Janet Yellen to call for unified global corporate tax rate

Sithara007

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Quote from: aesma on April 26, 2021, 04:48:14 PM

Bezos has given plenty of shares to his ex wife (not by choice) and also sells stock every year to fund Blue Origin, his rocket company, to the tune of 1 billion a year.

Stocks go up but bond yields don't, US pensioners usually rely on bonds not stocks.

If that is true, then I am wrong and sorry for that. The 1 billion per year sale still represents only around 0.5% of his net wealth. And in case the tax is increased, there is a good chance that he will postpone his plans to sell these stocks.

Now another proposal that has been suggested by some of the Pacific Coast Democrats is to tax unrealized capital gains. They say that this will prevent people like Bezos sitting on top of $200 billion worth of stock and still paying zero tax on it. But now comes the important question. Perhaps you are implementing a tax on unrealized capital gains of let's say 4%. Bezos need to pay $8 billion as tax. But there are a lot of people who have unrealized losses. If the government is taxing unrealized gains, then they need to reimburse (a part of) the capital losses as well.

aesma

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Bezos has given plenty of shares to his ex wife (not by choice) and also sells stock every year to fund Blue Origin, his rocket company, to the tune of 1 billion a year.

Stocks go up but bond yields don't, US pensioners usually rely on bonds not stocks.

Sithara007

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Quote from: aesma on April 25, 2021, 07:03:18 PM

Sithara007 : first of all this new corporate tax rate is only for people earning more than 1 million dollars a year. Granted, these people are the ones who own the majority of the stock market, but that's precisely a problem they also want to fix. You can't look at the stock market going up and up and up and conclude the economy is doing great, if most people don't benefit at all from that rise.

Considering what Biden wants to pay with the money raised, it's possible a state like California could end up lowering its own tax, since the federal government would now pay for things that California used to spend money on.

The majority of the stock market is owned by pension funds and mutual funds and therefore any decline in the stock prices will disproportionately impact the pensioners and the middle class. Obviously billionaires own a large share of the stocks, but they hardly sell them in unfavorable circumstances (so there is no question of capital gains tax). For example, Jeff Bezos own around 10% of the Amazon shares and he hasn't sold any of his stocks for the last two decades. They can afford to wait, until a Republican president is elected to power. But the middle class and pensioners can't afford to wait more than 4-5 years.

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Quote from: perfect999 on April 25, 2021, 05:24:16 PM

Some countries will always have a lower corporate tax just to get companies interested, not everyone is USA and have enough money to print trillions of dollars worth of money and end up being in the profit anyway, so many nations drop the corporate tax to minimum, even zero at times to attract money from other places. Hell if I had Facebook in my nation, I would charge them zero money for being here, even help them pay for some stuff, why? Because that would mean there would be a company worth hundreds of billions of dollars in my nation and that profit comes into my nation from outside, and they are hiring tens of thousands of workers, and they are getting headquarters, basically there are tons of things I can list that the nation would benefit from.
Long story short corporate tax can never be the same in every nation, some poor nations will try to attract rich companies one way or another.

Each country acts by virtue of its own principles and its own capabilities, and if the capabilities and principles allow, then it is possible to reduce the corporate tax. Another question is that the current multinational corporations are a very complex phenomenon and a simple reduction in corporate tax does not mean the transfer of the parent corporation to your jurisdiction along with all the staff. The question is very complex and ambiguous, because let's say the same Facebook just opens a nominal office with a minimum of staff for the sake of paying taxes, and the main activity will still be conducted in a convenient country.

aesma

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Sithara007 : first of all this new corporate tax rate is only for people earning more than 1 million dollars a year. Granted, these people are the ones who own the majority of the stock market, but that's precisely a problem they also want to fix. You can't look at the stock market going up and up and up and conclude the economy is doing great, if most people don't benefit at all from that rise.

Considering what Biden wants to pay with the money raised, it's possible a state like California could end up lowering its own tax, since the federal government would now pay for things that California used to spend money on.

perfect999

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Some countries will always have a lower corporate tax just to get companies interested, not everyone is USA and have enough money to print trillions of dollars worth of money and end up being in the profit anyway, so many nations drop the corporate tax to minimum, even zero at times to attract money from other places. Hell if I had Facebook in my nation, I would charge them zero money for being here, even help them pay for some stuff, why? Because that would mean there would be a company worth hundreds of billions of dollars in my nation and that profit comes into my nation from outside, and they are hiring tens of thousands of workers, and they are getting headquarters, basically there are tons of things I can list that the nation would benefit from.

Long story short corporate tax can never be the same in every nation, some poor nations will try to attract rich companies one way or another.

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Quote from: Obito on April 24, 2021, 08:20:31 AM

Quote from: aesma on April 21, 2021, 06:27:47 PM

What Yellen is mainly concerned about is that US companies pay their fair share of tax. If some countries don't implement the minimum corporate tax, it's not a problem, the US can declare that no US company has the right to have a presence in such a country.

That's impossible, a politician that isn't lobbied by corporations so they can continue to exploit the working class. I don't think that companies are going to like the idea of moving out of a country because of the tax laws in place, getting out of that country is going to hurt them real bad.

The thing is Janet Yallen is bought by companies as much as any politician, however Biden administration has provided time and time again the fact that they are moving a bit more further left, there is nothing else to do but to charge companies a bit more tax otherwise regular folk will not even have money to keep those companies alive anymore. You think amazon could continue operations perfectly making tens of billions of dollars forever?

If things are not looking good for regular folk that means they will stop buying stuff from Amazon as well, which means profits down for them, this is just an example for one company, it is true for all the companies in the nation. Politicians from both parties are still bought by companies, but the world can't continue to operate like this for a long time, it is just not possible and that is why things are moving with higher taxes nowadays.

Vishnu.Reang

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Quote from: Xinarae* on April 25, 2021, 12:45:38 AM

The reason for banning corporate rates is that it is difficult to attract investment if corporate rates are high. Entrepreneurs in this country have to pay a large part of their income as tax however the rate at which middle-income countries have reduced corporate taxes over the past three decades has made it easier to do business but here corporate tax is used to increase revenue. So even though there is talk of reducing corporate taxes before the budget every year the national board of revenue backs down every time.

For the governments, it is a very difficult decision to make. Here in India, the corporate taxes used to be around 35%-40% a few years ago. After the right-wing government came to power, it was reduced to 25%. Obviously this resulted in a lot of companies shifting their manufacturing units from China to India and the creation of a large number of employment opportunities. But still, reducing corporate tax alone is not enough. Foreign investors claim that the issue of corruption/red-tape is much worse in India when compared to the situation in China.

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The reason for banning corporate rates is that it is difficult to attract investment if corporate rates are high. Entrepreneurs in this country have to pay a large part of their income as tax however the rate at which middle-income countries have reduced corporate taxes over the past three decades has made it easier to do business but here corporate tax is used to increase revenue. So even though there is talk of reducing corporate taxes before the budget every year the national board of revenue backs down every time.

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The latest proposal from Biden is to rise the long-term capital gains tax and make it on par with the income tax. And someone has already pointed out that if this stupid plan is implemented, then in some of the cities those who fall in the top-slab will be paying close to 60% of their capital gains as tax.

https://twitter.com/JaredWalczak/status/1385315212081963010

Now what is going to be the next demand? I guess Yellen will ask for a unified global capital gains tax as well? In most of the sane countries, capital gains tax are in the 10%-20% range. Here in India, it ranges from 0% to 10%. I know a lot of people want to make capital gains tax on par with income tax. IMO, it is never practical, because if the government want to do that then they should reimburse the capital losses (the option of carrying forward the losses is useless).

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Quote from: aesma on April 21, 2021, 06:27:47 PM

What Yellen is mainly concerned about is that US companies pay their fair share of tax. If some countries don't implement the minimum corporate tax, it's not a problem, the US can declare that no US company has the right to have a presence in such a country.

That's impossible, a politician that isn't lobbied by corporations so they can continue to exploit the working class. I don't think that companies are going to like the idea of moving out of a country because of the tax laws in place, getting out of that country is going to hurt them real bad.

Vishnu.Reang

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Quote from: aesma on April 22, 2021, 08:09:46 AM

Theses companies (Amazon, Google, Facebook, etc.) are already banned from China, so that wouldn't change much for them. There is Apple, but they can afford to pay the tax.

Google and Facebook are banned in China, as the local competitors (Baidu and WeChat) have a complete monopoly. As far as I know, Amazon isn't blocked in China, but they geo-restricts users from that country. So here you are right. But China remains one of the largest markets for Apple (and one of the fastest growing markets as well). And it won't be fair to ask Apple to pay taxes in US, for their revenues in China. And let's not forget that most of the components for the manufacturing of iPhone, iPad.etc comes from the Chinese manufacturing units.

aesma

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Theses companies (Amazon, Google, Facebook, etc.) are already banned from China, so that wouldn't change much for them. There is Apple, but they can afford to pay the tax.

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Quote from: Sithara007 on April 22, 2021, 12:14:35 AM

Quote from: aesma on April 21, 2021, 06:27:47 PM

What Yellen is mainly concerned about is that US companies pay their fair share of tax. If some countries don't implement the minimum corporate tax, it's not a problem, the US can declare that no US company has the right to have a presence in such a country.

LOL.. I don't think that the American government would be stupid enough to take such a step. For many of the American companies, a large part of the revenue comes from global markets. If they are not allowed in the global markets, then Chinese or Japanese companies will fill the vacuum. No one is having any issue with the American government taxing American companies. The problem arises when the American government want to dictate how foreign governments tax foreign companies.

Indeed, the risk is very clear if the US is so strict in this tax policy, the risk is a warm opportunity for competing countries, especially China, which is indeed a trade rival for the US. This should be very concerned about, because during Biden's leadership several policies focused directly on taxes. The rich tax even the corporate tax. This is a policy that has been stalled for a long time but has only just been executed.

Sithara007

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Quote from: aesma on April 21, 2021, 06:27:47 PM

What Yellen is mainly concerned about is that US companies pay their fair share of tax. If some countries don't implement the minimum corporate tax, it's not a problem, the US can declare that no US company has the right to have a presence in such a country.

LOL.. I don't think that the American government would be stupid enough to take such a step. For many of the American companies, a large part of the revenue comes from global markets. If they are not allowed in the global markets, then Chinese or Japanese companies will fill the vacuum. No one is having any issue with the American government taxing American companies. The problem arises when the American government want to dictate how foreign governments tax foreign companies.

aesma

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What Yellen is mainly concerned about is that US companies pay their fair share of tax. If some countries don't implement the minimum corporate tax, it's not a problem, the US can declare that no US company has the right to have a presence in such a country.

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Quote from: Mauser on April 19, 2021, 06:37:50 AM

Quote from: hulla on April 19, 2021, 06:11:03 AM

President Trump makes a wonderful decision by reducing the corporate tax to 21% and in the season when the pandemic has caused alot of damage there's a need for an increase of corporate tax but the 28% seems too big and I think 25% will still be fair.

I don't understand the rules and regulations the G20 nation use to operate but countries like Puerto Rico will suffer if they comply with the plan to increase global corporate tax and I don't think it will fair to them if they are forced to comply.

I don't think it's possible to find a solution for all the G20, even if 18 or 19 countries agree then there are a lot of advantages for one country to disagree. Money doesn't know borders and will always relocate to the most attractive countries. There are so many loopholes in tax laws which is why the big tax consultantancies are making so much money. In my opinion the best approach would be to simplify the tax laws tremendously. But this seems utopic at the moment.

It every possible for a number one country to find a solution for all the G20 and it will hard for any the countries in the G20 to disagree if 18-19 have already agreed to the new bill. As you said the best opinion is to simplify the tax law which I think is what they will all later arranged on.

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Quote from: jaberwock on April 19, 2021, 02:39:47 PM

You guys have to remember, these are people who are in for regulations and they like it, that is why they are trying to put regulations on crypto, but there is no ban, there will never be a ban, look at Coinbase, they had their IPO just recently, you think there could be a ban on that?

To be fair, Janet Yellen sounds too grumpy and frustrated. Ever since taking office, she has made two statements which make no sense. First one related to "controlling" cryptocurrency and the second one demanding a global minimum level of corporate tax. Both the suggestions can't be implemented in reality. Former president Trump sounded insane at times, and was widely ridiculed by the media. But he kept these lunatic people out of office for four years and I need to give him credit for that.

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You guys have to remember, these are people who are in for regulations and they like it, that is why they are trying to put regulations on crypto, but there is no ban, there will never be a ban, look at Coinbase, they had their IPO just recently, you think there could be a ban on that?

Bitcoin will always be free and legal in USA, there will be stricter laws to purchase or use it that is for sure, but KYC is for that exact reason as well, which means at the very worst case Janet will do something that will add one more picture to KYC, or another document, like maybe required social security number or something, in order to prevent it, and everyone who uses coinbase (or similar places) to be sharing their information to a super high level, and all of their movements will be tracked by coinbase and notified to SEC or some place I suppose (could be IRS, or different) and that is understandable because they want the same for everything, so not a shock they would want that for BTC.

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Quote from: aesma on April 19, 2021, 07:38:21 AM

What do Bahrain, Qatar or Kuwait bring to the world ? Do they make Nobel peace prize scientists ? Do they advance peace ? Do they even treat people living in these countries well ?

These countries can't exist and can't function without real countries doing the real work. Hence, freeloaders.

Dude, you have no idea what you are talking about. If that is the case, then let me ask you what do the United States bring to the world, apart from invading and bombing third world nations? Since they spent $1 trillion to bomb Afghanistan, $2 trillion plus to bomb Iraq, and an unknown amount to bomb Syria, what is the guarantee that this increased tax revenue won't be used to bomb some third world nation? And since when the Nobel Peace Prize (which was given to politicians like Barack Obama and Al Gore) became a measurement to productive contribution? The question is not about Nobel Peace Prize, but about the corporate tax.

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