Biden attempting to tackle international tax avoidance (1 Viewer)

[mrtrench]

Biden is proposing:

1. Companies pay tax proportional to sales in each country
2. First world countries agree a minimum level of corporation tax.

Winners:

- Small companies which will become more competitive if huge companies pay more tax.
- Public services and/or personal tax rates in the currently high corporation tax countries (USA; UK; EU...)

Losers:

- Personal pension savings for individuals. Also people who invest in these companies (so typically at least middle income).
- Public services and/or personal tax rates for citizens of tax havens (Ireland etc.)
- Senior managers at these companies.
- R&D in these companies.

It needed the USA to co-operate to make this happen.

 

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[shmmeee]

Not sure how pensions are affected, surely it’s the fund managers job to move investments when the market changes. “Pension funds” is always the last hiding place of people that just don’t want to rein in corporate power.

Same for R&D TBH. See very little evidence corporations effectively do R&D purely off their own profits. Most major innovations comes off the back of government spending.

The idea returning to below a historically normal corporate tax rate will be the end times is for the birds.

 

[chiefdave]

Haven't seen any of the detail of his proposal but its pretty clear something needs to be done. Just not right that companies are taking in huge amounts of money and paying virtually no tax.

 

[mrtrench]

Not sure how pensions are affected, surely it’s the fund managers job to move investments when the market changes. “Pension funds” is always the last hiding place of people that just don’t want to rein in corporate power.

Same for R&D TBH. See very little evidence corporations effectively do R&D purely off their own profits. Most major innovations comes off the back of government spending.

The idea returning to below a historically normal corporate tax rate will be the end times is for the birds.

I'm sure you'll get lots of likes for this. I've not said it will be the "end of times" and I'm actually supportive of it. I tried to give a balanced picture of who will win and who will lose. If Group A benefits then there must be a Group B that loses. I know you like to imagine that Group B is exclusively a cabal of multi-billionaires who control the world from within a dormant volcano. I don't agree with you.

1. Pensions are affected because fund managers choose equities which they believe will deliver the greatest return to the fund (active funds) or passively follow the make up of the index containing large companies.

If you take action which reduces price of some of the best performing companies, the fund manager may well choose another stock - one that he expected to perform less well than the one he had. On passive funds, all of these companies are part of the indices they follow. Pension funds; unit trusts and insurance companies (on behalf of pension savers in the most part) hold over 20% of all equities. They will be affected.

2. I'm not surprised that you think that " Most major innovations comes off the back of government spending. " because it suits your agenda. If that were true, we'd have expected the countries which tried government control economies to outperform the others. Sadly, that's not what has ever happened.

We are not talking about small start ups here, where governments do sometimes provide grants or encourage individuals to do so via tax breaks (VCT, EIS). They are not affected. We are talking about huge companies, which surprisingly governments don't typically fund. If they have less money, they'll spend less on R&D. In the case of Amazon and Tesla that may be a good thing, as they are spending loads on white elephant space projects. I'm also not saying that huge companies won't spend anything on R&D - simply that the amount of free cash they have will reduce.

If you want to be taken seriously, by me at least, you have to accept facts which don't fit into your philosophy, Horatio.

 

[CCFCSteve]

Haven't seen any of the detail of his proposal but its pretty clear something needs to be done. Just not right that companies are taking in huge amounts of money and paying virtually no tax.

Agreed. Also, if Biden doesn’t, countries were going to do try to do unilaterally. We’ve raised this recently and apparently the US said they’d impose tariffs on more if our goods if we did...charming !

US threatens tariffs on UK exports over digital services tax

Price of clothing and footwear, ceramics, beauty products and furniture could be hit

www.google.co.uk

It’s got to happen. It’s an unfair competitive advantage and is basically taking the piss out of of governments worldwide. It does need international buy in though

 

[Brighton Sky Blue]

Not sure how pensions are affected, surely it’s the fund managers job to move investments when the market changes. “Pension funds” is always the last hiding place of people that just don’t want to rein in corporate power.

Same for R&D TBH. See very little evidence corporations effectively do R&D purely off their own profits. Most major innovations comes off the back of government spending.

The idea returning to below a historically normal corporate tax rate will be the end times is for the birds.

Pharmaceutical companies model being able to fund RnD from ‘blockbuster’ products. You have to recoup the cost of research and trials with interest before the patent expires, this is well known. Of course at any point a drug candidate can fail and you lose all your investment in it.

 

[David O'Day]

I'm sure you'll get lots of likes for this. I've not said it will be the "end of times" and I'm actually supportive of it. I tried to give a balanced picture of who will win and who will lose. If Group A benefits then there must be a Group B that loses. I know you like to imagine that Group B is exclusively a cabal of multi-billionaires who control the world from within a dormant volcano. I don't agree with you.

1. Pensions are affected because fund managers choose equities which they believe will deliver the greatest return to the fund (active funds) or passively follow the make up of the index containing large companies.

If you take action which reduces price of some of the best performing companies, the fund manager may well choose another stock - one that he expected to perform less well than the one he had. On passive funds, all of these companies are part of the indices they follow. Pension funds; unit trusts and insurance companies (on behalf of pension savers in the most part) hold over 20% of all equities. They will be affected.

2. I'm not surprised that you think that " Most major innovations comes off the back of government spending. " because it suits your agenda. If that were true, we'd have expected the countries which tried government control economies to outperform the others. Sadly, that's not what has ever happened.

We are not talking about small start ups here, where governments do sometimes provide grants or encourage individuals to do so via tax breaks (VCT, EIS). They are not affected. We are talking about huge companies, which surprisingly governments don't typically fund. If they have less money, they'll spend less on R&D. In the case of Amazon and Tesla that may be a good thing, as they are spending loads on white elephant space projects. I'm also not saying that huge companies won't spend anything on R&D - simply that the amount of free cash they have will reduce.

If you want to be taken seriously, by me at least, you have to accept facts which don't fit into your philosophy, Horatio.

No one takes you seriously anyway so swings and roundabouts

 

[shmmeee]

I'm sure you'll get lots of likes for this. I've not said it will be the "end of times" and I'm actually supportive of it. I tried to give a balanced picture of who will win and who will lose. If Group A benefits then there must be a Group B that loses. I know you like to imagine that Group B is exclusively a cabal of multi-billionaires who control the world from within a dormant volcano. I don't agree with you.

1. Pensions are affected because fund managers choose equities which they believe will deliver the greatest return to the fund (active funds) or passively follow the make up of the index containing large companies.

If you take action which reduces price of some of the best performing companies, the fund manager may well choose another stock - one that he expected to perform less well than the one he had. On passive funds, all of these companies are part of the indices they follow. Pension funds; unit trusts and insurance companies (on behalf of pension savers in the most part) hold over 20% of all equities. They will be affected.

2. I'm not surprised that you think that " Most major innovations comes off the back of government spending. " because it suits your agenda. If that were true, we'd have expected the countries which tried government control economies to outperform the others. Sadly, that's not what has ever happened.

We are not talking about small start ups here, where governments do sometimes provide grants or encourage individuals to do so via tax breaks (VCT, EIS). They are not affected. We are talking about huge companies, which surprisingly governments don't typically fund. If they have less money, they'll spend less on R&D. In the case of Amazon and Tesla that may be a good thing, as they are spending loads on white elephant space projects. I'm also not saying that huge companies won't spend anything on R&D - simply that the amount of free cash they have will reduce.

If you want to be taken seriously, by me at least, you have to accept facts which don't fit into your philosophy, Horatio.

Yeah everyone who disagrees with you is in it for the likes iamverysmart.

If you want to be taken seriously you need to look at the facts rather than the theory. Corporation tax levels do not correlate with either R&D spending or overall market performance. If you think they do, show some data. There’s been a significant drop in CT levels worldwide in the last 50/60 years and the stock market has continued to perform at roughly the same level and R&D spend rate has barely changed.

Also LOL at thinking space travel doesn’t have significant real world results. Inventions we use every day that were actually created for space exploration

 

[shmmeee]

Pharmaceutical companies model being able to fund RnD from ‘blockbuster’ products. You have to recoup the cost of research and trials with interest before the patent expires, this is well known. Of course at any point a drug candidate can fail and you lose all your investment in it.

And that’s why patents and research tax breaks exist. It’s nothing to do with CT. we haven’t had an explosion in research since we slashed CT rates.

Can’t believe you’re arguing for trickle down economics TBH.

 

[Brighton Sky Blue]

And that’s why patents and research tax breaks exist. It’s nothing to do with CT. we haven’t had an explosion in research since we slashed CT rates.

Can’t believe you’re arguing for trickle down economics TBH.

I didn't think I was?

 

[shmmeee]

I didn't think I was?

“If you don’t give this large corporation tax breaks they might not spend their money on X good thing” is trickle down theory.

It’s always wheeled out when business is asked to pay fair tax and it’s always nonsense.

 

[Marty]

I agree something needs to be done, but not sure this can work with fluctuations in currencies/economies.

It's about time the people of this county wised up to the shady shit companies do and start actively boycotting firms.

 

[Brighton Sky Blue]

“If you don’t give this large corporation tax breaks they might not spend their money on X good thing” is trickle down theory.

It’s always wheeled out when business is asked to pay fair tax and it’s always nonsense.

I was more debating the point that companies don’t reinvest profits into RnD.

 

[Sky_Blue_Dreamer]

One of the problems with a global economy is that businesses can set nations against each other to give them low tax rates and investment grants etc to entice them in. It needs looking at globally and at least this conversation might start it, esp coming from such a big player as the US.

I'm sure in the fine print it'll benefit America most but it needs looking at.

 

[skybluetony176]

It’s criminal that multinationals don’t pay tax in the country where they earn the money. I try to avoid those companies but it’s easier said than done.

 

[Ian1779]

Governments could do more easily if they do wished... for example not giving government contracts to companies that aren’t registered to pay tax in the UK.

 

[shmmeee]

I was more debating the point that companies don’t reinvest profits into RnD.

Companies do R&D if it’s beneficial, same as hiring staff, same as anything else. Also money spent on R&D is, by definition, not profit.

No business owner sits around with a pile of cash at the end of the year and thinks “Oh I’ve got too much, I’ll spend on R&D for the benefit of humanity”.

 

[Brighton Sky Blue]

Companies do R&D if it’s beneficial, same as hiring staff, same as anything else. Also money spent on R&D is, by definition, not profit.

I meant the profits made on one drug are used to fund the development of new ones. Wires getting crossed I think

 

[shmmeee]

I meant the profits made on one drug are used to fund the development of new ones. Wires getting crossed I think

Yeah but that’s just the cost of business, you could equally argue the money spent on R&D is recouped by the profits.

But yeah crossed wires, I thought you were supporting OPs idea that raising tax on profits will hurt R&D.

 

[chiefdave]

I meant the profits made on one drug are used to fund the development of new ones. Wires getting crossed I think

That's easily solved if they are genuinely using profit from one product to fund research into another. Just put some form of tax relief in. Very different to the likes of Starbucks paying £4m in tax on £387m in sales in the UK.

 

[Brighton Sky Blue]

That's easily solved if they are genuinely using profit from one product to fund research into another. Just put some form of tax relief in. Very different to the likes of Starbucks paying £4m in tax on £387m in sales in the UK.

Yeah I was on about a specific example. In the main yeah a lot of these companies take the piss

 

[mrtrench]

It’s criminal that multinationals don’t pay tax in the country where they earn the money. I try to avoid those companies but it’s easier said than done.

Surprised that you are for this, Tony, as it's essentially an "America First" type policy - taking tax revenue from poorer countries with small consumer populations and giving it to richer more populous nations such as the USA. Are you sure you read the briefing paper correctly?

Can we get @PVA in here to tell us all how tax is racist? And that the sooner the pale and stale Biden is replaced by a proud transsexual of colour the better!

 

[mrtrench]

That's easily solved if they are genuinely using profit from one product to fund research into another. Just put some form of tax relief in. Very different to the likes of Starbucks paying £4m in tax on £387m in sales in the UK.

That's a good point. One of the issues with this is indeed tax incentives. Countries with higher corporation tax tend to compensate with incentives to make companies do the things they want. That's complicated when tax is divided by where the sale took place, rather than where the IP is registered. On balance I think it's still worth pursuing but this needs careful thought - otherwise it will just create greater problems.

 

[wingy]

Surprised that you are for this, Tony, as it's essentially an "America First" type policy - taking tax revenue from poorer countries with small consumer populations and giving it to richer more populous nations such as the USA. Are you sure you read the briefing paper correctly?

Can we get @PVA in here to tell us all how tax is racist? And that the sooner the pale and stale Biden is replaced by a proud transsexual of colour the better!

Getting confused here .
Is this anything akin to the idea that tarrifs should reflect that differing population size between trading nation's?

 

[PVA]

Can we get @PVA in here to tell us all how tax is racist? And that the sooner the pale and stale Biden is replaced by a proud transsexual of colour the better!

What a fucking weirdo you are.

 

[mrtrench]

Getting confused here .
Is this anything akin to the idea that tarrifs should reflect that differing population size between trading nation's?

Not directly. Biden wants to change corporation tax so that it is charged in the location of sale rather than where the company is registered. A consequence of that is that nations such as Ireland and Hungary which have low populations and low corporation tax will lose money, which instead will move to the places with the highest numbers of consumers.

 

[mrtrench]

What a fucking weirdo you are.

Oh no, you're not going to go on a march in protest are you? All those shop windows in St. Albans aren't going to smash themselves.

 

[PVA]

Oh no, you're not going to go on a march in protest are you? All those shop windows in St. Albans aren't going to smash themselves.

Are you alright? Genuinely? I think you have some issues.

Show me on the doll where the nasty leftie touched you.

 

[Grendel]

Are you alright? Genuinely? I think you have some issues.

Show me on the doll where the nasty leftie touched you.

Oh yeah this really is a leftie policy you dimwit

 

[PVA]

Oh yeah this really is a leftie policy you dimwit

You idiot.

Where did I say it was? Where have I even mentioned the policy?

Try reading the last few posts back again.

 

[Grendel]

You idiot.

Where did I say it was? Where have I even mentioned the policy?

Try reading the last few posts back again.

You mentioned left wing. Is your car getting dirty? Those lada Rivas never look good with mud on the wheel trims

 

[clint van damme]

Biden is proposing:

1. Companies pay tax proportional to sales in each country
2. First world countries agree a minimum level of corporation tax.

Winners:

- Small companies which will become more competitive if huge companies pay more tax.
- Public services and/or personal tax rates in the currently high corporation tax countries (USA; UK; EU...)

Losers:

- Personal pension savings for individuals. Also people who invest in these companies (so typically at least middle income).
- Public services and/or personal tax rates for citizens of tax havens (Ireland etc.)
- Senior managers at these companies.
- R&D in these companies.

It needed the USA to co-operate to make this happen.

Will this be like the previous tax avoidance/ money laundering measures the States signed up for which they then managed to exempt themselves from while making sure everyone else adhered to them?

 

[mrtrench]

Will this be like the previous tax avoidance/ money laundering measures the States signed up for which they then managed to exempt themselves from while making sure everyone else adhered to them?

I cannot see how that would work, they'd have to participate. The whole thing would fall apart if the biggest economy in the world exempted themselves. Europe and the UK have been looking for solutions to this for years, which don't really work without the States.

 

[PVA]

You mentioned left wing. Is your car getting dirty? Those lada Rivas never look good with mud on the wheel trims

Yes. In response to mrtrench's bizarre outburst, not related to the policy.

Try reading it again.

 

[clint van damme]

I cannot see how that would work, they'd have to participate. The whole thing would fall apart if the biggest economy in the world exempted themselves. Europe and the UK have been looking for solutions to this for years, which don't really work without the States.

There was an agreement along the lines of countries would report people money laundering, using tax havens etc to the country of their citizenship.
The US then reneged, (remember there are two US States that now have centres of tax avoidance, think one in Colorado and one in Nevada but I couldbe wrong) but still insisted other countries still report US citizens up to no good abroad.