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from the luxembourg-shuffle-fulfilled-by-amazon dept.
In 2012, something like US$80 billion worth of multinationals' profits worked on their suntans in Bermuda, according to an international report into profit-shuffling and tax avoidance.
Oxfam, the Tax Justice Network, the Global Alliance for Tax Justice, and Public Services International have put their heads and wallets together to fund a report into how multinationals are picking the pockets of G20 nations.
In one way, it's no surprise: the world's top economies are, pretty much by definition, the places where multinationals will make the most money. However, they also have the best resources to try and get companies to pay their taxes, and if the Oxfam et al report is accurate, they're getting gamed hand-over-fist.
The report says just twelve countries (the USA, Germany, Canada, China, Brazil, France, Mexico, India, the UK, Spain and Australia) account for 90 per cent of US multinationals' “missing” profits.
Those profits get processed through various implementations of the “Irish-Dutch sandwich” to be booked in low-tax countries like the Netherlands, Ireland, Luxembourg, Switzerland and Bermuda.
If the numbers are accurate (the report's authors put a number of caveats on the data), then between $500 and $700 billion gets shuffled around in this way, which is how Bermuda found itself home to $80 billion worth of profits in 2012 (its GDP in the same year was a paltry $5.47 billion).
(Score: 2, Insightful) by DutchUncle on Thursday November 12 2015, @04:44PM
No, sorry, taxing property punishes the retired pensioner, or the family living in the house that great-grandpa built that has become worth more than anyone imagined - and that the family couldn't possibly afford to replace at the modern valuation. Taxing consumption is regressive because even the rich can only eat so much and wear so much clothing. Income is the place where inequity starts, and taxing ALL income as income (rather than taxing some income at different rates) is the fairest way to get the money to run society. Someone's got to pay for the roads and the streetlights.
(Score: 3, Interesting) by Phoenix666 on Thursday November 12 2015, @04:53PM
If we really want to level the playing field, we should tax income, property, and capital gains steeply above a certain level. That means there's no more incentive for the billionaires to amass 50 trophy homes, or give themselves multi-million dollar golden parachutes, or what-have-you. Financial transactions ought to be taxed heavily above a certain level; Wall Street people add zero value to the world with their numbers games, so they should at most eke out a subsistence living. After all, they're not doing any real work, so why should they roll in cash? Be a worthless parasite, earn like a worthless parasite, ie., very little.
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Thursday November 12 2015, @10:53PM
This sounds similar to the so-called "progressive" income tax that was tried, with disastrous results, during the Eisenhower era.
(Score: 2) by NotSanguine on Friday November 13 2015, @12:53AM
steeply above a certain level
This sounds similar to the so-called "progressive" income tax that was tried, with disastrous results, during the Eisenhower era.
You lost me there. Please explain [wikipedia.org] what the hell you're talking about?
No, no, you're not thinking; you're just being logical. --Niels Bohr
(Score: 2) by Runaway1956 on Friday November 13 2015, @03:48AM
Quick read on progressive tax rates. Maximum taxes could approach 100% on income above a certain level. The purpose of the taxes was to pay off debts incurred in the world war. For certain values of "failed", I suppose it can be claimed that the tax structure was a failure.
Despite such claims, the wealthy didn't become impoverished while these taxes were in place. In fact, the wealthy continued to grow more wealthy, albeit at a slower rate than they might have liked. Individuals were taxed at around 15% for the first $25,000, and that level of income was a "comfortable" income in the '50's. It seems obvious that the poor and the middle class had little to worry about.
Despite the very high tax rates at the time, huge numbers of people became millionaires. The progressive tax rates were structured to encourage businesses and entrepreneurship. You had to have quite a huge income to get into those top tax brackets.
"The actual proportion of earnings citizens paid as income taxes in 1945 was far lower: for the poorest 20% of Americans, 1.7%; for the next 20%, 6.2%; for the middle quintile, 8.9%, for the upper-middle 20%, 10%; and for the wealthiest quintile, 20.7%. Tax rates have fallen since then: the current top level is 35% of income above $357,000, or $30,000 in 1945 dollars. Then the median family income was $2,379 per year. Brackets also have simplified (24 in the 1950s, just six today), yet the federal government takes in far more revenue than 60 years ago and citizens complain hugely about being over-taxed."
I would characterize the tax structure during those years as a resounding success.
(Score: 2) by NotSanguine on Friday November 13 2015, @11:05AM
I would characterize the tax structure during those years as a resounding success.
I would tend to agree. Thanks for the detail, Runaway. I appreciate it.
I was confused since the U.S. economy was going through its largest expansion *ever* during this time. Apparently, huge growth and prosperity for more Americans than ever before constitutes a failure according to some. I wonder what criteria could be used to assess the effects (in part, the US industrial base being the only one really functioning during this time really helped, as did the the monumental projects of rebuilding Europe, Asia and creating the domestic infrastructure that's now crumbling) of really high taxes on the richest people (with investment in growth and infrastructure being strongly incentivized) during the Eisenhower administration as a failure.
Hence my confusion as to AC's (apparently) unsubstantiated comment.
No, no, you're not thinking; you're just being logical. --Niels Bohr
(Score: 0) by Anonymous Coward on Friday November 13 2015, @04:45PM
Let's not be too sanguine.
The post-war administration was running with some unusual blessings as well as some unusual problems. Extrapolation from that to today is difficult to the point of impossibility.
Granted, the top marginal rate of income tax was very high, but it turns out to have been largely symbolic because that bracket actually didn't collect much money. It was a class warfare banner, not an actually significantly productive revenue plan.
Also, most of the growth at the time came from the blessings of demobilisation and a massive increase in the workforce, in education of GIs, and return of productive capacity in a country which had the incredible benefit of an intact industrial infrastructure after the war, and the economic nimbleness to take advantage of it. The super-rich of the day didn't need their incomes to swell their pockets, because they were coining it in so many other ways.
Today, we have a system much more based on financial instruments ranging from good ol' greenbacks through to exotic things like CDSes. Fewer people live in circumstances where they get much of anything except money (just look at the widespread urbanisation of the USA) and foreign competition for american industry is at an all-time high. Bracket creep has combined with various increased sales and other taxes applied by states and local authorities to take a much larger bite out of the grocery budget of many people who are struggling. People aren't complaining about being overtaxed because of the marginal rate they might pay on their last few dollars of total family income, but because of the totality.
The post-war government had the incredible luxury of taxing the world's go-to manufacturer, when the main drag on profit was how many widgets could be cranked out in a given week. Sane tax policy then is froth-mouthed insanity today.
(Score: 1) by J053 on Thursday November 12 2015, @08:36PM
(Score: 2) by etherscythe on Friday November 13 2015, @09:27PM
Gross revenue, or simply profit? Businesses with significant amounts of funds tied up in physical inventory or property, particularly with low operating margins, are going to be buried by gross income tax. And that's where it all gets messy.
I do like the nod to the idea that if corporations want to be treated like people, they don't get to pick and choose the factors that get applied, however.
"Fake News: anything reported outside of my own personally chosen echo chamber"
(Score: 1) by J053 on Monday November 16 2015, @11:37PM
(Score: 2) by acp_sn on Friday November 13 2015, @04:45PM
The retired pensioner should sell the big house and move into a smaller condo. The family should rent a room to a friend or relative. The real issue with "unproductive" property is the farm problem which I addressed in the voat post. tl;dr tax is negotiated and deferred on farms until the land/equipment is sold to a non-family member at which time it becomes due.
Remember the universal property tax REPLACES income taxes including payroll. Someone working 30 hours a week, 50 weeks a year at federal minimum wage is making about 12k. They are paying ~1.2k in federal payroll taxes (social security, medicare) even if they pay 0 on their 1040.
Assuming their rent went up by at least the proposed amount of 1.1% they would still have more money in their pocket. And that is the worst case scenario, a "middle class" family making a total of 50k a year and living in a 300k house would see a huge benefit.
The losers would be IP holders currently paying 0 for government protection of their property. Also the investment class would get a slightly lower rate of return. In exchange the vast majority of working americans would see their tax burden significantly reduced and the complexity of the tax code would almost disappear.
(Score: 0) by Anonymous Coward on Friday November 13 2015, @10:41PM
So let me get this straight. You want to tax all property. And your solution is that the retired pensioner should sell the big house and buy a small condo.
Quite aside from personal preferences, on which you're shitting from a great height, what if the pensioner is the nominal owner, but all those kids haven't left the coop yet? Make them all pay because ... they obviously have so much money (probably not or they actually would have left). The logic here is completely out of whack.
The other side of the coin is even worse. Now you're saying your pensioner needs to convert the form of the assets, but unless he/she/it sold at a substantial loss, the net taxes on cash + condo is pretty much the same as before, it's just more convenient to pay tax if you have lots of cash .... dwindling away with your plans.
It's also incredibly hostile to business development. You want to start a business? Prepare for MAXIMUM TAXAGE from day 1, because all that investment money is ... a taxable asset! Doesn't matter it'll take years to actually show a return, hope you got double the investment you needed just to keep your head above water.
It's hard to pick, but possibly the most ridiculous part of all this nonsense is that by deferring the tax value of a farm, you're actually making them desperately unattractive to buy. If the seller pays the taxes, the price has to skyrocket just to pay the tax bill. If the buyer has to pay, the price drops like a rock because otherwise it ain't worth paying. You may think that this is a theoretical problem, but it's practically demonstrated with logging properties today, where they get a tax break for remaining in logging use, but if turned to any other use they suddenly have a fat tax bill due, so vast tracts of logging land (not old growth forest, just plain paper mill trees) are basically trapped away from any other use because it's financially infeasible to make the change.
Making martyrs of anybody who has accumulated capital is completely counterproductive. Want to save for retirement? The tax man will take a bite every year. Want to save up to buy your dream house? The tax man makes it slower to save, and hurts you once you buy. Want to build a business? You'd better be doing crackerjack business from day 1, otherwise the tax man will put you out of business.
It's not even good for poor people. Rents will (have to) rise to make up for property taxes. With suppressed entrepreneurialism, jobs will be scarcer. With assets being taxed, you're discouraging long term planning and inhibiting enlightened policy.
Even if you just declare that you only want to do this for actual physical acreage, you're discouraging the hell out of anything that looks like farming, and suddenly being a landlord is the ninth circle of hell. Never mind that a farmer (or whoever you love so much) can negotiate deferrals, people don't live forever and farm planning happens on more or less a thirty year cycle. If you're not pretty darned convinced that your farm's return will absolutely, for totally sure, cover all your taxes for decades to come? You'd be crazy to get into it.
Fortunately, there is some good news: landlords are filthy subhuman scum who deserve to be hanged from the nearest available lamppost, and farmers are all reactionary redneck shitstained pigfuckers, and the world doesn't need either of them. So that's all right.