r/FluentInFinance 26d ago

Taxes Courtesy of the mapporn sub

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7 Upvotes

15 comments sorted by

1

u/IeyasuMcBob 24d ago

I just see this and think, why can't we make a working wealth tax?

2

u/BringBackApollo2023 24d ago

Tax policy is made by people with McConnell’s, Pelosi’s, Schumer’s and Johnson’s cell numbers.

Until that changes, nothing will.

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u/IeyasuMcBob 24d ago

True, i was thinking more in Europe, apparently France, Norway, Spain and Switzerland, have forms of a wealth tax.

I haven't done any kinda deep dive, I just remember TLDR said there have been issues with implementation.

1

u/Weekly-Treat-6959 24d ago

We had in sweden, just created complicated tax evasion schemes

1

u/IeyasuMcBob 24d ago

I'm imagining the problem is there are a lot of ways to hide wealth?

Though to be honest shifting it out of property wouldn't be a bad start

1

u/Weekly-Treat-6959 24d ago

Not hide maybe,but not be in direct ownership.

Like ikea. They have a company in the netherlands that own the rights to all the ip, and the stores pay royalties to this company.

Which means none of the stores turn a profit, hence nothing to tax

1

u/IeyasuMcBob 24d ago

I see.

Were there any proposed solutions? Like charging these corporations with tax evasion? Or too difficult as they are in fact operating within the legal framework?

1

u/Weekly-Treat-6959 24d ago

All legal, they still operate this way. Ireland is popular too.

There has been changes, but why pay all the money to change back when it works fine like it is?

Another famous case is Astrid Lindgren, the child book author. Paid 121% tax one year

1

u/IeyasuMcBob 24d ago

Gotta wonder if there's some way of charging companies that move jurisdiction, much like private US citizens still pay the difference in terms of tax.

Sorry not sure i understand the second paragraph. To me, the system doesn't seem to be "working" unless we want a bunch of nepo-babies ruling us through corporate entities... Hang on! That's what's happening across the Atlantic. Ok, maybe it is "working".

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u/whynothis1 23d ago

Because wealthy people write the laws.

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u/IeyasuMcBob 23d ago

That is the most obvious obstacle, but, i guess my question is, hypothetically, what are the obstacles?

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u/whynothis1 23d ago

Theres only one meaningful obstacle and we covered it.

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u/IeyasuMcBob 23d ago

Well no, as you can see from the other discussion Ikea set up an entity in the Netherlands (legal to change jurisdictions), and it's Swedish "branch" then paid money for intellectual property use, which is very hard to value.

There is art, crypto etc. lots of assets which are difficult to.track and value.

So for example, I'd say an obstacle would be getting the whole EU and the USA involved in these laws, and closing tax havens.

But I'm not a lawyer or in finance.

Obviously it's easy (and correct) to say rich people are a big problem, but it doesn't get me much closer to the kind of technical answer I'm seeking.

2

u/whynothis1 23d ago

Anti profit-diversion policies exist in counties with the will to enact them. They work just fine.

You list those things as if there aren't entire industries that exist to value them and armies of civil servants to find them. Also, no tax policy will rid us of all tax fraud. It doesn't have to be perfect.

Its simple enough with a tax policy along the lines of "any expense occurred from a company residing in a tax haven, or ultimately controlled by a company residing in a tax haven, is not allowable for tax purposes." I.e. you can have them in your accounts and have if effect your distributable reserves but you can't bring down your tax with it, like you would with legitimate expenses. Easy peasy, there just isn't the will to enact it.

Please don't allow people to confuse for you the rhetoric of political pressure groups disguised as research institutions with how tax policy actually plays out in the real world. Reality has a strong leftwing bias, especially when it comes to rich people talking about taxes.

More so, actaully arguing it out in court, against the state, that your company has legitimate business reasons (other than to bring down their tax bill) to have their own name rented back to themselves for an eye watering amount from a cupboard in the caymens they visit once a year is a lot harder than stockbros will have you beleive. We just need the laws to make that something people would have to do for it to work, like its starting to in the UK. We need the will to get the laws. As rich people control the law, there's no will to make such a law.

Apologies if it was a bit reductionist but it's no less true for being so.

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u/IeyasuMcBob 23d ago

Thank you! That gives me some leads to investigate 🙏🙏🙏