So, let me see if I understand this: the US is going to bat for the big software companies who don't want to pay taxes in other countries, and yet I, an expat American, am expected to file an income tax return with the IRS every single year for my foreign earnings, which may be subject to dual-taxation if I make "too much."<p>What a crock of shit.
The US IT sector is heavily subsidized. Giving Apple, Google, Facebook etc. billion dollar subsidies at home would spur trade wars. So instead the US uses its never failing ability to play European countries against eachother and its influence over smaller jurisdictions like Ireland, Netherlands, Switzerland, Guernsey, Jersey, Bahamas, Isle of Man, British Virgin Islands etc to make sure that large US corporations' foreign income - which wouldn't be taxed in the US anyways - can be kept untaxed.
It talks about France. France is a machine of expending money right now, better said, of wasting money.<p>I am living in France this Summer, a very rich and beautiful country with a hole in the pocket. French people love to life well, and someone else to pay the bills, the Germans, the rich, whoever but not them.<p>Mr Hollande only want to do one thing, to raise taxes. But there is never enough money when you don't expend wisely.
Let's see how this pans out. Maybe this time the UK will not play for the US team, given the outrage there about this issue, but I'm afraid that without a common EU position about this the US will be able to use their usual divide et impera tactics.
I'm not sure why people are particularly surprised by this. Most of the large international companies that make most out of tax avoidance have large US bases. While the US economy does lose some to the schemes they use (like all the cash Apple has sat outside the US, to give a commonly quoted example) it loses less than the competing economies overall so agreeing to crack down on tax avoidance could result in a net loss. Even if it didn't, those companies can also afford to buy the best lobbyists in town who in turn can buy the relevant number of votes to threaten politicians who don't toe the line.
If you make a certain amount of money in a certain country, then you should pay that country's taxes. Pretty simple concept, no?<p>This whole "let's reroute all our profits from all the countries into this country where the taxes are close to zero" is utter BS. If you don't like its taxes, don't do business in that country. Simple. If the government thinks they're losing businesses with high taxes, then maybe they will lower them - or maybe not. It's their and their citizens' prerogative.
Actually, in the same manner the US initiated a massive FUD campaign against the "evil" (non-US) forces at the ITU summit last year in Dubai. Behind the facade of "save the Internet", the agenda was to save the Internet giants like Google and keep the US control over the net. In light of NSA revelations, it has even more sinister overtones.
I'm no fan of the overreach of the US government that includes, but is not limited to:<p>- requiring all citizens and non-citizens to declare all foreign bank accounts (FBAR) including signatory authorities on trusts and companies;<p>- unclear rules on the aforementioned. Do you have to declare retirement accounts? Are they taxed? Nobody really knows. It's clear the only value in FBAR is in non-compliance if the government decides to prosecute you;<p>- requiring non-resident citizens and residents to file tax returns and pay taxes if their income is sufficiently high and either the income is in a country that has no double taxation treaty with the US or it does and its tax rate is simply lower, even for those who haven't stepped foot in the US in 20+ years. I actually know many US citizens who don't do this and it could be a real problem for them at some point.<p>All of this while allowing the systematic avoidance of tax by US companies on a massive scale. US companies need to report their foreign income. An individual would have to pay US taxes on foreign income. Why shouldn't a company do the same? Why can't it pay the difference between US taxes and whatever taxes they've already paid as is standard in all double taxation treaty cases?<p>But the move here by the French is blatantly political and narrowly targeted at US companies. You'll note the language is around the "digital economy". Well, why should such reform be limited to only Internet companies, which--surprise, surprise--are primarily US companies?<p>That's actually what the US (rightfully IMHO) is objecting to.<p>All of this is simply window dressing however. The real problem with the system is complexity. Think of tax loopholes as bugs. The more complex software, the more bugs there are and the harder it is to eradicate them. Tax law is no different.<p>Unfortunately there is no political appetite for true reform as every complicated exception is the result of shoring up some constituency or pork barreling or other "corruption" so as much as we need to stop, say, poring money into corn subsidies, it just won't happen for the foreseeable future.<p>Borders are disappearing. We already see the nonsensical effects of this such as attempts to limit content distribution to geographical regions. At some point we're simply going to have a global tax regime and, dare I say it, world government, scary as that will probably be.