U.S. moving to impose retaliatory tariffs on countries taxing digital goods

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in General Discussion
The U.S. plans to enact new retaliatory tariffs on nations that tax digital goods from American internet companies, including those that tax App Store purchases.

Countries that tax App Store purchases may soon face retaliatory tariffs on their physical exports to the U.S.
Countries that tax App Store purchases may soon face retaliatory tariffs on their physical exports to the U.S.


The Office of the United States Trade Representative (USTR) has proposed tariffs that are approximately equal to taxes that various countries are requiring of international tech companies. Bloomberg estimates that the total annual value of the duties reaches $880 million.

The USTR's retaliatory tariffs would tax imports as much as 25% annually from a list of countries that includes the U.K, India, Spain, Italy, Turkey, and Austria.

The countries currently charge anywhere from a 2% to 5% tariff on digital-services revenue for various online activities. Details vary by country but apply to income from online areas like digital marketplaces, advertising, software-as-a-service, social media, and search engines.

Among the countries imposing digital taxes on U.S. firms, the USTR estimates that the U.K. takes in the most, at $325 million annually.

The retaliatory tariffs would apply to physical imports. They would cover an eclectic range of products, including caviar, fairground amusements, telescopes, and shrimp.

In 2020, Apple warned developers in the Apple Developer Program that it would begin recalculating for changes in global tariffs, potentially impacting developer revenue. At the time, Italy and the U.K had recently added their 3% and 2% digital services taxes on top of their existing value-added tax (VAT). Both countries are included in the USTR's new proposal.

The Internet Association -- an American lobbying group that includes Amazon, Facebook, and Google -- approved of the United States' proposed tariffs. The group released a statement applauding the USTR's action as "an important affirmation in pushing back on these discriminatory trade barriers as the U.S. continues to work to find a viable solution at the OECD."

Apple is not a member of the Internet Association.

The USTR has asked for public comments on its plans. Public hearings for the new tariffs begin on May 4 with the U.K. They continue through the following week, wrapping up with Austria on May 11.
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Comments

  • Reply 1 of 27
    Government is such fun.  On one hand Washington investigates, threatens, and cajoles the tech giants.  On the other it goes to bat for them against other countries trying to tax them.  It makes sense in that different arms of government are responsible for different actions and accountable to different laws and treaties, but it's still an odd look. 
    watto_cobra
  • Reply 2 of 27
    avon b7avon b7 Posts: 5,597member
    In the same way that non-US sovereign nations are free to tax anyone how they see fit within treaty frameworks, the US is also free to do the same, be it 'retaliatory' or not. 

    How it will be seen outside the US on a political level is something the US will have factored in and accepted, so no issues there either. 


  • Reply 3 of 27
    mike1mike1 Posts: 2,563member
    Government is such fun.  On one hand Washington investigates, threatens, and cajoles the tech giants.  On the other it goes to bat for them against other countries trying to tax them.  It makes sense in that different arms of government are responsible for different actions and accountable to different laws and treaties, but it's still an odd look. 
    Like a parent taking offense when someone yells at their child, but punishes the kid as soon as they get home.

    randominternetpersonwatto_cobra
  • Reply 4 of 27
    ppietrappietra Posts: 223member
    Digital stores should be taxed like any retail store... but that can only be feasible if stores don’t divert their profits to some other country, and the problem is stores divert profits to another country... So I think it is quite understandable that there are countries that feel that these companies are not paying enough taxes...
    edited April 5 sully54dysamoriaseanjfrantisekOSBIEGeorgeBMac
  • Reply 5 of 27
    chasmchasm Posts: 2,322member
    Government is such fun.  On one hand Washington investigates, threatens, and cajoles the tech giants.  On the other it goes to bat for them against other countries trying to tax them. 
    I fear you fundamentally misunderstand the issue being discussed.

    The digital tax France and other countries are choosing to impose is not a tax on the tech companies. It's a tax on the buyers of digital goods and services, i.e. you. The tech companies that provide these marketplaces are just responsible for making sure the tax is in place on their stores.

    Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
    dewmewatto_cobra
  • Reply 6 of 27
    lkrupplkrupp Posts: 8,894member
    chasm said:

    Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
    This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
    edited April 5 williamlondonwatto_cobra
  • Reply 7 of 27
    frantisekfrantisek Posts: 722member
    At the end customers will pay that as everything else. But, if we are not going to set tax free economy, this is right move. 
    watto_cobra
  • Reply 8 of 27
    ppietrappietra Posts: 223member
    lkrupp said:
    chasm said:

    Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
    This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
    With that kind of logic no company should pay taxes, which is insane! Companies that have multibillion dollar profits can certainly pay more corporate tax without needing to raise prices. And there is a limit to how much companies can raise prices, otherwise they will lose sales and profits! What governments should avoid is increasing taxes that have a direct impact on price of goods
    edited April 5 gatorguyurashid
  • Reply 9 of 27
    davidwdavidw Posts: 1,134member
    ppietra said:
    Digital stores should be taxed like any retail store... but that can only be feasible if stores don’t divert their profits to some other country, and the problem is stores divert profits to another country... So I think it is quite understandable that there are countries that feel that these companies are not paying enough taxes...
    I don't think you understand how this tax works.

    The tax imposed are to "stores" that are not in their country to begin with, so there is no diverting of profits to other countries. The country collects a sales tax or VAT from the buyers in their country, on these sales. If the "digital stores" were in the country, like a retail store, then the digital store would be paying a tax on their profits to the country they are located in. And if the products sold were not digital in nature and "imported" over the internet, the country would collect a tariff  to import the products that are sold in the retail stores in their country. 

    Put simply on how this tax is levied, with an example using a retail store in the US. If a person in CA bought an iMac on sale from a retail store in NY, the NY store will collect the CA 9.5% sales tax on the sale and remit it to CA. But the profit they make on the sale is taxed in NY because that''s where the store (and the iMac) are located. But with this tax, it would be like if CA also taxed the NY store a certain percentage of the sale because the store in NY is profiting from a sale made in CA. Even though the iMac was never in CA, until it was shipped to the person that bought it.   

    And here's the problem with the tax. The tech companies in the US (or whatever country they are located), from where the sales are made, will deduct this tax from their net revenue as a cost of doing business. So the country where they are located will end up collecting less corporate tax on the profit. Which the US will make up by increasing the tariff on products from those countries imposing this tax. 

    Or developers getting less from each sale. So developers like Epic would not only have to pay 30% to the various app stores for in-app sales, they would also have to pay the UK a small percent of the in-app sales made by Fortnight players in the UK. Spotify and Apple would have to pay the UK a tax to stream music to UK subscribers. So would Netflix with streaming movies. Google would have to pay a tax to the UK, on how much they make placing ads in Google Map for the UK. And so on with any sales involving digital goods. Which will ultimately get passed on to their customers in the form of higher cost for their products. 
    edited April 5 watto_cobra
  • Reply 10 of 27
    ppietrappietra Posts: 223member
    davidw said:
    ppietra said:
    Digital stores should be taxed like any retail store... but that can only be feasible if stores don’t divert their profits to some other country, and the problem is stores divert profits to another country... So I think it is quite understandable that there are countries that feel that these companies are not paying enough taxes...
    I don't think you understand how this tax works.

    The tax imposed are to "stores" that are not in their country to begin with, so there is no diverting of profits to other countries. The country collects a sales tax or VAT from the buyers in their country, on these sales. If the "digital stores" were in the country, like a retail store, then the digital store would be paying a tax on their profits to the country they are located in. And if the products sold were not digital in nature and "imported" over the internet, the country would collect a tariff  to import the products that are sold in the retail stores in their country. 

    Put simply on how this tax is levied, with an example using a retail store in the US. If a person in CA bought an iMac on sale from a retail store in NY, the NY store will collect the CA 9.5% sales tax on the sale and remit it to CA. But the profit they make on the sale is taxed in NY because that''s where the store (and the iMac) are located. But with this tax, it would be like if CA also taxed the NY store a certain percentage of the sale because the store in NY is profiting from a sale made in CA. Even though the iMac was never in CA, until it was shipped to the person that bought it.   

    And here's the problem with the tax. The tech companies in the US (or whatever country they are located), from where the sales are made, will deduct this tax from their net revenue as a cost of doing business. So the country where they are located will end up collecting less corporate tax on the profit. Which the US will make up by increasing the tariff on products from those countries imposing this tax. 

    Or developers getting less from each sale. So developers like Epic would not only have to pay 30% to the various app stores for in-app sales, they would also have to pay the UK a small percent of the in-app sales made by Fortnight players in the UK. Spotify and Apple would have to pay the UK a tax to stream music to UK subscribers. So would Netflix with streaming movies. Google would have to pay a tax to the UK, on how much they make placing ads in Google Map for the UK. And so on with any sales involving digital goods. Which will ultimately get passes on to their customers the form of higher cost for their products. 
    I am not talking about how this tax works, I am talking about why these countries felt the need too create a new tax - because the stores haven’t been paying enough corporate taxes locally...
    And actually the stores are in their countries, there are legal entities in the UK, Spain, etc that represent the digital stores, and they operate in those countries under a local legal framework, which for most countries in Europe is stipulated at the EU level. The actual payment processing is the thing that is done in another country (in Europe something like Luxembourg), while the actual profits end up in yet another country (in Europe something like Ireland), where they pay corporate taxes. Since it is hard change that legal framework, because it envolves international agreements, they instead opted to create new taxes, so that this economic activity can be taxed in their countries. It is delusional to think that US companies don’t pay corporate taxes in other countries.
    edited April 5
  • Reply 11 of 27
    davidwdavidw Posts: 1,134member
    ppietra said:
    davidw said:
    ppietra said:
    Digital stores should be taxed like any retail store... but that can only be feasible if stores don’t divert their profits to some other country, and the problem is stores divert profits to another country... So I think it is quite understandable that there are countries that feel that these companies are not paying enough taxes...
    I don't think you understand how this tax works.

    The tax imposed are to "stores" that are not in their country to begin with, so there is no diverting of profits to other countries. The country collects a sales tax or VAT from the buyers in their country, on these sales. If the "digital stores" were in the country, like a retail store, then the digital store would be paying a tax on their profits to the country they are located in. And if the products sold were not digital in nature and "imported" over the internet, the country would collect a tariff  to import the products that are sold in the retail stores in their country. 

    Put simply on how this tax is levied, with an example using a retail store in the US. If a person in CA bought an iMac on sale from a retail store in NY, the NY store will collect the CA 9.5% sales tax on the sale and remit it to CA. But the profit they make on the sale is taxed in NY because that''s where the store (and the iMac) are located. But with this tax, it would be like if CA also taxed the NY store a certain percentage of the sale because the store in NY is profiting from a sale made in CA. Even though the iMac was never in CA, until it was shipped to the person that bought it.   

    And here's the problem with the tax. The tech companies in the US (or whatever country they are located), from where the sales are made, will deduct this tax from their net revenue as a cost of doing business. So the country where they are located will end up collecting less corporate tax on the profit. Which the US will make up by increasing the tariff on products from those countries imposing this tax. 

    Or developers getting less from each sale. So developers like Epic would not only have to pay 30% to the various app stores for in-app sales, they would also have to pay the UK a small percent of the in-app sales made by Fortnight players in the UK. Spotify and Apple would have to pay the UK a tax to stream music to UK subscribers. So would Netflix with streaming movies. Google would have to pay a tax to the UK, on how much they make placing ads in Google Map for the UK. And so on with any sales involving digital goods. Which will ultimately get passes on to their customers the form of higher cost for their products. 
    I am not talking about how this tax works, I am talking about why these countries felt the need too create a new tax - because the stores haven’t been paying enough corporate taxes locally...
    And actually the stores are in their countries, there are legal entities in the UK, Spain, etc that represent the digital stores, and they operate in those countries under a local legal framework, which for most countries in Europe is stipulated at the EU level. The actual payment processing is the thing that is done in another country (in Europe something like Luxembourg), while the actual profits end up in yet another country (in Europe something like Ireland), where they pay corporate taxes. Since it is hard change that legal framework, because it envolves international agreements, they instead opted to create new taxes, so that this economic activity can be taxed in their countries. It is delusional to think that US companies don’t pay corporate taxes in other countries.
    But that is the EU fault, not the corporations. The countries in the EU are set up like the States in the US. To do business in the EU, you only need to set up your corporate headquarter in any one of the countries that makes up the EU. A corporation whose HQ is in Ireland can do business in all the other EU countries and only have to pay corporate tax in Ireland. That is how it's set up. Just like in the US, where corporations do not have to pay corporate taxes in every State they do business in, just the ones where they have their HQ. Many will set up their US HQ in (and now many are moving to) States with the lowest corporate tax rate. So corporations do not have to set up a HQ in every country of the EU, if they want to sell their products in any EU country. 

    You are still confusing a "digital store" with a physical brick and mortar store. Anyone with the internet do not need to visit a physical store to buy digital goods. Do Epic have a physical store from which Fortnight players can purchase their virtual digital outfits and fancy looking pick-axes? Well, this tax wants to tax Epic on those sales. Apple is already saying that they will collect this tax from iOS developers on in-app purchases, if they have to. Do large developers using app stores over the internet, have a physical store in these countries that are levying taxes on digital goods bought from stores on the internet? And yet, this tax will affect large developers selling digital goods and services. 

    What this tax is most like is an "internet tax", that our government kept  mentioning since the internet boom in the 90's, but kept burying, due to its unpopularity here in the US. Until 2016 where it was buried for good.  With an "internet tax", anyone using the internet to sell or buy goods will have to pay an "internet tax" levied by the Federal government. This has absolutely nothing to do with retail stores and how they might be diverting their profits to other countries. 

    https://en.wikipedia.org/wiki/Internet_tax ;

    http://www.dslreports.com/shownews/Congress-Passes-Permanent-Ban-on-Broadband-Taxes-136284
    watto_cobra
  • Reply 12 of 27
    ppietrappietra Posts: 223member
    davidw said:
    ppietra said:
    davidw said:
    ppietra said:
    Digital stores should be taxed like any retail store... but that can only be feasible if stores don’t divert their profits to some other country, and the problem is stores divert profits to another country... So I think it is quite understandable that there are countries that feel that these companies are not paying enough taxes...
    I don't think you understand how this tax works.

    The tax imposed are to "stores" that are not in their country to begin with, so there is no diverting of profits to other countries. The country collects a sales tax or VAT from the buyers in their country, on these sales. If the "digital stores" were in the country, like a retail store, then the digital store would be paying a tax on their profits to the country they are located in. And if the products sold were not digital in nature and "imported" over the internet, the country would collect a tariff  to import the products that are sold in the retail stores in their country. 

    Put simply on how this tax is levied, with an example using a retail store in the US. If a person in CA bought an iMac on sale from a retail store in NY, the NY store will collect the CA 9.5% sales tax on the sale and remit it to CA. But the profit they make on the sale is taxed in NY because that''s where the store (and the iMac) are located. But with this tax, it would be like if CA also taxed the NY store a certain percentage of the sale because the store in NY is profiting from a sale made in CA. Even though the iMac was never in CA, until it was shipped to the person that bought it.   

    And here's the problem with the tax. The tech companies in the US (or whatever country they are located), from where the sales are made, will deduct this tax from their net revenue as a cost of doing business. So the country where they are located will end up collecting less corporate tax on the profit. Which the US will make up by increasing the tariff on products from those countries imposing this tax. 

    Or developers getting less from each sale. So developers like Epic would not only have to pay 30% to the various app stores for in-app sales, they would also have to pay the UK a small percent of the in-app sales made by Fortnight players in the UK. Spotify and Apple would have to pay the UK a tax to stream music to UK subscribers. So would Netflix with streaming movies. Google would have to pay a tax to the UK, on how much they make placing ads in Google Map for the UK. And so on with any sales involving digital goods. Which will ultimately get passes on to their customers the form of higher cost for their products. 
    I am not talking about how this tax works, I am talking about why these countries felt the need too create a new tax - because the stores haven’t been paying enough corporate taxes locally...
    And actually the stores are in their countries, there are legal entities in the UK, Spain, etc that represent the digital stores, and they operate in those countries under a local legal framework, which for most countries in Europe is stipulated at the EU level. The actual payment processing is the thing that is done in another country (in Europe something like Luxembourg), while the actual profits end up in yet another country (in Europe something like Ireland), where they pay corporate taxes. Since it is hard change that legal framework, because it envolves international agreements, they instead opted to create new taxes, so that this economic activity can be taxed in their countries. It is delusional to think that US companies don’t pay corporate taxes in other countries.
    But that is the EU fault, not the corporations. The countries in the EU are set up like the States in the US. To do business in the EU, you only need to set up your corporate headquarter in any one of the countries that makes up the EU. A corporation whose HQ is in Ireland can do business in all the other EU countries and only have to pay corporate tax in Ireland. That is how it's set up. Just like in the US, where corporations do not have to pay corporate taxes in every State they do business in, just the ones where they have their HQ. Many will set up their US HQ in (and now many are moving to) States with the lowest corporate tax rate. So corporations do not have to set up a HQ in every country of the EU, if they want to sell their products in any EU country. 

    You are still confusing a "digital store" with a physical brick and mortar store. Anyone with the internet do not need to visit a physical store to buy digital goods. Do Epic have a physical store from which Fortnight players can purchase their virtual digital outfits and fancy looking pick-axes? Well, this tax wants to tax Epic on those sales. Apple is already saying that they will collect this tax from iOS developers on in-app purchases, if they have to. Do large developers using app stores over the internet, have a physical store in these countries that are levying taxes on digital goods bought from stores on the internet? And yet, this tax will affect large developers selling digital goods and services. 

    What this tax is most like is an "internet tax", that our government kept  mentioning since the internet boom in the 90's, but kept burying, due to its unpopularity here in the US. Until 2016 where it was buried for good.  With an "internet tax", anyone using the internet to sell or buy goods will have to pay an "internet tax" levied by the Federal government. This has absolutely nothing to do with retail stores and how they might be diverting their profits to other countries. 

    https://en.wikipedia.org/wiki/Internet_tax ;

    http://www.dslreports.com/shownews/Congress-Passes-Permanent-Ban-on-Broadband-Taxes-136284
    You keep confusing what I am talking about - I was not talking about what this tax is, I am talking about governments not getting taxes from corporate economic activity in their countries, and felling the need to tax them in some way (even if it isn’t through real corporate taxes.), while, not burdening other people and businesses even more.
    European countries are not like US states, far from it. What the EU does is harmonise some rules, and facilitate business across borders... Countries are sovereign nations and
    are free to do a lot of things that a US states cannot do. Having an EU HQ does not mean that multinationals don’t have to pay corporate taxes in different EU countries, even from doing business through the internet, you really should learn a bit more about Europe.
    I am not confusing Digital Store with Physical stores. Apple has businesses in some EU countries that handle some of its digital store dealings with local costumers and developers... it’s the payments that are handle is just one country. These digital stores don’t operate in these countries in a vacuum. Being an internet service does not make it legitimate not to be taxed.
    muthuk_vanalingam
  • Reply 13 of 27
    OSBIEOSBIE Posts: 1member
    Maybe if these companies would pay tax fairly in the first place politics wouldn't need to be invloved.
    I love apple products but Apple's UK stores paid £6.2m in tax despite earning £1.4bn in sales last year.
    As a business owner I pay nearly 40% on my businesses earnings. Apple pays something less than 1%!
    avon b7
  • Reply 14 of 27
    GeorgeBMacGeorgeBMac Posts: 9,013member
    avon b7 said:
    In the same way that non-US sovereign nations are free to tax anyone how they see fit within treaty frameworks, the US is also free to do the same, be it 'retaliatory' or not. 

    How it will be seen outside the US on a political level is something the US will have factored in and accepted, so no issues there either. 



    No issues?   LOL....   How is war -- whether it be a shooting war, nuclear war, cold war, ideological war or trade war -- have "No Issues"?

    If nothing else, the war itself creates those issues!  |
    ....  "An eye for an eye...."
  • Reply 15 of 27
    GeorgeBMacGeorgeBMac Posts: 9,013member

    ....
    The USTR's retaliatory tariffs would tax imports as much as 25% annually from a list of countries that includes the U.K, India, Spain, Italy, Turkey, and Austria.

    The countries currently charge anywhere from a 2% to 5% tariff on digital-services revenue for various online activities. Details vary by country but apply to income from online areas like digital marketplaces, advertising, software-as-a-service, social media, and search engines.

    Among the countries imposing digital taxes on U.S. firms, the USTR estimates that the U.K. takes in the most, at $325 million annually.

    The retaliatory tariffs would apply to physical imports. They would cover an eclectic range of products, including caviar, fairground amusements, telescopes, and shrimp.

    ...

    I wonder if this is coming from left-over protectionist, isolationist shills from the past administration?
    It's largely incompatible with the goals of the current administration.   Yesterday for example the Treasury Secretary announced:

    Yellen calls for minimum global corporate income tax

    "Citing a “30-year race to the bottom” in which countries have slashed corporate tax rates in an effort to attract multinational businesses, Yellen said the Biden administration would work with other advanced economies in the Group of 20 to set a minimum.

    “Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids,” Yellen said in a virtual speech to the Chicago Council on Global Affairs. “It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods.”

    In other remarks, she also said that U.S. isolationist policies were dead and gone.  That the U.S. had to rejoin the global community to survive.

    So, where does the USTR come off telling other countries how their tax system should work?   I'm not sure how other nations will react to continued U.S. Authoritarianism.
  • Reply 16 of 27
    avon b7avon b7 Posts: 5,597member
    avon b7 said:
    In the same way that non-US sovereign nations are free to tax anyone how they see fit within treaty frameworks, the US is also free to do the same, be it 'retaliatory' or not. 

    How it will be seen outside the US on a political level is something the US will have factored in and accepted, so no issues there either. 



    No issues?   LOL....   How is war -- whether it be a shooting war, nuclear war, cold war, ideological war or trade war -- have "No Issues"?

    If nothing else, the war itself creates those issues!  |
    ....  "An eye for an eye...."
    No issues in the sense that this is how business has always been done between blocs. 

    Eye for an eye, tit for tat or whatever you want to call it.

    It would be different if one of the parties was abusing its leverage to make the other buckle under the strain but that isn't the case here. Although the UK and Brexit consequences may see that happening at some point in that particular case. But then again, the UK would have put itself into a weak position, and wilfully. 

    Every sovereign state has the logical right to manage its trade affairs as it sees fit. Sometimes there will be treaties which may limit the scope of action but they can take their own decisions and live or die (economically speaking) by them.

    The US, in this case, obviously has the same right.

    Something completely different is an escalation in measures which lead to dramatic changes in the status quo.

    In this case the EU/US trade agreement may be impacted but most Europeans would probably celebrate that. 


    muthuk_vanalingam
  • Reply 17 of 27
    GeorgeBMacGeorgeBMac Posts: 9,013member
    avon b7 said:
    avon b7 said:
    In the same way that non-US sovereign nations are free to tax anyone how they see fit within treaty frameworks, the US is also free to do the same, be it 'retaliatory' or not. 

    How it will be seen outside the US on a political level is something the US will have factored in and accepted, so no issues there either. 



    No issues?   LOL....   How is war -- whether it be a shooting war, nuclear war, cold war, ideological war or trade war -- have "No Issues"?

    If nothing else, the war itself creates those issues!  |
    ....  "An eye for an eye...."
    No issues in the sense that this is how business has always been done between blocs. 

    Eye for an eye, tit for tat or whatever you want to call it.

    It would be different if one of the parties was abusing its leverage to make the other buckle under the strain but that isn't the case here. Although the UK and Brexit consequences may see that happening at some point in that particular case. But then again, the UK would have put itself into a weak position, and wilfully. 

    Every sovereign state has the logical right to manage its trade affairs as it sees fit. Sometimes there will be treaties which may limit the scope of action but they can take their own decisions and live or die (economically speaking) by them.

    The US, in this case, obviously has the same right.

    Something completely different is an escalation in measures which lead to dramatic changes in the status quo.

    In this case the EU/US trade agreement may be impacted but most Europeans would probably celebrate that. 



    There is a difference between managing affairs and tit-for-tat trade wars, protectionism, etc...
    In the end, dumping and protectionism are simply two sides of the same coin.  And its why we have organizations like the WTO.  When countries indulge in tit-for-tat trade wars everybody loses (except the 1%)

    It's why we have international rules of order that support global trade.
  • Reply 18 of 27
    avon b7avon b7 Posts: 5,597member
    avon b7 said:
    avon b7 said:
    In the same way that non-US sovereign nations are free to tax anyone how they see fit within treaty frameworks, the US is also free to do the same, be it 'retaliatory' or not. 

    How it will be seen outside the US on a political level is something the US will have factored in and accepted, so no issues there either. 



    No issues?   LOL....   How is war -- whether it be a shooting war, nuclear war, cold war, ideological war or trade war -- have "No Issues"?

    If nothing else, the war itself creates those issues!  |
    ....  "An eye for an eye...."
    No issues in the sense that this is how business has always been done between blocs. 

    Eye for an eye, tit for tat or whatever you want to call it.

    It would be different if one of the parties was abusing its leverage to make the other buckle under the strain but that isn't the case here. Although the UK and Brexit consequences may see that happening at some point in that particular case. But then again, the UK would have put itself into a weak position, and wilfully. 

    Every sovereign state has the logical right to manage its trade affairs as it sees fit. Sometimes there will be treaties which may limit the scope of action but they can take their own decisions and live or die (economically speaking) by them.

    The US, in this case, obviously has the same right.

    Something completely different is an escalation in measures which lead to dramatic changes in the status quo.

    In this case the EU/US trade agreement may be impacted but most Europeans would probably celebrate that. 



    There is a difference between managing affairs and tit-for-tat trade wars, protectionism, etc...
    In the end, dumping and protectionism are simply two sides of the same coin.  And its why we have organizations like the WTO.  When countries indulge in tit-for-tat trade wars everybody loses (except the 1%)

    It's why we have international rules of order that support global trade.
    Yes, but AFAIK, things haven't escalated beyond what established rules allow for. At least yet. 
  • Reply 19 of 27
    davidwdavidw Posts: 1,134member
    OSBIE said:
    Maybe if these companies would pay tax fairly in the first place politics wouldn't need to be invloved.
    I love apple products but Apple's UK stores paid £6.2m in tax despite earning £1.4bn in sales last year.
    As a business owner I pay nearly 40% on my businesses earnings. Apple pays something less than 1%!
    That's  a load of BS. Learn how taxes are applied before making more of a fool of yourself, with anymore comments like this one. 

    Taxes are applied to profits, not earnings. Even in the UK. If you sold a product for $100 but it cost you $80 worth of material and labor to sell it, you earned $100 in revenue but only pay taxes on the $20 profit. (providing the $80 cost includes rent, electricity, water, gas, security, furnishing and other cost of operating a store from which to sell your product). The average World corporate tax rate is about 25%. So if we use that number,  that would come to $5 in taxes on your profit. Or 5% of earnings.  

    https://www.imore.com/apple-paying-exactly-right-amount-uk-tax-despite-what-youve-read


  • Reply 20 of 27
    chadbagchadbag Posts: 1,291member
    ppietra said:
    lkrupp said:
    chasm said:

    Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
    This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
    With that kind of logic no company should pay taxes, which is insane! Companies that have multibillion dollar profits can certainly pay more corporate tax without needing to raise prices. And there is a limit to how much companies can raise prices, otherwise they will lose sales and profits! What governments should avoid is increasing taxes that have a direct impact on price of goods
    That is not how it works.  The cost of corporate taxes flows through to the customer.   That is how business works.  Everyone would be actually better off with no corporate / business tax.   The maxim is you tax the things you want less of and reduce or eliminate taxes on things / behaviors you want more of.   You want more economic activity?   Reduce or eliminate taxes on it.   Workers will get paid more and companies will invest more, which in the end will mean more and better economic activity which will lead to better wages -- which get taxed.  The government will get its share in the end anyway.   
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