[hellow0rldz]

Thank God the US is taking charge of the GLOBAL finances. What could go wrong!?

This is ladder pulling. Who needs smaller countries competing on fiscal rates when all tech should be registered in Dellaware?

Note how it's a small 15% to start with. If this goes through and all the treaties are in place moving it to 25% should be much easier.

Maybe the US should investigate all the creative ways US corporations pay so little tax anywhere. It's a problem caused by US and US corporation and now they come to provide a solution.

[germinalphrase]

“It's a problem caused by US and US corporation and now they come to provide a solution”

Shouldn’t the responsibility for US corporate problems be (presumably) addressed by the US government? I’m not understanding your point here.

[hellow0rldz]

Precisely. But instead of solving this problem inside US they want to re-engineer the whole globe.

Most countries are mad about multinationals, most of them rich US multinationals. If the US would do a proper job of taxing their own corporations none of this would be necessary.

Interesting how this is just in time for the Dutch sandwich scheme to expire. Clearly something else was missing!

[coliveira]

Yes, the US knows the exact amount their corporations are NOT paying taxes on. Just apply a tax and be done. Instead, they want to define what other countries will do, in order to fix the US tax leaks. I see this more as another attempt to control other countries than a real tax proposal.

[onlyrealcuzzo]

How else do you solve this in the US?

Company A sells all of its IP to Ireland. They have the Irish company charge them 100% of the profits for IP. Poof. No US taxable income.

What's your magic beans solution for this beside what the IRS plans to do?

[pseudo0]

Why not just cut the corporate rate to 0 and raise the necessary funds through a VAT? No amount of fancy accounting tricks will eliminate companies' dependence on the US consumer market.

[onlyrealcuzzo]

Because the Federal government doesn't have a sales tax?

This system is easier than getting all 3 branches of the government to impose a VAT.

And also, that doesn't solve the problem.

If you're Apple - you have only pay taxes on your sales in the US.

If you're a smaller company, you pay taxes on all your profits, plus a VAT on your sales in the US.

[pseudo0]

What's stopping the federal government from implementing a VAT? I realize there's a ton of legal and political inertia, but theoretically it seems like it would be an improvement.

In an ideal system everyone would charge a VAT rather than a corporate tax, resulting in a level playing field for foreign profits as well.

[coliveira]

It is very simple: just make corporate profits for US corporations (or more sensibly, the difference in taxes) taxable on the US, wherever it is made. This is already the rule for individuals.

[onlyrealcuzzo]

"Wherever it is made" is simple when it comes to tech.

And, anyway, almost nothing tech is made in the US.

The IRS has a (separate?) issue to deal with this - that countries will pay tax primarily based on the country where the sales take place.

[ericmay]

Could you walk us through your proposed solution? Like what the United States could be doing that would be a proper job of taxing its own corporations?

[thrill]

Set guaranteed tax rates that make keeping money in the US attractive instead of trying to punish those who find the business practices of other sovereign nations offering better treatment.

[klyrs]

Does this mean reducing taxes to 0%, so that corporations don't need to jump through hoops to get the same effect in other jurisdictions?

[toast0]

What does a proper job of taxing US corporations look like?

Currently, US corporations have a minimum tax of 10% on global income or 20% on US income; sounds like the numbers are proposed to change to 15% and 28% (or something; NYT paywall is loading too fast today, and it's a proposed law so the details aren't set and not worth fighting over); and the US is saying hey, these guys are going to pay 15% on income from your country, you may as well have them pay it to you instead.

The AMT on global income was part of the Trump tax changes, and is a departure from the full corporate rate on global income, but only due when/if money made it back to the US.

I imagine a next step would be charging multinationals headquartered elsewhere but operating in the US the AMT on their global income. That's kind of far reaching though, so if they can get a few major countries on board instead, that's better.

[paul_f]

It is overly simplistic to think of a global company, such as Oracle, or Coca Cola, as a single monolithic US corporation. They have literally hundreds of subsidiary companies all over the world, manufacturing and selling into different markets.