[developer2]

1. This is why capitalism built on "everything to maximize revenue for shareholders" is broken. Maximize revenue by generating more revenue, not by evading - or avoiding - taxes. If your company cannot remain afloat without dodging taxes, your business is not viable and does not deserve to exist.

2. The fact that you can "game the system" and remain squarely in the "legal" column makes the system broken.

3. Considering that fines are typically a fraction of what they should be, again the system is broken. Consequences should threaten the ability of a company to remain afloat, not be a slap on the wrist that doesn't even dent the bottom line.

4. You perform business in a country? Pay the taxes for all revenue factually originating in that country, not technically based on loopholes. If revenue originates from a customer/client/subsidiary in country X, you pay taxes in country X; you don't get to have customers in country X, but pretend like your business in country Y really took their money. Simple as that.

5. Exactly this. The fact that it is not intended, but is possible, makes the system broken.

Governments need to crack down on this sort of thing - HARD. The laws need to be rewritten from the ground up, but this will never happen because of another ugly facet of capitalism - at least in the US - lobbying. Also, self-interested politicians - how many of the politicians who could rewrite the laws have their own businesses that are avoiding taxes which implies a conflict of interest? Large companies that threaten to abandon doing business because state X or country X makes them pay tax? Farewell, we don't need you. This also applies to incentives, which some states are famous for. Individual states should not be competing for companies' business by reducing taxes or offering reimbursement programs.

[FollowSteph3]

Although great in theory how do you collect the pay the taxes for revenues collected in every country? A big business like Google can handle this but a smaller business will be crushed by it. Imagine a 1-2 person. Imagine a 1-2 person business selling online. Are they capable of paying taxes in a hundred countries? That burden alone would crush them. Try managing the tax rules for 100 countries as a 1-2 person shop. Good luck.

Ignoring that who will enforce it? If say a Russian owes taxes to the US how will they get the payment if the person doesn't want to pay?

But even then why should the taxes go to that country? All the infrastructure to allow your business to operate in the first place is in your country. The roads to get your employees to work etc.

That being said if your going to open factories or offices in another country than I believe you should be required to have a corporation in that country and pay taxes in that country for the revenues those entities make. But even that is challenging. It's honestly a very hard issue to resolve...

[FollowSteph3]

Also just to add to the complexity what happens for online websites. If you're from Australia and visit Google and the server is in the US and you click on an ad, the a houldnt the revenue, and hence taxes, be paid in the US because the server is located in the US. That's were the revenue was made. Assuming that's true then wherever you host the server is where you should be taxed. And in that case certain countries would be more beneficial to put your hosting servers in.

Basically all I'm saying is that it's not an easy problem and there are no easy and obvious answers :(

[MR4D]

I up-voted this because it highlights the legal issue so clearly to any of us techies.

Clearly the tax has to be paid somewhere, and I'll bet every jurisdiction has an argument why theirs is the right place to collect it. No wonder tax or trade treaties take so long to negotiate.

[mhenr18]

> Try managing the tax rules for 100 countries as a 1-2 person shop. Good luck.

The same justification could be made for accepting international credit card payments online, but companies like Stripe are happy to provide you with a service that takes away the hassle. If they can do that, then I'd say they would be perfectly willing to solve the local tax problem for you.

[yummyfajitas]

* You perform business in a country? Pay the taxes for all revenue factually originating in that country, not technically based on loopholes. If revenue originates from a customer/client/subsidiary in country X, you pay taxes in country X; you don't get to have customers in country X, but pretend like your business in country Y really took their money. Simple as that.*

You seem to be wanting a consumption tax rather than an income tax. This is known by economists to be the least distortionary tax, for the exact reason you argue.

It's also highly criticized by left wing types since it taxes people in proportion to the benefit they receive from society rather than what they produce for society. Typically poor people consume more than they produce, while rich people produce more than they consume.

Large companies that threaten to abandon doing business because state X or country X makes them pay tax? Farewell, we don't need you.

Except that very often, we do. Just look at Austin - as a result of their little feud with Uber/Lyft, they are now providing below sub-developing world level services.