Minimum 15% global corporate tax has too many loopholes

Taxing corporate income is a flawed concept. Corporate headquarters are easily moved, and Corporate income is easily shifted between corporations and individuals in different tax jurisdictions all over the world.<p>You have to tax the income at the source, at the point of sale. It’s why most of the EU shifted to VAT’s decades ago.<p>The US should do the same. Corporate tax is already effectively eliminated for corporations in the US, as the income is just passed through to individual owners and shareholders who pay tax on their individual income.<p>The only corporations who pay tax in the US are large corporations who need massive amounts of cash on hand for research and reinvestment for new products and ventures.

&gt;The poorest 10% of Americans pay more – 25.6%.<p>Is that correct? I thought anyone below the poverty line paid 0% income tax, and would just have to pay sales tax. And property tax, gas tax, social security tax, and inflation, which is a secret hidden tax. But still, 25% sounds high.

Another matter is corporation taxes can be the first step in a chain of taxes. A corporation might be taxed on a profit and then invest it in various ways, but commonly it&#x27;ll be paid out as dividends to shareholders who then pay further taxes.<p>This makes it possible to be a &quot;high corporation tax&quot; country where shareholders still net more money than those in a &quot;low&quot; corporation tax country with high dividend taxes.

It’s a start.<p>Yes, it seems insufficient in so many ways, but it is a huge step in the right direction.<p>Getting countries like Ireland, who are getting rich helping big tech legally avoid taxes, to sign on was very difficult.<p>I think Yellen deserves a lot of credit for this.

These don&#x27;t sound like &quot;loopholes&quot;, they sound like explicit limitations intentionally negotiated by signatory states because what government in its right mind would completely give away their tax sovereignty without any kind of reservations? In that context, these &quot;loopholes&quot; don&#x27;t reduce the extra tax collected under the agreement, they increase it by ensuring that there actually is an agreement.<p>&gt; The EU Tax Observatory isn’t calling for an outright ban on green-technology subsidies. But it is urging governments to consider other policies to offset the financial gains to the wealthy from such tax breaks.<p>&quot;It&#x27;s okay if you incentivise good behaviour, as long as you also punish it at the same time.&quot; Insane.

The journey continues, on how to become creative, to get to other people&#x27;s money and not earning it like everyone else.<p>Governments, learn how to spend without being judged.

How about we tax billion dollar corps an extra 10% because we expect them to use their considerable wealth to exploit loopholes. Like any healthy budget it should have a little bit of a safety net built in.<p>That 10% could be a considered an economic incentive similar to giving any non billion dollar company a tax break. However this idea would add money to the countries budget instead of removing it.

The problem I find with these global taxes is not the arbitrary percentage set but the agreement and collaboration between countries that implement it. Some specialize in offering tax incentives in differing sectors (i.e. Ireland with their innovation tax). Some are very lax on enforcement or keeping a good eye on things (i.e. Switzerland). Are they really going to scrap that for this global tax if there is high likelihood that not everyone will play ball?<p>If you only have a subset of countries on the same page, the accounting firms will definitely exploit that and move the wealth away from them, avoiding the tax. I just don&#x27;t see this working at all any time soon, period - too many corrupt states in play at the moment.

I&#x27;ll mention a concept I was exposed to recently that changed my thinking about all this: cartel arrangements are profitable to disrupt.<p>That&#x27;s what these global minimum tax and things are. Governments get together and decide that to squeeze a little harder there can be no escape. But all it takes is one government somewhere that decides not to do it and they get the economic benefit. Or, they can pretend to do it and give loopholes to some corporations, like Ireland does with their tax schemes.<p>You&#x27;re just not ever going to get the whole world to play ball the same way.

Obviously. Calculate how many incentive dollars the corporations have to influence the policy makers into creating loopholes for them, and you get the reason for the loopholes.

There&#x27;s a common talking point about corporations not paying their dues.<p>- A megacorp that pays 0% in income taxes still pays a ton of sales tax on things it buys<p>- Every employee pays income tax, sales taxes, income gains taxes on their investments, and eventually death taxes<p>- The owners pay taxes on dividends received and capital gains in rising share prices, and all the same sales et al taxes as the employees on the remaining amount.<p>- The economic activity generated by the 0% megacorp will create higher incomes for other corporations, all of whom are subject to the above taxes, and not all of whom manages to avoid all income taxes.<p>The fact is that dodging tax is at best a temporary aberration. There are many financial tricks to delay and minimize taxes, but the government will always take its pound of flesh eventually.<p>Also, at some point the owners of that money will spend it &#x2F; gift it &#x2F; die and then it gets taxed.<p>Even in the USA, where these corporations are supposed to rule the roost, government spending as a % of the economy has been skyrocketing for the past century.<p>Even if the government banned all income tax, they would stealth-tax us by issuing bonds and inflating the currency away.<p>To boost their careers, top bureaucrats the world over need their headcount to keep growing, so they demand blank cheques from the productive with an air of moral sanctimony that&#x27;s almost impressive.<p>I fully support reasonable taxes to feed &amp; educate the children of the poor and many other nice things, but the bureaucracy is a monster that never stops growing unless we make it.<p>Something to keep in mind next time John Oliver goes on a rant.

Of course.<p>Wrong tax. Tax is there to free up people for the public purpose, so you tax firms on their use of manpower in your jurisdiction.<p>That encourages the use of automation, which is what we want, and we can then turn competition up to 11 (ie anti-trust&#x2F;competition legislation) which is what keeps corporate profits under control and prevents hoarding and gouging.<p>Beardsley Ruml told us in the 1940s that taxing profits is the wrong target. <a href="http:&#x2F;&#x2F;home.hiwaay.net&#x2F;~becraft&#x2F;RUMLTAXES.html" rel="nofollow noreferrer">http:&#x2F;&#x2F;home.hiwaay.net&#x2F;~becraft&#x2F;RUMLTAXES.html</a>