Polity: Global behemoths and tax
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David Hood, in reply to
I can buy that same Mac in the US for $1299. On a straight currency conversion that’s NZ$1900. Is an extra $500 per unit justified to get the product to NZ?
Are you adjusting for GST vs the still to be added on sales tax for the US state you are in?
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I do not wish, for one second, to be seen as supporting or applauding multinationals with billions in revenue, not paying their fair share and supporting our governments revenue base, which will help pay for government services and relieve the personal tax burden. on individual citizens...
I will however point out, that said companies, are generally required (by law ?), to maximise returns for shareholders... which obviously, includes not "spending" money that does not need to be spent... thus, it's not just a "moral" matter... they are obliged either by legal requirement or at least perceived duty, to minimise their tax exposure/payments by any LEGAL means possible...
Short version... Big companies will not be shamed into voluntarily coughing up more tax payments... it's the Laws that need to be changed so they don't have a legal way to avoid them...
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andin, in reply to
so they don’t have a legal way to avoid them…
Just as some people needed a god to be good,
so companies need laws to keep them being upstanding contributing patrons of society.
"Maximising returns for shareholders"?
Its a shitty argument -
FletcherB, in reply to
Just as some people needed a god to be good,
so companies need laws to keep them being upstanding contributing patrons of society.Yes, thats about the size of it... especially when large chunks of the shareholders are other companies or investment schemes... not just "mom+pop" investors who might be convinced that good corporate citizenship was a thing worth having.
“Maximising returns for shareholders”?
Its a shitty argumentI concur completely...
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Andrew Robertson, in reply to
I will however point out, that said companies, are generally required (by law ?), to maximise returns for shareholders… which obviously, includes not “spending” money that does not need to be spent… thus, it’s not just a “moral” matter… they are obliged either by legal requirement or at least perceived duty, to minimise their tax exposure/payments by any LEGAL means possible…
Yep. A company's first priority is to their shareholders. This essentially means they want to pay as little tax as possible within the law. If they do anything to lower shareholder value, they can be taken to court by the shareholders. So changing the law might gain NZ more tax revenue, but this would also encourage companies to consider whether having a NZ-based operation (in its current form) is maximising shareholder value. Catch 22 I guess.
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If they do anything to lower shareholder value, they can be taken to court by the shareholders.
Really? As a shareholder, director and manager I will call bullshit on this and similar claims. Companies create and destroy shareholder value every day. Nobody would take an executive position anywhere if this insanity prevailed.
But...it does reinforce an observation of the comments on this thread. The depth of learned helplessness is quite astounding. We can do stuff, even in NZ and it doesn't require international agreements or even local law changes, though those would be nice.
I have three ideas:
1. Ensure the government procurement rule around allowing economic impact assessment is fully enabled. Make sure the +tive economic impact of local business is fully recognised.
2. Have a public enquiry and get big pharma, Apple, Google, Amazon and Microsoft up on the stand.
3. Change some laws.
Tax is a complex and emotional thing and as a business it can feel very debilitating and overwhelming. But regardless of your position of who should pay it and how much they should pay, local companies tend to employ local people who pay local taxes. Use them.
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One thing that did bug me about the article was its bundling of Methanex (a local company) with profit-shifting multinationals for the sole reason that Methanex paid no tax on a reasonable profit. Methanex did so because it, entirely legitimately, had been carrying previous years' losses on the books and could thus deduct those losses from present profits. It's not at all like taking advantage of offshore parent companies and Irish offices and the other ways in which Apple et al avoid paying ethically-due taxes, and I was rather annoyed that the two were conflated.
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Andrew Robertson, in reply to
I stand corrected then. I know of a company with a clause like that in its shareholder agreement.
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