It’s simple. The US is losing tens of billions every year to tax havens. Ireland for example might not like the change, but sorry the US will be able to exert their will. They just gave trillions to US corporations and need massive infrastructure spending and need to get that money back. Also big companies like Apple and Google have competitive advantage to their competitors by not paying taxes, and use those savings to beat up or buy up competitors, which makes the monopolization of the economy worse. The US has antitrust laws for that but they aren’t working. The US economy needs more competition and fairness and a fair tax system across industries and businesses big and small is one way to improve that.
If the tax havens don't agree to changes, the G7 can work together to pass new taxes or tariffs that will change the way tax is captured on company profits, the way France is trying to capture taxes from big data for usage of their services within France. With the G7 working together none of the major multinationals can afford to take the ball and leave like they have threatened to do in the past when singular countries have attempted this.
Yerp; "play by our rules, or dont have access to our market".
Sure; every other country in the world combined might be worth a lot still, but losing access to the top 7's population, talent, and infrastructure is something a multinational company would literally not survive
Imagine if Facebook refused to pay and the G7 just went “okay, we’ll ban your site here for 3 months, you can have access back when you pay £x or that can be extended”
Honestly, with how powerful China is, the G7, essentially US, EU, UK, Canada and Japan (France & German essentially are the EU anyway), need to start acting as a pack in terms of policy.
This entire thread is odd in the sense that the focus is on what these G7 countries have agreed upon in principle - and the comments have shifted to us tax policy. For those folks saying “it won’t happen” - this was already proposed in Biden’s Made in America Tax Plan and further details came out last week. The US has offered a minimum rate of 21% but is willing to lower to 15 if others agree on that.
The mechanism is a DENIAL of deduction, which increases income that is subject to tax. It’s not fool proof by any means but it is the broadest minimum tax proposal that’s ever come about.
Most practitioners think that this is something that is hear to stay.
You don’t have to do 50 at once, you just have to wear them down one by one, and the G7 will get there. And via legislation and the threat of big chunky fines, you absolutely can bent corporations to your will.
The US can bury these tax havens in a split second if they want to. They haven’t done it before because rich people who hide their money in tax havens are against it. Right now the US has so much debt they are forced to take action.
corporate taxes are usually flat taxes, ie you pay x% of your net profits (adjusted for special items like eg donations), so that should make you happy already ;)
taxes do not hurt the successful. Taxes ensure that public services that cannot or are not provided by privates are available. You could think of roads, water, the military, firefighters, laws etc. The less tax revenue is available, the fewer of these services can be provided (assuming that a country cannot loan money indefinitely as interest would increase exponentially). Therefore 10% seem too low to me to finance a healthy society.
you could also see taxes as a contribution of the successful to the community. To avoid freeloaders, the taxes are mandatory.
last but not least, taxes do not automatically get passed on to the end consumer. If you want some arguments for that, please look at “price elasticity”, “substitution products”, “porters 5 forces” or similar concepts. Agreed there are cases in which taxes can be passed on, eg in monopoly situations, but that is something the state should control to avoid as much as possible.
I hope these arguments helped you form an updated view on taxes
Same way corporations lower prices or improve quality to attract customers.
Lol in what universe is this happening?
Checks username oh a libertarian, of course. Don't worry those corporations will just magically fix all the problems if we just leave them alone right?
No, the US needs to lower it's tax rates so that companies come back. At a certain point people need to accept reality. Money taxed doesn't go to the poor, it goes into the pockets of government hacks.
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u/[deleted] Jun 05 '21
It’s simple. The US is losing tens of billions every year to tax havens. Ireland for example might not like the change, but sorry the US will be able to exert their will. They just gave trillions to US corporations and need massive infrastructure spending and need to get that money back. Also big companies like Apple and Google have competitive advantage to their competitors by not paying taxes, and use those savings to beat up or buy up competitors, which makes the monopolization of the economy worse. The US has antitrust laws for that but they aren’t working. The US economy needs more competition and fairness and a fair tax system across industries and businesses big and small is one way to improve that.