Janet Yellen to call for unified global corporate tax rate

[aesma]

Many people here seem to think a race to the bottom is a good thing. For people who live in developed countries, with good salaries, etc., higher taxes come with it. It's part of why living there is good, and poor people dream of living in these rich countries. Not many people leave these countries to live in poor countries to get low taxes !

What Yellen is saying is only for developed countries, poor countries will be left alone, don't worry.

Of course some tax paradises are in the crosshairs.

[Silberman]

I don't know what sort of people vote for a party that promises to increase the taxes.

Those who think that the taxes are going to be paid by the rich, when in reality the middle and working classes bear the brunt of the tax burden. Yelen must be desperate. She knows that tax hikes often result in lower revenues, which is why she is making this move. Basically, what they want to do is to continue squandering money and not have any consequences, but they cannot.

Raising taxes for the rich is a popular speech for those that are ignorant about how the economy really works, the rich are going to do everything that they can to avoid paying taxes and personally I do not judge them for that because I know that if I had that kind of power I will do the same, so most of the time when governments say something like this it is nothing more but a PR campaign to try to keep the people happy about the taxes that now they will have to pay thinking that the rich are paying even more when that is not true.

[bryant.coleman]

You do not have to be republican, all you have to be is a person who hates left and you would be supporting republicans in USA, that's all it takes. How do I know you are a person who hates leftists in anywhere in the world? Simple, you say that Democrats are increasing taxes left right and center, whereas they have not increased taxes yet and only proposition was to increase taxes on people who earn over 10 million dollars a year.

Do you think that's bad? In a world where economy is horrible because of pandemic, increasing taxes for people who profit more than 10 million dollars should not pay a bit more taxes?

Any person who sees "tax increase" and think that leftists are ruining economy are the reason why we do not have a proper world. We have 300+ million people who are making under 200k dollars a year, and over half of that makes less than 70k per year, and all we need is people with 10+ million profits per year to pay a bit more taxes so we can make the world better place for everyone, why is that so bad?

As usual, Democrats resorting to outright lying. Not a surprise, really.

First of all, the proposal was not to increase income tax for those who earn more than $10 million per year. The proposal was to increase income tax for anyone who earn more than $400,000 per year.

https://www.bloomberg.com/news/articles/2021-03-15/biden-eyes-first-major-tax-hike-since-1993-in-next-economic-plan

A couple of years back, I would have asked you whether you don't have any shame. But now I understand that this is one of the basic traits for Democrat supporters.

Now I will tell you why this is a bad idea. If you are living in the state of California, there is an additional state income tax (up to 13.3%). The top most slab of federal income tax stands at 37%. So even now, upper middle class is paying upwards of 50% as income tax. Obviously Democrats would like to increase it further. So on paper, you may be earning $400,000. And in reality you will receive half of that amount in your bank account.

[aesma]

At 400K in the US you're in the top 2%, close to the 1%. That's not middle class.

[bryant.coleman]

At 400K in the US you're in the top 2%, close to the 1%. That's not middle class.

In cities such as Los Angeles and San Francisco, 200K is not a big amount (that's what they get after the tax cut). And earning 400K in a city such as LA or SF can be much different from earning the same amount in a smaller and more affordable city such as Omaha or Memphis. If you further increase the taxes to 70% or 80%, then what is the point in working so hard? Instead of working for 40 hours a week and earning $400,000, I can opt to work for 20 hours a week and earn $200,000. These sort of insane taxes will only encourage unproductive activity.

[DooMAD]

Instead of working for 40 hours a week and earning $400,000, I can opt to work for 20 hours a week and earn $200,000. These sort of insane taxes will only encourage unproductive activity.

Why do you equate time not spent getting paid with being "unproductive"?  There are plenty of worthwhile things you can do with your time that don't involve making yourself financially wealthier.  Is money really the only thing you care about?  Are there no other motivations to spur you on?  Consider re-evaluating what's actually important to you.  For some people, time is the far more valuable commodity.  Imagine what you could do with all that extra time.

Also, I'm not sure what you were trying to achieve with that example.  It's difficult to feel sympathy for someone who can earn $200,000 working just 20 hours a week and acts like they're somehow in a difficult position.  Maybe stop pretending you're going to win sob-story of the year with that one, yeah?

[oHnK]

Instead of working for 40 hours a week and earning $400,000, I can opt to work for 20 hours a week and earn $200,000. These sort of insane taxes will only encourage unproductive activity.

Why do you equate time not spent getting paid with being "unproductive"?  There are plenty of worthwhile things you can do with your time that don't involve making yourself financially wealthier.  Is money really the only thing you care about?  Are there no other motivations to spur you on? 

Actually, if talking only about money, a person's motivation for life is a relative reason and even he is not the only one like that.  There are many people who don't use their idle time as lazy and unproductive time.  Likewise those of you who fill your time with a lot of positive things even though they don't make money, and this is also not wrong.  I see both sides that cannot be blamed on each other.  It goes back to their respective choices.  But here the problem is that taxes are so high that people become demotivated to earn more.  The higher the income, the higher the tax issued.  Even though people have worked very hard to produce that high income.  The government with its various agendas regulates unilateral policies on behalf of government programs.  And the most annoying thing is that even the matters of private assets become interference by the government.  This is the weakness of a centralized economy.

[Vishnu.Reang]

At 400K in the US you're in the top 2%, close to the 1%. That's not middle class.

Here in India, the top most slab (43%) kicks in if you earn more than $665,000. But very few people will come under that category. And here only around 2% of the population pays any income tax. Agricultural income is exempt from income tax, and more than half of the population is consisted of farmers. Those who earn less than $6,700 per year don't have to pay any income tax (that amounts to more than 90% of the population). If you take a home loan and go for 80C and reimbursements, then you can avoid income tax even if you earn around $12,000 per year. 

[lixer]

This doesn't make sense to me at all, I mean if you are actually rising it to a level where corporations are leaving the nation, then charge them even more if they ever want to work with USA people, simple as that. Let's say you start to charge Google a lot more money, and then they decide to relocate to Ireland, if google ever wants to make money from USA citizens, they will have to pay 50% for all the USA based income, simple as that.

If you do that, you are going to either collect more taxes that way, or they will decide not to leave and you get your raise without them leaving. These companies relocate to other nations a lot and they get away with it because they are based on other nations, a very high foreign company policy would solve all of these problems but unfortunately politicians gets bribed and that notion gets deleted right away.

[Kong Hey Pakboy]

This doesn't make sense to me at all, I mean if you are actually rising it to a level where corporations are leaving the nation, then charge them even more if they ever want to work with USA people, simple as that. Let's say you start to charge Google a lot more money, and then they decide to relocate to Ireland, if google ever wants to make money from USA citizens, they will have to pay 50% for all the USA based income, simple as that.

It isn't that easy to move your base of operations,that is why they are doing this because they know that it will be difficult for companies to get out and the only way that they can prevent this kind of thing from happening is when they lobby the Senators and the right people to protect their interest.

[bryant.coleman]

It isn't that easy to move your base of operations,that is why they are doing this because they know that it will be difficult for companies to get out and the only way that they can prevent this kind of thing from happening is when they lobby the Senators and the right people to protect their interest.

May not be easy. But definitely not impossible. Why do you think that reptilian overlord Yellen made such a statement? Being one of the most authoritarian individuals in the US government right now, if it was possible then she would have prohibited the companies from using this loophole. But it is not practical. The world is becoming smaller and smaller and the companies are finding it easier to relocate. Now it is up to the regimes to attract them by lowering the tax rate.

[Silberman]

At 400K in the US you're in the top 2%, close to the 1%. That's not middle class.

In cities such as Los Angeles and San Francisco, 200K is not a big amount (that's what they get after the tax cut). And earning 400K in a city such as LA or SF can be much different from earning the same amount in a smaller and more affordable city such as Omaha or Memphis. If you further increase the taxes to 70% or 80%, then what is the point in working so hard? Instead of working for 40 hours a week and earning $400,000, I can opt to work for 20 hours a week and earn $200,000. These sort of insane taxes will only encourage unproductive activity.

You are talking about the Laffer curve, the concept is accepted as true but economists are always arguing about what is its actual shape, governments seem to think that they can push taxes higher and higher and that they are going to get more revenue, but as you said it comes to a point in which people begin to think about whether it is worth for them to keep working so hard when they are getting so little out of it, in that case it is better to do something else that you enjoy and not work as hard, very high taxes like the ones we are seeing today are one of the reasons why the economy is in such a bad shape.

[aesma]

There are more rich people than ever, and they're richer than ever, new billionaires every day, but taxes are too high ? Are you using some drug when writing this ?

[DooMAD]

There are more rich people than ever, and they're richer than ever, new billionaires every day, but taxes are too high ? Are you using some drug when writing this ?

100% this.  If the economy is in a bad shape, it's because the wealthiest people are sitting on more money than they could spend in a lifetime.  The money doesn't flow.  Those who would spend their money back into the economy (assuming they had any) barely have enough to live on.  Many people can hardly afford the bare essentials, let alone any luxuries they might crave.  I live in a nation that is supposedly a first world country, but they fudge the employment figures with zero-hour contracts.  People aren't really working to the extent the government like to pretend they are, but everyone plays along for reasons I still can't fathom.  Then they pretend inflation is only a few percent, but they conveniently ignore half the things people need to buy in order to live because, if they include those things, inflation would be a number that makes the government look as though they're handling the economy poorly.  Obviously we can't have that, so fudge those numbers too.  All the while, they're doing deals to sell public assets, to private companies (which they just so happen to have a connection with) and pocket the difference.  All in the name of capitalism.  Except it isn't anything remotely like capitalism anymore.  It's just corruption and thievery.  A crime syndicate in all but name.  

But yes, all the brainwashed people in this topic can keep bleating about a tax increase that's still lower overall than what many other nations already have.  Hell, back in the '80s, most places had a ~40% corporate tax.  I'm sure all these prognostications of mass corporate exodus are a little far-fetched if the US raise it to 28%.  

[just_Alice]

While I think that a global corporate tax is a good idea, because it's fairer and will prevent companies from doing business in other countries, where it's cheaper, I doubt that many will agree to that. Like you said, it's an economical advantage for them, why should they lose this opportunity, so that the US can make more money? I fear that Biden's decision to impose higher taxes may turn out bad and scare away corporations. 

[Febo]

It will never happen. Only chance for her to make it happen is to send tanks enforce it. Countries will keep compete with taxes as they do right now. That is how capitalism work.  Let her rather call fro unified demolishing of all nuclear weapons. It would have the same result.

[noorammak]

How to unify corporate tax globally. Each country has an economic structure, a different economic environment, the application of corporate tax affects other issues in the overall national policy. Not to mention that each country has different geographical locations, so the tax rates between countries must be different to ensure that countries have competition in attracting businesses.

[Vishnu.Reang]

You are talking about the Laffer curve, the concept is accepted as true but economists are always arguing about what is its actual shape, governments seem to think that they can push taxes higher and higher and that they are going to get more revenue, but as you said it comes to a point in which people begin to think about whether it is worth for them to keep working so hard when they are getting so little out of it, in that case it is better to do something else that you enjoy and not work as hard, very high taxes like the ones we are seeing today are one of the reasons why the economy is in such a bad shape.

Agreed. Although I don't think that individuals in large numbers will move from one country to another due to high tax rates, in the long term it will only make the employees unproductive. Also, before Yellen talks about a unified global tax rate, she should look towards unifying income tax within the United States. Because it differs from state to state. In states like California, the combined state+federal income tax is >50% for the top most group, while in Republican states such as Texas and Wyoming, it is 37%.

And the irony is that California is bankrupt, due to incompetent and corrupt handling of the tax revenue, while TX is in a relatively better position.

https://www.paloaltoonline.com/news/2020/05/10/california-just-revealed-a-543-billion-deficit--signaling-deep-cuts-ahead

[beerlover]

Although I don't think that individuals in large numbers will move from one country to another due to high tax rates, in the long term it will only make the employees unproductive. Also, before Yellen talks about a unified global tax rate, she should look towards unifying income tax within the United States. Because it differs from state to state. In states like California, the combined state+federal income tax is >50% for the top most group, while in Republican states such as Texas and Wyoming, it is 37%.

And the irony is that California is bankrupt, due to incompetent and corrupt handling of the tax revenue, while TX is in a relatively better position.

https://www.paloaltoonline.com/news/2020/05/10/california-just-revealed-a-543-billion-deficit--signaling-deep-cuts-ahead

The problem is not democrat party or republican party, that has been established long time ago, it is known for the past 30 years, USA is a nation with "2" parties but the reality is that they are basically the same and nothing changes. Why? Because both of them use the tax income wrongfully and they do not use it directly helping the people. Look at the military budget, Bush increased it, then Obama got elected and increased it, then Trump got elected and increased it, then Biden got elected and increased it, now it is nearly getting to 800 billion dollars a year, do you know what you can do with that?

You can solve almost every problem in all of USA if you used that directly helping to people, it would seriously be enough to cover half of all universal health care and also if you cap pharma companies charging idiotic prices that would be enough to cover every single person who got sick, from flu to end level cancer. This is not democratic or republican, it is problem with politicians.

[Sithara007]

The problem is not democrat party or republican party, that has been established long time ago, it is known for the past 30 years, USA is a nation with "2" parties but the reality is that they are basically the same and nothing changes. Why? Because both of them use the tax income wrongfully and they do not use it directly helping the people. Look at the military budget, Bush increased it, then Obama got elected and increased it, then Trump got elected and increased it, then Biden got elected and increased it, now it is nearly getting to 800 billion dollars a year, do you know what you can do with that?

You can solve almost every problem in all of USA if you used that directly helping to people, it would seriously be enough to cover half of all universal health care and also if you cap pharma companies charging idiotic prices that would be enough to cover every single person who got sick, from flu to end level cancer. This is not democratic or republican, it is problem with politicians.

I read a few days back that the American intervention in Afghanistan cost the tax payers more than $1 trillion. And a few years back, it was being said that the bill for Iraq intervention has passed $2 trillion level (now it must be even higher). And then there are additional bills to be paid from countries such as Libya, Syria and Kosovo. Without all these foreign interventions, I assume that the American federal debt would have been at least 50% lower. But then it would be bad for private corporations such as Raytheon and Boeing, whose revenues depend on these military interventions.