It is scary to what extent corporate taxes can be avoided. Something is there is seriously broken and radical ideas are worth contemplating when the there is such a discrepancy between plan and outcome.
Should profit be accruing unchecked in corporations? Certainly there should be some pay back to society as society bears some external costs. Not only that but there may be better places capital could be deployed. These can be different at different times - management doing reinvestment, shareholders moving capital elsewhere, employees spending and taxman spending. A robust scheme would employ a balanced approach. At any time one may be preferable and some will argue for extremes. But things are changing - always - until this time it will be different - only to return shortly later violently to mean.
Discussion of corporate profits requires to also be looking at income tax and the treatment of dividends and capital gains is always being simplistic. But the essay is not trying to propose a solution. It is simply pointing out that there is a systemic escalating credibility problem:
> It could be argued that the existence of a tax that countries cannot properly enforce is one of the factors undermining trust in governments and feeding populist movements.
Bloomberg is not known for its social attitude and one may argue that they are advancing here a very liberalist agenda by talking up a fake problem. I give some leeway this time due the next paragraph:
> There are other ways governments can keep corporations in check -- for example, through environmental, safety and labor regulations, which U.S. Republicans and Brexiters dislike but which ultimately benefit consumers in a way the corporate tax doesn't. There are also other ways governments can get the revenue -- for example, by paying more attention to private income from corporate dividends and pass-through entities, or the European way -- by placing an additional burden on consumption through a value-added tax. In the U.K., VAT contributes 10.7 percent of GDP to the budget. To compensate for the absence of a corporate tax, it would need to go up from 20 percent to 25 percent -- the level that currently exists in Sweden and Croatia, for example.
Finding ways to tax that can not be escaped is critical. Also important is to find ways to tax that don't burden labor too much. However this approach needs to take into account that shifting (or acknowledging the fiat-accompli) of collecting tax from less sophisticated and mobile citizens and workers is putting pressure on well paid full time employment. Tariff free zones may not be so compatible with that approach.
Last but not least - hoarding profits (most extreme in case of Apple) as it going on at the moment is a recent phenomena. There used to be a tax on that called inflation. Any balancing would need to look at where and with volume new money is entering the system and going nowhere.
Should profit be accruing unchecked in corporations? Certainly there should be some pay back to society as society bears some external costs. Not only that but there may be better places capital could be deployed. These can be different at different times - management doing reinvestment, shareholders moving capital elsewhere, employees spending and taxman spending. A robust scheme would employ a balanced approach. At any time one may be preferable and some will argue for extremes. But things are changing - always - until this time it will be different - only to return shortly later violently to mean.
Discussion of corporate profits requires to also be looking at income tax and the treatment of dividends and capital gains is always being simplistic. But the essay is not trying to propose a solution. It is simply pointing out that there is a systemic escalating credibility problem:
> It could be argued that the existence of a tax that countries cannot properly enforce is one of the factors undermining trust in governments and feeding populist movements.
Bloomberg is not known for its social attitude and one may argue that they are advancing here a very liberalist agenda by talking up a fake problem. I give some leeway this time due the next paragraph:
> There are other ways governments can keep corporations in check -- for example, through environmental, safety and labor regulations, which U.S. Republicans and Brexiters dislike but which ultimately benefit consumers in a way the corporate tax doesn't. There are also other ways governments can get the revenue -- for example, by paying more attention to private income from corporate dividends and pass-through entities, or the European way -- by placing an additional burden on consumption through a value-added tax. In the U.K., VAT contributes 10.7 percent of GDP to the budget. To compensate for the absence of a corporate tax, it would need to go up from 20 percent to 25 percent -- the level that currently exists in Sweden and Croatia, for example.
Finding ways to tax that can not be escaped is critical. Also important is to find ways to tax that don't burden labor too much. However this approach needs to take into account that shifting (or acknowledging the fiat-accompli) of collecting tax from less sophisticated and mobile citizens and workers is putting pressure on well paid full time employment. Tariff free zones may not be so compatible with that approach.
Last but not least - hoarding profits (most extreme in case of Apple) as it going on at the moment is a recent phenomena. There used to be a tax on that called inflation. Any balancing would need to look at where and with volume new money is entering the system and going nowhere.