I believe most countries would like to tax companies on profits generated from their countries. But using financial and legal juggling, corporations end up paying zero or very low corporate tax. In bizarre scheme of events, companies can make big profits but pay no taxes if they are located in low tax havens. In fact Switzerland was kind of forced to accept this rule. Of course at that time US was supporting it too because their tax rate was higher.
But now Trump wants to reduce corporate tax rate in US and want to avoid getting trapped by a min 15% . So as usual , policy change because agreements donât matter these days.
We shouldnât mix consumption tax like VAT with corporate tax. Consumption tax is paid by consumers which normally result in higher prices for consumers. Corporate tax comes from profit of the companies.
Employee compensation is cost and not profit for the corporation. All taxes you are referring to are not paid by Amazon, they are paid by people who live in Germany or wherever they are located . But the discussion is about tax paid by company from profit they earn.
If we simply look at VAT or income tax on salaries and consider them to be enough, then all corporate taxes should be set to zero because all companies employ people and all products from all companies are subjected to VAT%. But this would result is serious shortfall of revenues for Govt.
They are indirectly paid by Amazon since they employ the people, who in turn then pay taxes. I understand that it is only about CIT, but I look at the total taxes a government receives, and VAT is one of them. Amazon sells a lot of products, which in turn generates VAT revenue for the government, and so on.
Maybe itâs just me, but I donât like that some bureaucrats make some arbitrary rules with the help of the government because those canât get their spending under control - but this is political.
Letâs see how it plays out since the US, which actually started it, just âabolishedâ it. Fun fact, theUS eliminated the tax treaty with Hungary(US â Update: U.S. Treasury Terminates Tax Treaty with Hungary) in part because they didnât want to implement the framework.
That I can agree on!!!
Anyways, I now received different viewpoints from you, which helped me to understand the situation better. Thank you.
Letâs see how the market will react to nVidiaâs earnings tomorrow. The last few times it beat but didnât roflpwn earnings the market reacted like a kid who dropped their lolipop. I have the feeling that if they beat earnings again itâd be Greenland on Friday.
Fwiw the issue is more egregious for service based companies. Netflix, pharma, amazon (the service part with aws) etc can make a ton of profit from accessing specific market but then will make their local subsidiaries just break even (no profit) and just shift everything as licensing fee to some other shell company in a low (or no) tax jurisdiction.
I donât think CHF strength will continue for long. CHF went up because of trade war and not because of tariffs per se
When trade war is over and we conclude with X% tariffs, the need for safe heaven will also reduce. But because of higher inflation in US vs CH over last few years, we should expect CHF/USD to settle higher than previous support levels
I also think if USD lose its share in reserve currency market, it would actually go to Euro & Yuan. CHF doesnât seem to be a big enough contender in this space
But letâs see what happens. No one wants very strong currency and deflation.
I think long term CHF will be in an uptrend due to currencies somewhat following purchasing power parity, and CHF inflation being very low. That said, USD definitely had some other effects pushing up the currency, like the popularity of investing into the USA. The real question IMO is whether we overshot for a while or not. ~10% in a year is a lot for currencies to move.
(Taco = Trump always chickens out) what an absolute bellend, â6 months ago the country was deadââŠso he round tripped to where Biden left it?
Should be biggly green today.
Edit: more seriously the US needs to show that the rule of the law cannot be subverted so easily. Mega bullish for the time Taco man is no longer with us.
Yeah. I personally think the 10% will stay either way but also believe that much of the extreme movements are largely over so Iâm both short- and long-term bullish. Probably will resume buying regularly next month, but have grown rather fond of the cash buffer.
As Iâd written here or in another thread, Iâm considering actually doubling down and bringing my US allocation higher (80%, up from 70%) especially considering that Iâd buying USD with CHF.
Most of them. If the administration deigns to follow court orders - a disclaimer one has to make these daysâŠ
The court ruled in favor of a permanent injunction, potentially grinding Trumpâs global tariffs to a halt before âdealsâ with most other trading partners have even been reached. The court ordered a window of 10 calendar days for administrative orders âto effectuate the permanent injunction.â That means the bulk â but not all â of Trumpâs tariffs would be put in a standstill if the ruling holds up in appeal and, potentially, with the Supreme Court.
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