[fredgrott]

the biggest impact of such for such corporations is the removal of the foreign income tax credit as is also makes it somewhat uneconomical to attempt pet to doge taxes vis the high tech gambits of underpricing a virtual IP and selling it to another controlled corporation to hide revenue in at the lower tax rate

In fact is has been recommended by most economists

[kenneth]

I don't see how taxing foreign income would work. A corporation would just spinoff foreign business to avoid it. If you tax those it'd just reincorporate offshore. The USA simply can't tax the foreign income of a foreign company.

[Sanzig]

If any nation on Earth can pull this off (or a wealth tax for that matter), it's the USA. The reach of the US financial system is immense: blocking off access or otherwise making life miserable for companies that attempt to offshore operations on paper is certainly something the US could do if it has the political will.

In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders. This was extraordinarily unpopular with other countries: I'm in Canada, and the amount of negative press was astounding. In addition to privacy concerns (the law applied to dual-citizens, including "accidental Americans" who didn't know they held US citizenship), implentation proved to be very expensive for foreign banks.

However, the US played hardball: if a financial institution was non-compliant with the provisions of FATCA, the US government took 30% of any payments made to them as tax. There was tons of grumbling, but foreign financial institutions went ahead and implemented it.

To add insult to injury, the US is itself not compliant with FATCA, as the information sharing is supposed to be reciprocal if a foreign country signs a reciprocal treaty. That has not happened.

Access to the US financial system is an extraordinarly big stick when the US government chooses to wield it. It's often said that preventing offshoring or creating a wealth tax is impossible without global buy in. Really, the US could do it if it wanted to. It would not be popular, but FATCA shows there's precedent.

[1] https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...

[CaptainZapp]

> In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders.

With the unintended side effect that it can make it incredibly hard, if not impossible, for an American citizen to open a bank account in another country. Even if she's a resident in that country.

[candiodari]

It'll still only work if tax policy is globalized. As long as there are tax havens this cannot operate. And the appeal of being a tax haven for small nations is incredible.

In most places (e.g. Luxembourg, Basel, Lichtenstein, ...) the "pick your favorite tax scheme" game is tolerated (in Basel you can have your pick of 3 tax schemes. Anything agricultural goes for the French scheme, most of the rest, especially medical technology, for the Swiss one, Car companies like their German tax (I'm guessing to avoid import tax)). And while not quite as impactful, it's still tolerated at e.g. the French-German border.

And of course there is the "European exception". EU countries each have their tax policy set so "their" company doesn't get taxed. Even the EU proper has such a company (Airbus). But individual countries do as well: the Netherlands has Shell, France has Total, Belgium has lots of government non-government companies (e.g. Sita, Eurocontrol, BICS, who are "Belgian" but multinationals ...). The incumbent telecom is usually beneficiary of such schemes as well, as well as large medical concerns.

And I would like to point out: one thing FATCA (+the preexisting international income tax the US has) has done is make it much more difficult, much less worth it, for US citizens to work abroad. Do we really want that ?

[Chris2048]

It's one thing to talk of equality, in the context of say the US, but what of international equality?

Being a tax haven is arguably how small nations achieve this. The US has a large unfair advantage in terms of economy - has done since at least WW2.

America skews heavily in favour of freedom - for Americans in America, not so much outside that system.