Right, my whole point is that tax havens / structuring like you have with Google Ireland would be less useful if there was a global minimum corporate tax rate.
I hold no illusions about the capacity of the UN to wield real power. But if UN member countries agree to this global minimum and sanction anyone who doesn't, it achieves the goal, no?
Tax havens are a classic example of Tragedy of the Commons. Since we don't actually have an institution with global powers that can effectively prevent such situations via global regulation, we need to do the next best thing – bully everyone into behaving better. Sure, sanctions hurt everyone in the short run, but in the long run it's worth it if we can stop spending a ludicrous amount of human capital on what is effectively dodging societal obligations at an unprecedented scale.
>If UN member countries agree to this global minimum and sanction anyone who doesn't, it achieves the goal, no? ... Tragedy of the Commons.
Not quite. At a very theoretical extreme, maybe... but it is (IMO) so theoretical that any efforts in that direction will yield nothing. IE, "going after tax havens" sounds good, but will do little. Multiple jurisdictions is not a solvable problem in practical terms. Even if it was solved, you would still need to deal with the main issues to get a good result.
The main issue is the way corporate law works. In reality, Alphabet owns all of it subsidiaries. It shouldn't really matter that one is in Ireland, and if you read the "abstract" of relevant legislation it sounds like it doesn't. In corporate (and corporate tax) law, they are treated in different ways for different purposes. That's why we don't get a (Profit)X(Tax Rate) result.
"Profit" is just as ethereal as "domicile."
In my opinion... I would abandon corporate income taxes entirely. Investors that buy Facebook or Amazon aren't in it for profits. Amazon reported about $11bn net income last year. Its market cap has increased by about $500bn... and $700bn so far this year. In theory these gains are taxed under CGT. In practice, CGT also runs into the swamp of corporation law.
This is like the problem with taxing gamblers. Stop trying to figure that out. Tax the casino instead. Tax either the market cap or the gains in market cap. Allow public companies to pay their taxes in shares.
..not saying any of this is simple... just saying that we can't win at whack-a-mole.
In my particular suggestion, it runs against the grain of tax policies. Tax policies (since the 70s) try to be "efficient," for a somewhat technical economic definition of the term. "Neutral" would be more descriptive. Taxing market cap makes bad investments worse. Even though profits are low, they are still taxed and ownership is diluted.
The reason that I think this is ok is because cash is what matters in reality, not profits.
...ultimately though... all this goes over the heads of 99% of politicians, and nearly anyone that doesn't have a vested interest.
I hold no illusions about the capacity of the UN to wield real power. But if UN member countries agree to this global minimum and sanction anyone who doesn't, it achieves the goal, no?
Tax havens are a classic example of Tragedy of the Commons. Since we don't actually have an institution with global powers that can effectively prevent such situations via global regulation, we need to do the next best thing – bully everyone into behaving better. Sure, sanctions hurt everyone in the short run, but in the long run it's worth it if we can stop spending a ludicrous amount of human capital on what is effectively dodging societal obligations at an unprecedented scale.