NightFox
Wildling
- Thread starter
- #161
Once again, that's situationally dependent on the particulars of the asset you're invested in.It depends on the circs of the company at that point in their cycle. Most investors would prefer the cash in their account than, for example, a share buyback. Well I would anyway.Not at all, if the IRR for reinvestment is 2% in a mature market company why would I want to lock away capital in that when I can make say a compounding 10% elsewhere just to avoid one off capital gains? This is why you see most companies in mature markets paying out substantial portions of profits in dividends, their IRR is generally too low to justify not paying them out, if they didn't pay them out people wouldn't want to invest in them in the first place (i.e. lower demand for equity shares = lower stock price).Its a bit different over here. You would need to be pretty dumb to pay tax on your dividens .That's only partially accurate Tommy , generally speaking a corporation will only invest profits back into itself if the Internal Rate of Return makes sense to shareholders for it to do so, otherwise it will distribute those profits back to shareholders in the form of dividends so that shareholders can invest in other assets that offer higher rates of return.You seem to be very confused about taxation and its effects.Higher taxes always kill investment, moron. The money collected in additional taxes would have been invested. Even a fifth grader can understand that.How does this proposal “kill investment”?Are you referring to the proposed 15% minimum GMT? If so, are you aware that’s significantly LOWER than the current U.S. corporate tax rate? Are you also aware that there is a possibility that U.S. citizens will pay LESS in taxes and retain MORE domestic business activity from this proposal. Again, why do you want to pay taxes to subsidize foreign countries?God damn bro they are making up a number out of thin air, that you must payDunno, there aren’t any details of the enforcement mechanisms that have been made available yet. If I had to guess, the enforcement mechanisms will center around tariffs.To be enforced by whom?Source: CNBC.COM
Link to story: 130 nations agree to support U.S. proposal for global minimum tax on corporations
“WASHINGTON - Treasury Secretary Janet Yellen announced Thursday that a group of 130 nations has agreed to a global minimum tax on corporations, part of a broader agreement to overhaul international tax rules.
If widely enacted, the GMT would effectively end the practice of global corporations seeking out low-tax jurisdictions like Ireland and the British Virgin Islands to move their headquarters to, even though their customers, operations and executives are located elsewhere.
“For decades, the United States has participated in a self-defeating international tax competition, lowering our corporate tax rates only to watch other nations lower theirs in response. The result was a global race to the bottom: Who could lower their corporate rate further and faster? No nation has won this race,” said Yellen in a statement on the accord.
“Today’s agreement by 130 countries representing more than 90 percent of global GDP is a clear sign: the race to the bottom is one step closer to coming to an end,” Yellen said.
The deal also reportedly includes a framework to eliminate digital services taxes, which targeted the biggest American tech companies.
In their place, officials agreed to a new tax plan that would be linked to the places where multinationals are actually doing business, rather than where they are headquartered”
Interesting, I’m surprised the GMT proposal is moving this quickly after it was endorsed by the G-7 just a short time ago, looks like that now 90% of the worlds GDP has agreed to it in principle. Frankly I didn’t really believe it would get this far given all the hurdles. The agreement on digital service taxes is also an important plus for the American Tech Sector, surprised the EU is going along with it.
This will be a big foreign policy win for the Biden Administration if it does actually come to fruition, of course there is still a long way to go.
Where is the problem with “sovereignty” here? This is something that nations are free to agree to or not agree to, not to mention each nation still retains direct authority over its own tax code. It’s no more a violation of sovereignty than an international arms limitation treaty.Does national sovereignty mean anything at all to you?
I see all kinds of potential things wrong with it, however I see A LOT more wrong with the current system of exploitation being practiced by large multinational corporations.You don't see anything wrong with this?
Killing investment is a great way to increase jobs. I see why you like it
A tax like this will actually increase investment because corporations would rather spend money on their company than pay it in taxes. Any management that didnt feel like that would not be in place for long.
So the money gets invested in R and D or new plant or refurbs or more people. Its all good as it generates growth in the economy.
Do you understand this or shall I try and simplify it for you ?
You see Amazon reinvesting profits because their growth rate and thus IRR is so high, you see General Motors distributing attractive dividends because its growth rate is so low (mature market), if GM wasn't offering an attractive dividend yield who the heck would want to invest in them over investing in Amazon?
Generally speaking I prefer an investment that yields a rate of return that's higher than the rate of inflation to having cash in my account, after all "cash" (i.e. fiat currency) is a continuously depreciating asset, unless of course you're talking about CRYPTO CASH.