Economics and Finances: Taxation

CEEP 2024 Finances
1

Dear Pirates. We (Wietze and Danny) did try but failed to create a coherent story on taxation for the CEEP 2024. Yet we would like to share here some of the individual items that came up during our discussions.

Release early, release often, as the bazaar adage goes. Input, comments and text management is very welcome to create the narrative.

PART 1 (only two links are allowed, so parts)

Economics and Finance: Taxation Part one

Taxes

Pirates break monopolies. A healthy distrust towards large organizations, private and public, is the basis for our transparency policies and tax proposals.

With fair taxation, we can create more shared prosperity. Currently, labor is overtaxed and wealth undertaxed. Pirates want multinationals to contribute their just part. Raising taxes on hoarding money and depleting the planet, makes lowering taxes on labor feasible and encourages sustainable development.

Tax Rulings

Tax Rulings, negotiated primarily with large international corporations, are a pressing problem of our time. Due transparency is a far cry.

Tax on profit shifting

International tax competition and profit shifting have led to a large decline in effective corporate tax rates. Multinational companies with low effective tax rates in some foreign countries would have to make up this tax deficit in their home countries. The tax deficit is the difference between the amount a company pays in taxes worldwide and what it would have to pay if all of its profits were subject to an internationally agreed minimum rate in each of the countries in which it operates. Pirates want to collect the tax deficits of multinationals as taxes.

Tax avoidance schemes

Corporate extraction

Tax cuts for large companies are often used for share buybacks. Stock buybacks come at the expense of production resources, employee wages, the long-term viability of the company and the economy as a whole. A buyback of 50% in principle doubles the share value and should be taxed as income for the shareholder. Pirates want to tax stock buybacks.

A wealth tax on corporations’ stock

Pirates propose to institute a new tax on corporations’ stock shares for all publicly listed companies and large private companies headquartered in G20 countries. Each of these companies would have to pay 0.2% of the value of its stock in taxes each year.

^----------------------------> Part 1 <--------------------------------------------^

2 Likes
2

v-----------------------------> Part 2 <--------------------------------------------v

PART 2 (only two links are allowed, so parts)

Economics and Finance: Taxation Part two

Tax top incomes

Top managers are paid for market power. Empirical studies show that there is no relationship between cutting tax rates at the top and economic growth. The increase in top incomes did not translate into higher economic growth. The optimal tax rate takes into account (1) standard labor supply, (2) tax avoidance, (3) compensation bargaining.

Carbon Tax

To address the existential threat of climate change, Pirates propose a carbon tax.

Private Equity

Private Equity funds buy companies to extract money from them by overloading them with debt, without regard to future productivity. Lower taxes are basically a transfer of money from taxpayers to Private Equity, they increase profits without adding economic value. No matter how you look at it, it is clear that the returns to Private Equity companies far exceed the risks. Pirates want to tax the Private Equity partners’ part of the profits, “carried interest,” as ordinary income.

Financial Transaction Tax

High Frequency Trading (HFT) is the automated flash trading of securities: high volume transactions often with low margins. Other equity investors, including pension funds pay the price. A small tax on all financial transactions makes HFT for the larger part unattractive. Thus the markets become safer and less volatile. Extra revenue for the state treasury is a nice bonus. The financial transaction tax (FTT) is intended as a tool to encourage long-term, buy-to-hold strategies and patient investments.

^----------------------------> Part 2 <--------------------------------------------^

2 Likes
3

Here is part 3 of 3
v----------------------------> Part 3 <--------------------------------------------v

Excess Profits Tax

A crisis situation can disrupt supply and demand in the market, where some traders charge extortionate prices for their products. Typical profit margins range from 6 to 8 percent. A standard excess profit tax is a progressive tax on profits above 8 percent to prevent perverse incentives for manufacturers to exploit a crisis situation and further worsen the crisis. A new way is targeting the rise in stock market capitalization. This is easily observable, which makes the tax much harder to avoid than standard excess profit taxes. Pirates support to tax the rise in the stock market capitalization of companies that benefit from extraordinary circumstances.

1 Like
4

Hello Danny, I am for now just looking for who has been writing the chapters and who is wearing the hat as a total coordinator of the “Economics and Finances” Chapter. I like your (and Wietzes) taxation programme. As soon, as I will have found your “Chapter Boss”, we will, or even more, you as a group will talk about your final version. Incredibly pleased to work with you all, bestbest, yours Mia /purple heart :slight_smile:

1 Like
5

Hi Mia, I think we managed to consolidate all the scattered contributions to the “Economy and Finance” chapter to the “Economy and Finances Chapter (official version from the joint collaboration)” thread. I think the taxation/competitive environment subchapter is still a living topic over there though :slight_smile:

6

Thank you, Petr! Just have a look here, then you see which direction it goes :slight_smile: CEEP 2024 - overview - Tabulky Google

Best best, Mia

1 Like
7

Ok, Petr, Danny just invited me to your signal working group Economics and Finances. I also invited Bastian there … and I think, it will be fantastic, because the Dutch are very ambitious :slight_smile: So, i trust you all big time, to lance a great Chapter on this. Have a good WE, best Mia

1 Like