The United States loses close to $70 billion in tax revenue
November 10, 2017 10:14 AM Subscribe
I think to distinguish between "good" legal tax avoidance and "bad" illegal tax evasion is to miss the point. It's not about "actionable" strategies to allow the readers to avoid taxes -- it's about showing how corporations and individuals are avoiding taxes that on a political and moral basis (arguably) they should be paying. That is to say, laws change, and imo we should frame the laws to capture these lost taxes. I found this idea particularly interesting:
A potential fix would be to allocate the taxable profits made by multinationals proportionally to the amount of sales they make in each country.posted by crazy with stars at 11:30 AM on November 10, 2017 [34 favorites]
Say Google’s parent company Alphabet makes $100 billion in profits globally, and 50 percent of its sales in the United States (a relatively similar scenario to the first quarter of this year, in which that figure was 48 percent). In that case, $50 billion would be taxable in the United States, irrespective of where Google’s intangible assets are or where its workers are employed. A system similar to this already governs state corporate taxes in America.
Such a reform would quash artificial profit-shifting. Corporations may be able to shift around profits, assets, and subsidiaries, but they cannot move all their customers to Bermuda.
I think I came across the link to the iOS game Kleptocrat somewhere on MeFi. Not the greatest game, but amusing in a dark way, and very informative.
posted by RedOrGreen at 11:42 AM on November 10, 2017
posted by RedOrGreen at 11:42 AM on November 10, 2017
At this point, I do believe there's a magic money tree, several species of them in fact, but they're described in something like the Codex Seraphinianus because us plebs can't be aware of them.
posted by lmfsilva at 11:46 AM on November 10, 2017 [1 favorite]
posted by lmfsilva at 11:46 AM on November 10, 2017 [1 favorite]
One of the ideas that I think Dean Baker at CEPR has suggested is taxing based on the stock valuation. Doesn't get at the individual evaders or privately held corporations however.
posted by idb at 11:55 AM on November 10, 2017
posted by idb at 11:55 AM on November 10, 2017
but they're described in something like the Codex Seraphinianus because us plebs can't be aware of them.
Yeah? I thought it was well known in the Codex Modern Money Mechanics.
posted by deadaluspark at 12:08 PM on November 10, 2017 [1 favorite]
Yeah? I thought it was well known in the Codex Modern Money Mechanics.
posted by deadaluspark at 12:08 PM on November 10, 2017 [1 favorite]
As an aside, Daphne Caruana Galizia who made huge contributions to the Panama Papers investigation into tax evasion was assassinated by car bomb in Malta just a couple weeks ago.
posted by jeffburdges at 12:09 PM on November 10, 2017 [12 favorites]
posted by jeffburdges at 12:09 PM on November 10, 2017 [12 favorites]
If a Russian buys an ad on Facebook targeting voters in Minnesota, where does that sale take place?
posted by Hatashran at 12:09 PM on November 10, 2017 [1 favorite]
posted by Hatashran at 12:09 PM on November 10, 2017 [1 favorite]
The American Facebook company has come to Russia via Internet to do business with a Russian national. That business is to deliver an ad to Minnesota, but the business transaction was done in Russia.
The (American) law's pretty much settled on that one. I get charged MA sales tax on items I buy online, because it's considered that they're doing business in MA, not that I'm doing business in their home state.
posted by explosion at 12:41 PM on November 10, 2017
The (American) law's pretty much settled on that one. I get charged MA sales tax on items I buy online, because it's considered that they're doing business in MA, not that I'm doing business in their home state.
posted by explosion at 12:41 PM on November 10, 2017
If a Russian buys an ad on Facebook targeting voters in Minnesota, where does that sale take place?
Trump Tower?
posted by Mei's lost sandal at 12:55 PM on November 10, 2017 [14 favorites]
Trump Tower?
posted by Mei's lost sandal at 12:55 PM on November 10, 2017 [14 favorites]
> legal tax "avoidance" and those income reporting events that warrant investigation of illegal tax "evasion."
Reminded of David Mitchell's view of this moral grey area.
posted by Auz at 1:56 PM on November 10, 2017 [3 favorites]
Reminded of David Mitchell's view of this moral grey area.
posted by Auz at 1:56 PM on November 10, 2017 [3 favorites]
The (American) law's pretty much settled on that one. I get charged MA sales tax on items I buy online, because it's considered that they're doing business in MA, not that I'm doing business in their home state.
Very much not settled (though it could be next year, depending on what SCOTUS does).
posted by melissasaurus at 2:11 PM on November 10, 2017
Very much not settled (though it could be next year, depending on what SCOTUS does).
posted by melissasaurus at 2:11 PM on November 10, 2017
and How to Stop Them
guillotines? say it's guillotines
posted by entropicamericana at 4:33 PM on November 10, 2017 [12 favorites]
guillotines? say it's guillotines
posted by entropicamericana at 4:33 PM on November 10, 2017 [12 favorites]
I seriously doubt the court is going to overturn themselves on the issue of nexus.
The transaction takes place wherever it is processed/fulfilled (ambiguity intentional due to differing business models working differently) but if the retailer has a business presence in Massachusetts, they must collect sales tax on behalf of Massachusetts as a function of Massachusetts law.
If the retailer lacks such presence, Massachusetts can no more obligate them to collect sales tax than they can make a Floridian register their car there.
That's why most states participate in the streamlined sales tax compact, to provide a carrot for retailers by making sales tax collection easier (and providing a discount) if they're willing to participate. At some point, participating states will be reciprocally requiring retailers with nexus in their state to collect sales tax on remote sales in other participating states. They can do that since any state is perfectly free to obligate its own companies to collect tax for anyone that state desires.
Federal law has little applicability here aside from when states try to push the boundaries on nexus in an attempt to apply their law outside their jurisdiction. That is, unless Congress specifically empowers states to impose sales tax collection responsibility on foreign companies, which they explicitly have refused to do by doing the opposite (and then letting it expire, IIRC, hence this latest round of fake stick wielding)
The irony in South Dakota being among the first to attempt the economic nexus argument when they were the ones that destroyed that regime as it applied to banks back in the late 70s so as to attract credit card business is strong.
posted by wierdo at 5:42 PM on November 12, 2017
The transaction takes place wherever it is processed/fulfilled (ambiguity intentional due to differing business models working differently) but if the retailer has a business presence in Massachusetts, they must collect sales tax on behalf of Massachusetts as a function of Massachusetts law.
If the retailer lacks such presence, Massachusetts can no more obligate them to collect sales tax than they can make a Floridian register their car there.
That's why most states participate in the streamlined sales tax compact, to provide a carrot for retailers by making sales tax collection easier (and providing a discount) if they're willing to participate. At some point, participating states will be reciprocally requiring retailers with nexus in their state to collect sales tax on remote sales in other participating states. They can do that since any state is perfectly free to obligate its own companies to collect tax for anyone that state desires.
Federal law has little applicability here aside from when states try to push the boundaries on nexus in an attempt to apply their law outside their jurisdiction. That is, unless Congress specifically empowers states to impose sales tax collection responsibility on foreign companies, which they explicitly have refused to do by doing the opposite (and then letting it expire, IIRC, hence this latest round of fake stick wielding)
The irony in South Dakota being among the first to attempt the economic nexus argument when they were the ones that destroyed that regime as it applied to banks back in the late 70s so as to attract credit card business is strong.
posted by wierdo at 5:42 PM on November 12, 2017
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posted by marycatherine at 11:14 AM on November 10, 2017 [2 favorites]