation does not exist on the gold standard [...] how does this happen?

Bretton Woods != Gold Standard.

We were off the gold standard in 1933 with the Gold Reserve Act. You said that yourself a couple posts above. That was the first part of the unpegging which reached its conclusion in 1971. But it started in 1933.

To illustrate this further, Executive Order 6102 made it illegal for US citizens to trade gold, and this was in effect all the way until 1975 (notice how 1975 comes after 1971 - we can finally trade gold freely but uh-oh, gold isn't money anymore so what's the point?)

So to answer your question, Bretton Woods was born and died outside the gold standard, and that's why you see the inflation you pointed out.

Regarding the CPI, I will refrain from commenting on your remarks out of ignorance. This is very new territory to me, which I'm still navigating. Some remarks you made went over my head but I can see that it's because of gaps in my knowledge. I found the BPP argument interesting, but it seems it started to show the real inflation and then they changed their formulae: http://www.zerohedge.com/article/mit-tepcoes-its-billion-pri...

So instead I will step back from this tangent. We got into CPI over disagreement on how much inflation there is, and I was arguing that there's a lot of inflation because we went off the gold standard, and so that's why factory jobs don't pay $30/h anymore. You argued that I have it backwards and that everything was good in the 70s. You said it worsened in the 80s and asked me to explain how and I justified it by saying that's when Neoliberal policies took over. What part of this do you disagree with?

Eh, I also included periods during the Gold Standard in the previous post:

1917 12.5 15.4 14.3 18.9 19.6 20.4 18.5 19.3 19.8 19.5 17.4 18.1 17.4

1918 19.7 17.5 16.7 12.7 13.3 13.1 18.0 18.5 18.0 18.5 20.7 20.4 18.0

1919 17.9 14.9 17.1 17.6 16.6 15.0 15.2 14.9 13.4 13.1 13.5 14.5 14.6

See those inflation #s?

We just aren't going to agree. Because I'm of the opinion the CPI isn't perfect ... but compared to other CPI data points, its relatively accurate. The problem with the "perfect, ideal" idea is the fact that, frankly, no one ever tried to build it and graph it over time. Those that pretend they want that are just pushing an ideological agenda and drop large portions of the basket completely. The problem with the CPI is the qualitative analysis, by its nature, fundamentally imperfect. It is an opinion. That said, you can't just drop categories and claim to be anything except a joke.

> So instead I will step back from this tangent. We got into CPI over disagreement on how much inflation there is, and I was arguing that there's a lot of inflation because we went off the gold standard, and so that's why factory jobs don't pay $30/h anymore. You argued that I have it backwards and that everything was good in the 70s. You said it worsened in the 80s and asked me to explain how and I justified it by saying that's when Neoliberal policies took over. What part of this do you disagree with?

It seems roughly right for what was said.

The reason factory jobs don't pay $30/h is because of globalization [cheaper to produce goods in other countries], tax burden shifting from capital to labor [ http://www.businessinsider.com/history-of-tax-rates?op=1 ], etc. That isn't really a "Neoliberal" issue but more simply technological progress has allowed us to outsource more to cheaper labor countries.

I don't care too much as long as people have a living wage [which is at least $10/hr] and the poor aren't taxed heavily compared to historic norms.

Taxes also make people have education and not die of preventable diseases, and fund a rule of law and property enforcement which plays a huge role in enabling companies to actually sell the products their customers value.

All of these have certainly benefited Amazon and Google (and their shareholders, and their end users) to a far greater degree than the minimal amount of tax they deign to pay in my country where they have multiple offices and generate huge revenues. Tax avoidance, one might say, makes everyone else's taxes more expensive and subsidises monopolies.

> And how do they increase their profits? By providing goods and services that customers want.

Or by not paying taxes, thus lowering their expenses.

> Why do you say "profits" as if it's a bad thing?

Because they're making billions in private profit, at the expense of public good. Public education, healthcare, roads, infrastructure are all severely bad in America. There is a reason for that.

> taxes make goods more expensive

That's not the entire story. Keeping high profit margins makes goods more expensive. I'm quite certain Amazon, Google or Apple could all drop a couple of zeros from their yearly profit, pay their taxes and the goods would not increase in price. Their profit would still be very large.

What ethics do you have that makes you insist on trying to regulate the behavior of others? What is the philosophy behind it, and how do you deduce that we can achieve peace and prosperity by forcing others to do the will of a small group in power?

Who gives anyone the right to steal from Google? I'm not on board with that. There's a reason companies leave the US and it's because it has the highest corporate tax in the world at 35%. Google does not live in the US. It does not owe anything to public education, healthcare, roads or infrastructure. Google is a company that allows me to search on the internet. They get paid to show me ads. I could go on and on about what they are and the topic of "roads" would never figure.

If you want to argue that the founders or the employees of Google need to care about education, healthcare, roads, that's another topic, but I'm talking specifically about corporate tax. How is Google making billions at the expense of public good? How much do they owe the public, exactly? Is Google forever indentured to the State? Will it never be free? Are you OK with never being free?

I would say Google has provided plenty of goods to the public and it has paid more than its share several times over. We're all better off because it exists, and the service they provide is even free. It's free and you want to make it more expensive.

It's almost as if you're angry at how much money they're making. "Keeping high profit margins" is exactly what anyone would do because as human beings we want to feel safe, and high profit margins provide the safety that you will have enough resources to change your course of action if necessary, adapting to new market conditions and consumer demands. You want to erode that safety buffer and make Google more fragile.

Your wording says it all: "Google [..] could [...] drop a couple of zeros from their [...] profit". The profits are their reward for supplying something we all want. We all use it daily, it's free, it's amazing and they keep making more cool stuff, and because of that the market has rewarded them. And you're advocating stealing their reward to fix roads. But we don't even know if people want roads! They're there so that's why people use them, but who's to say we don't want something better? Well, we'll never know, because the State said "roads it is" and they're sticking to it, even when the upkeep gets harder and harder. Is the State looking into alternatives to roads? No? We went through a bunch of search companies like AltaVista and Lycos and so on and it took all this time to realize Google was what we wanted, and we've rewarded them for that. What is the State doing to foster a bunch of alternative ways of transportation in order to pick the best so we can reward it?

Oh, you mean you just want roads period, and you want to force everyone to pay for this product, and you don't think there could be alternatives so that's why you're not looking into competing ideas? So let's force Google to pay for this product that was artificially designed and not evolved from market forces like Google's product were? And Google should pay up because it has so much money and it would still be profitable if it sacrificed a few zeroes? Can you please justify this line of thinking to me ethically? Here we have two organizations, one puts out a crummy product it can't maintain, and the other puts out a good product that people said they would pay for; and you're saying we should take money from the successful product and use it to build more of the unsuccessful product. Do you see what I see? Because from here it's clear the solution would be for the State to simply stop making crummy products and stop stealing from successful products, but somehow we've escalated this problem all the way to the level of global corporate taxes.

> What ethics do you have that makes you insist on trying to regulate the behavior of others? What is the philosophy behind it, and how do you deduce that we can achieve peace and prosperity by forcing others to do the will of a small group in power?

We live in a society where we all pay taxes and pool that money for the good of all (roads, education, police, etc. etc.)

If someone is getting benefit from stuff bought by that money but no paying into the pool, they're stealing from the rest of us.

If I and millions of others stopped paying income tax on our $100k salary but kept using up all of societies stuff, how would you feel about that?

Have you ever worked as a waiter in a restaurant? Some restaurants let waiters keep all their tip, while others force waiters to share their tips equally in a collective pool.

Those that let waiters keep all their tip argue that the server has more motivation to give better service if they see the proportional impact of their effort. That makes servers happy which rubs off on customers, making the experience better for everyone involved. It is a win-win system that encourages self-improvement and punishes slackers.

On the other hand, restaurants that pool their tips see everything in terms of a team effort. They argue that because of the initial training investment, they want to make sure no details are missed and the only way to do that is by encouraging collectivist thinking. Tip sharing is preferred in restaurants that offer a richer, more complicated experience (having to educate customers on what they're ordering, answering questions about fancy food and wine and pairing them, etc). They also argue that tip sharing makes servers more fungible in that they can switch between roles - waiting, busing, serving drinks.

The first system ("keep tip") is simple to explain and is self-correcting. If a server underperforms it's easy to see and intervene. The second system ("tip pool") feels "bigger", has more moving parts (tips changing hands), and requires constant surveillance by the servers themselves, not to mention some bureaucracy to manage the money division. The keep-tip system can be said to be immune to slackers because a slacker cannot adversely affect the system beyond the scope of the slacker (other than dissatisfied customers not coming back); but slackers are a huge burden on the tip-pool system, as they effectively steal money from the other servers by not pulling their own weight as much as the others. This is a disincentive for the individual waiter that is above average and could be keeping more of their tips elsewhere.

Despite the differences and the different opinions we can draw from them, both kinds of restaurants exist, but in the keep-tip type, waiters can be said to have more freedom and they have the right to keep the fruits of their labor. I've informally asked my friends and they all said if they could choose between keep-tip and tip-pool they'd choose keep-tip. So it must be the case that someone else other than waiters is benefiting from tip-pool systems.

Now imagine trying to change a restaurant's tipping system. You say that because the pool-tip restaurant provided training, it's only fair that they contribute to the tip-pool. Then one of the waiters proposes a new system where there is no tip-pool, and claims the restaurant would work just as well, if not better, if it adopted keep-tip. Of course the other waiters argue "we work in a restaurant where we all pool tips for the good of all (busboys, dish cleaners, cooks, etc) and if someone benefits from this environment without paying into the pool, they're stealing from the rest of us". Of course, nothing could be further from the truth.

I am from a country that doesn't have tips, now live in one that does, and in all honesty, tipping is just a disgusting form of paid slavery anyway "IF you do what I tell you to, and IF I like it, I MIGHT give you some of MY money. Or not".

It's very nasty and degrading.

anyway....

What you're talking about is changing the system.

What I'm talking about is simply have everyone abide by the system as it currently stands. i.e. I'm paying my taxes, Google should be paying theirs.

No, I'm arguing the current system is immoral because it is based on theft. You seem to be OK with theft, so it's OK with you. But I have morals and it's not OK with me. Hence it needs to be changed.

Amazingly you think tips are nasty and degrading but you're OK with taxes, when I've spent several paragraphs equating the two.

It's interesting you think the current tax system is immoral (sorry, I wasn't getting that from what you wrote earlier).

Are you suggesting that nobody should pay taxes? That we have no public anything? (schools, roads, police, etc.)

How will our society function without taxes?

"How will society function without taxes?" is a genuine question and several books have been written to answer this question. I'm currently reading one of them: Anarchy, State and Utopia.

The answers are very interesting and mind opening, and I'd invite you to do your own research.

One last point about your question above. Is it really fair to ask an abolitionist "but without slaves, who will pick the cotton?"? Must the abolitionist have an answer to that question in order for us to act on his argument that slavery is immoral?

Amazon and Google are in fact direct competitors in a number of areas. There's also all kinds of competitors. Ebay, Barnes & Noble, MS, Yahoo, etc.

It's about time companies start paying their fair share of taxes. Not only that, it's about time to start raising their tax rates since they don't care about paying employees a living wage.

> It's about time companies start paying their fair share of taxes.

Why should companies even pay tax in the first place? The owners should pay tax on profits, but why should the corporation itself pay tax?

> Not only that, it's about time to start raising their tax rates since they don't care about paying employees a living wage.

How can you possibly not realize that if you increase their tax burden they will lower salaries? Do you think there is a magic pot of money that corporations can draw from to pay the tax?

> Do you think there is a magic pot of money that corporations can draw from to pay the tax?

Yes it's called the CEO's 30,000x higher salary.

> Why should companies even pay tax in the first place? The owners should pay tax on profits, but why should the corporation itself pay tax?

Because a corporation's losses cannot harm the owner's personal wealth. A corporation therefore should pay taxes in order to cover that particular expense to society.

> Yes it's called the CEO's 30,000x higher salary.

That wouldn't work. The CEO would just go to another company, and it's REALLY hard to find good CEO - there's a reason they are paid so much.

Also, with the kinds of companies affected by this the CEO doesn't get paid at all. The owner only earns any profits, but draws no separate salary.

> Because a corporation's losses cannot harm the owner's personal wealth.

That's a surprisingly good answer.

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