Taxing the rich.....just doesn't work

[Deleted]

We've seen countless examples here in the UK the last 15 years of how taxing the rich just leads to them moving their money out the country and leaving huge gaps in the economy.

The latest example is Spain.

They have introduced a Google tax that aims to raise taxes by taxing Google every time they publish a Spanish article.

Great idea right?

Helps the Spanish economy recover from huge deficits.
Helps close the gap between the rich and the poor.

Wrong.

Google simply stopped their services in Spain completely.

Taxing the rich is completely anti - business and unfortunately doesn't work whatsoever.

Spain just lost massive Internet resources.


Google to shut Spanish news service http://www.bbc.co.uk/news/business-30426496

[Kapadons]

People here will just argue that the government should stop them from moving their money out of the country.

[Crissi]

There are smart ways to do it, and then there are dumb ways. Closing loopholes (and keeping tabs on capital gains) first is the smart way, being punitive like raising it to 70% is the dumb way.

[Wells]

We've seen countless examples here in the UK the last 15 years of how taxing the rich just leads to them moving their money out the country and leaving huge gaps in the economy.

The latest example is Spain.

They have introduced a Google tax that aims to raise taxes by taxing Google every time they publish a Spanish article.

Great idea right?

Helps the Spanish economy recover from huge deficits.
Helps close the gap between the rich and the poor.

Wrong.

Google simply stopped their services in Spain completely.

Taxing the rich is completely anti - business and unfortunately doesn't work whatsoever.

Spain just lost massive Internet resources.


Google to shut Spanish news service http://www.bbc.co.uk/news/business-30426496

I'm confused, are you talking about the rich or about corporations?

[Orbitus]

We've seen countless examples here in the UK the last 15 years of how taxing the rich just leads to them moving their money out the country and leaving huge gaps in the economy.

The latest example is Spain.

They have introduced a Google tax that aims to raise taxes by taxing Google every time they publish a Spanish article.

Great idea right?

Helps the Spanish economy recover from huge deficits.
Helps close the gap between the rich and the poor.

Wrong.

Google simply stopped their services in Spain completely.

Taxing the rich is completely anti - business and unfortunately doesn't work whatsoever.

Spain just lost massive Internet resources.


Google to shut Spanish news service http://www.bbc.co.uk/news/business-30426496

But giving them tax cuts doesn't give us jobs. So you either tax them, close loopholes like Crissi said, or do nothing. Because allowing them to get all these loopholes means they pay less in a percentage than people who are middle class or poor. We should go back to the times where we were at our greatest for economies. The post WW2 era til the 80s before Reagan started lying to people about this trickle down economics bullshit that doesn't work.

[Lothaeryn]

People here will just argue that the government should stop them from moving their money out of the country.

If you intend to withdraw your financial resources from the country that helped you obtain that capital for the sole purpose of protest or sanction against government policy, you are deliberately sabotaging the economy of that nation.

Last time I checked, sabotage is also treason.

simple solution would be to declare any deposit or withdrawal of resources from the economy to be stored in offshore tax havens as treason. allow it to be pooled in friendly national economies, so long as they are appropriately taxed as their laws statute.

see how quickly those fuckers will be running from their countries as a result. wonder whose side they were really on then if they are unwilling to support their own economy.

[Yvaelle]

I'm confused, are you talking about the rich or about corporations?

What are you implying Wells, that corporations aren't people?

My wife is a corporation, my daughter is half-corporation - don't be racist

[alucardtnuoc]

The problem with trying to increase taxes for the wealthy is that they have enough money to throw around to find loopholes to make it not matter to them.

[kendro1200]

There are smart ways to do it, and then there are dumb ways. Closing loopholes (and keeping tabs on capital gains) first is the smart way, being punitive like raising it to 70% is the dumb way.

Very much this.
There is a history of doing things the right way in the past (look at the early 20th century US), when tax codes were a lot simpler and with less loopholes. Simplify the code, be more punitive towards those that commit severe fraud.
I honestly have taken a severe liking to the doing away of income taxes and just increase sales tax. If done correctly it is a tax that really can't be side stepped without doing clearly illegal things (smuggling across the border) that would make cases against those avoiding taxes very binary.
With just an increased sales tax it doesn't matter if your money is here or there, all that matters is how much you spend. Those that don't want to 'pay taxes' by not buying can choose to either hoard their money, which they already did, or invest it into something else, providing liquid to the market. If need be, tiers of taxes based on price points can be established. In the end though, the best part is less money wasted on over-sized places like the IRS, and a system that is simple enough to not purposefully trip people who don't re-educate themselves every year on how and what can be filed. The downside is that people that abused or lived off the glut of the current system would need to adjust.

[Crissi]

The problem with trying to increase taxes for the wealthy is that they have enough money to throw around to find loopholes to make it not matter to them.

Which is why I stated that the first proposal should be a closure on all loopholes, instead of flat taxing into oblivion.

[Conspicuous Cultist]

What are you implying Wells, that corporations aren't people?

My wife is a corporation, my daughter is half-corporation - don't be racist

Corporations make great book-keepers.

[Korgoth]

The OP's understanding of what happened is incredibly flawed. The "google tax" is not an actual tax in the sense that the Government collects money.
What is actually going on is that the Spanish Newspapers convinced the Spanish government to pass a law forcing Google to pay them if they link their news content. But since Google does not run Google News as a business, it generates no revenue, they of course are not going to continue in Spain.

It has nothing to do really with taxing the rich. It is more about corruption and stupidity in the Spanish government and newspapers. As Google News has been found to drive viewers to the sites, and when this was tried in Germany, as pointed out in the source, it ultimately has failed with major publications wanting to get put back on.

[twiddler]

This is a case of someone taking a case of an extreme and deducing simplistic logic. Very good job, sir.

[Misuteri]

If you really want to fix corporations from exploiting loopholes here's the answer.

Tax everything at a fair rate of 18-25% and have no loopholes. The money collected would just explode.

What politicians around the world don't realize is that capital is as mobile as an email. Money no longer is restrained by borders. With monetary policy in the EU you've seen how that works and how many companies just send their money to Irish subsidiaries.

In America companies establish Delaware corporations for the same reason. You'd be surprised just how many Fortune 500 companies are established in Delaware even if their corporate headquarters aren't.

[Endus]

We've seen countless examples here in the UK the last 15 years of how taxing the rich just leads to them moving their money out the country and leaving huge gaps in the economy.

The latest example is Spain.

They have introduced a Google tax that aims to raise taxes by taxing Google every time they publish a Spanish article.

Great idea right?

Helps the Spanish economy recover from huge deficits.
Helps close the gap between the rich and the poor.

Wrong.

Google simply stopped their services in Spain completely.

Taxing the rich is completely anti - business and unfortunately doesn't work whatsoever.

Spain just lost massive Internet resources.


Google to shut Spanish news service http://www.bbc.co.uk/news/business-30426496

You've confused "the rich" with "global corporations". There's some crossover, but wealthy people have to live somewhere, and if your nation is a major marketplace, you can tax their business there, regardless of where they live.

The Spain thing, you misrepresented, but in general, it's a question of market size. Generally, a corporation can't afford to walk away from a market the size of an entire nation. While a tax might mean they make less money, they still make some money, and some money is always better than no money, which is what they get if they pull out.

- - - Updated - - -

What politicians around the world don't realize is that capital is as mobile as an email. Money no longer is restrained by borders.

This really, really isn't true. There are pretty strict laws in most nations about transfers of large amounts of money across their borders. This doesn't just apply to briefcases full of hard currency, it applies equally to electronic transfers.

[Deleted]

This is a case of someone taking a case of an extreme and deducing simplistic logic. Very good job, sir.

I do actually try to break most things down in to their lowest common denominator.

Starting a simple paragraph can lead to depthly discussions.

It also opens up to allow people to have their own opinions rather than you forcing your own too much from the get go.

[vetinari]

The modern tax system is an honor system. You tell the tax office how much money you owe and then pay them that amount. Then the tax office(IRS/local equivalent) runs audits on a small fraction of companies/individuals to keep people honest.

However, an honor system is only useful if the people are, well, honorable. If they aren't, I so no reason why a country cannot take the gloves off.

I daresay there would be a lot less tax evasion going on if particularly egregious examples of tax avoidance/evasion resulted in mysterious accidents.

[Cthulhu 2020]

We shouldn't tax the rich because if the rich have more excess money than they already do they'll feel benevolent and create jobs that they bankroll out of their own personal funds even if there's no demand for jobs.

I think the TED talk had it right. Businesses are job suppliers, not job creators. Demand is the job creator. Worshipping the wealthy as "job creators" isn't too far of a step from "the creator".

[Serenais]

Yeah, that is the stupid way going about it. Punish the rich and succesful for being rich and succesful, and at best, they stop spending (less stuff to tax, the money doesn't fuel the economy but just sits somewhere) or worse, take their money elsewhere.
If you want more money from a business, you close (at least some) tax loopholes and give incentives for said large business to do more business. That equals both more jobs and more stuff to tax, effectively a win-win situation. It's nowhere near as simple as "we tax the hell out of ya" to come up with, however...

[oxymoronic]

i see kids talk about loop holes for the rich but never talk about which ones in particular we are suppose to get rid of. how can we fix the problem when we dont know the problem? give me 5 loopholes the rich use that need to be closed? please