G7 reach deal to tax big multinational companies

[An Alan Smithee Nation]

https://www.bbc.co.uk/news/world-57368247

https://www.reuters.com/business/g7-nat ... 021-06-05/

The G7 group of advance economies has reached a "historic" deal on taxing multi-national companies, the UK's Chancellor of the Exchequer, Rishi Sunak says.

Finance ministers meeting in London agreed to commit to the principle of a minimum corporate tax rate of 15%.

Tech giants such as Amazon and Google could be among the companies affected.

The move could see billions of dollars flow to governments to pay off debts incurred during the Covid crisis.

The deal - from the US, UK, France, Germany, Canada, Italy and Japan - will put pressure on other countries to follow suit, including at a meeting of the G20 next month.

Mr Sunak said the agreement was designed to create a level playing field for global companies.

"After years of discussion, G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age," he said.

I think this is a good step forward, and I hope the precedent is followed by other countries. The FANG companies have been getting away with paying tiny amounts of tax in countries where they make their money by having HQs in places where they are lightly taxed. A united front like this is a good thing. What says NSG?

[Greater Cosmicium]

Nothing will change, the corporations will just find more loopholes and begin using... perhaps less ethical methods to avoid paying their rightful share. Gonna bet they'll also give a large "donation" to certain interest groups to get this (unacceptably low) minimum tax rate axed before it can even take effect.

[Ethel mermania]

I dont know if i like it or not for a few reasons. I wonder how they are going to enforce it? Its going to hurt smaller countries that are the tax havens like Ireland.


As to revenue; revenue earned in a country should be taxable by that country so i support that piece of it.

[Picairn]

Good. Yellen's project is coming to fruition.

[An Alan Smithee Nation]

I dont know if i like it or not for a few reasons. I wonder how they are going to enforce it? Its going to hurt smaller countries that are the tax havens like Ireland.


As to revenue; revenue earned in a country should be taxable by that country so i support that piece of it.

I am guessing they will enforce it with massive fines and being banned from access to markets.

[Nation of Ecologists]

Neoliberals deciding to tax neoliberalism is a prime example of how twisted the modern world is.

[American Pere Housh]

I dont know if i like it or not for a few reasons. I wonder how they are going to enforce it? Its going to hurt smaller countries that are the tax havens like Ireland.


As to revenue; revenue earned in a country should be taxable by that country so i support that piece of it.

I am guessing they will enforce it with massive fines and being banned from access to markets.

Not enforceable in the United States as tax authority lies solely with Congress.

[An Alan Smithee Nation]

I am guessing they will enforce it with massive fines and being banned from access to markets.

Not enforceable in the United States as tax authority lies solely with Congress.

Well the US are signed up to it, so I guess they have some way of enforcing it in their own country.

[The Derpy Democratic Republic Of Herp]

A good start. Needs to be bigger.

As a general reminder, big corporations are mostly dick sucking assholes who need to be taxed to oblivion.

[Ethel mermania]

I am guessing they will enforce it with massive fines and being banned from access to markets.

Not enforceable in the United States as tax authority lies solely with Congress.

If it's a treaty the senate will have to approve. (And US rates already comply)

[American Pere Housh]

Not enforceable in the United States as tax authority lies solely with Congress.

Well the US are signed up to it, so I guess they have some way of enforcing it in their own country.

And Congress would still have to pass it as the U.S. Constitution clearly states that only Congress can pass tax legislation. Biden can't unilaterally say we are going impose a 15% tax on multinational companies plus this sounds alot like a treaty and if thats the case, 2/3s of both houses would have to approve such a measure.

[Northern Socialist Council Republics]

Well the US are signed up to it, so I guess they have some way of enforcing it in their own country.

Since when does the US care about abiding by its treaty obligations?

---

I'm enthusiastically in favour of schemes like these and I hope to see more aggressive measures along the same lines in the future. I've long argued that the world needs international standards of economic regulation.

[Ethel mermania]

A good start. Needs to be bigger.

As a general reminder, big corporations are mostly dick sucking assholes who need to be taxed to oblivion.

Then no large project ever gets done. You need a billion dollar contractor to build a billion dollar subway line.

[Ethel mermania]

Well the US are signed up to it, so I guess they have some way of enforcing it in their own country.

And Congress would still have to pass it as the U.S. Constitution clearly states that only Congress can pass tax legislation. Biden can't unilaterally say we are going impose a 15% tax on multinational companies plus this sounds alot like a treaty and if thats the case, 2/3s of both houses would have to approve such a measure.

I will try this again..

Under Trump the corporate tax rate is 21%. 21 > 15.

2. Only the senate votes on treaties.

[Borderlands of Rojava]

Watch these countries not actually raise taxes on Amazon. It isnt like this hasn't happened before where the UN "reached a deal" to do something and then didn't do shit (climate change).

[American Pere Housh]

Watch these countries not actually raise taxes on Amazon. It isnt like this hasn't happened before where the UN "reached a deal" to do something and then didn't do shit (climate change).

What is this climate change you speak of?

[Arisyan]

While I agree wholeheartedly with this, I am doubtful it will actually happen, given that the G7 usually is a big defender of these corporations. I will be impressed if they do actually raise taxes on multinational companies.

[Northern Socialist Council Republics]

While I agree wholeheartedly with this, I am doubtful it will actually happen, given that the G7 usually is a big defender of these corporations. I will be impressed if they do actually raise taxes on multinational companies.

Most of these countries already have corporate tax rates above the minimum floor set by this agreement. It's not really a substantive measure.

I'm just happy because, well, it's something.

[An Alan Smithee Nation]

While I agree wholeheartedly with this, I am doubtful it will actually happen, given that the G7 usually is a big defender of these corporations. I will be impressed if they do actually raise taxes on multinational companies.

Most of these countries already have corporate tax rates above the minimum floor set by this agreement. It's not really a substantive measure.

I'm just happy because, well, it's something.

It really becomes something if they can persuade the G20.

[Ethel mermania]

Then no large project ever gets done. You need a billion dollar contractor to build a billion dollar subway line.

I'm not sure why. The subcontractor who owns and operates the boring machine has to be fairly big (the machines are expensive) but why do they and the other contractors need to be all subsidiaries of one billion-dollar corporation?

Huge corporations do have one advantage I can see: they save money by "self-insuring". But that's not enough to make them indispensable for big jobs.

The bonding we require for large projects, I think, doesn't allow self ins. The GC can be smaller if they sub out everything else, but the ability to pay your staff for years before the contract pays out. ( and for others readers: contracts get paid out in milestones so they can pay folks, when all the architectural drawings are approved is one).

But still the upfront costs are massive. Look at the creation of fed ex, billions of dollars had to be spent to build up their infrastructure before the first package could be delivered. Small companies can't do that.

[Ethel mermania]

While I agree wholeheartedly with this, I am doubtful it will actually happen, given that the G7 usually is a big defender of these corporations. I will be impressed if they do actually raise taxes on multinational companies.

Most of these countries already have corporate tax rates above the minimum floor set by this agreement. It's not really a substantive measure.

I'm just happy because, well, it's something.

What could be interesting is how revenue is booked. Both Microsoft and Google have massive server farms in Ireland that serve the US market. Where do you book the advertising and hosting revenue from those servers? US or Ireland?

[Ethel mermania]

The bonding we require for large projects, I think, doesn't allow self ins. The GC can be smaller if they sub out everything else, but the ability to pay your staff for years before the contract pays out. ( and for others readers: contracts get paid out in milestones so they can pay folks, when all the architectural drawings are approved is one).

But still the upfront costs are massive. Look at the creation of fed ex, billions of dollars had to be spent to build up their infrastructure before the first package could be delivered. Small companies can't do that.

OK. And why do mega projects (not just in the US) so often go way over budget? Are they extorting the buyer with sunk costs, or was the initial quote way too low in order to secure the contract?

Bad question, I can teach a college course on this.

Lots of reasons, let's just pick one, Change orders for 1. A 5 year contract for example has equipment in it that becomes obsolete, so an authority has to change it out before its installed. It becomes a change order. While the initial contract may have been estimated at cost + 7%, because competition. A change order only goes to the contractor who won the initial bid. They get to price it, and its a single source as the authority your screwed. The More change orders, the more overruns and delays while they are being negotiated.

[The Blaatschapen]

Good, and if Germany needs a person to spend the money on, I am available.

[The Nihilistic view]

I dont know if i like it or not for a few reasons. I wonder how they are going to enforce it? Its going to hurt smaller countries that are the tax havens like Ireland.


As to revenue; revenue earned in a country should be taxable by that country so i support that piece of it.

I am guessing they will enforce it with massive fines and being banned from access to markets.

It's just a gentlemen's agreement really. Also 15% is lower than all the G7 current corporate tax rates.

So nothing is actually going to come from this for years. Non G7 countries will just continue as they have been.

[The Derpy Democratic Republic Of Herp]

A good start. Needs to be bigger.

As a general reminder, big corporations are mostly dick sucking assholes who need to be taxed to oblivion.

Then no large project ever gets done. You need a billion dollar contractor to build a billion dollar subway line.

Hire local people, train them, pay them a fair working wage, get the tools and boom, you have your subway.


Think of how many homeless and or out of work people can a better life out of this that way.

You don't need the corporations to do it, you get the local people training and jobs to build there own subway.

Tell the corporations to eat my asshole, the taxes paid by the people should go into funding jobs that help the poor and out of work.