There was an interesting comment on the TaxProf blog in the last few days. Discussing the US tax base for overseas profits it noted:
In order to take advantage of the foreign tax credits allowed under our tax system, U.S. companies are required to report on their annual tax returns, on form 1118, the amount they earn in each country where they operate and how much they pay each country in taxes.
Hang on a minute: that's the data needed for country-by-country reporting.
In other words every US multinational corporation has all the data needed for country-by-country reporting already.
There will be no additional cost on them.
A point worth noting, I think.
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[This for the moderator, seeking to round off more acceptably the closed comment removed from ‘recent posts’ on the related topic of “Now we can have all the services we want”, April 27, 2011].
As this has been a public discussion, let me round off my side of it by saying what I said at the beginning: that I agreed with your headline, and agree that had Keynes’s advice been followed instead of distorted, we wouldn’t have the present problem. But his was a “macro” solution; with computerised tills and stock control the facilities are already available for a “micro” equivalent. It was also conceptually complicated, like the “birds nest” wiring in pioneering electronic systems.
My own job in life has been not so much any radical pioneering invention as reducing complication in these to ordered complexity. Keynes would be so much easier for novices to understand were economics explained as a steering (cybernetic) system, in which slight sideways errors will accumulate until they need correction by repositioning ; in which positive feedback will induce a fleet to both follow and flee with its leader. Using the same cybernetic logic, the neo-Classical leader turns out to be like a rudderless ship, where the only control is going faster or slower; or (with equilibrium in mind), like a voltage stabiliser controlling nothing but its own voltage. What I have been saying (as a control and computer system developer to a tax-man) is that, given autopilot logic on the internet, a time-sharing computer can steer a thousand ships independently. I trust there has been nothing impertinent in that.
I think that description of what economics should be quite a good one
And I enjoyed your contribution
As I yours.
Tidying up my copy of this discussion I found this, where again I agree with your conclusion but have another view of the argument:
“[T]he sad fact is that the EU is built on the logic of open markets that benefit the richest in the community, [who] consume all the goods they want as indication of their ability to conspicuously consume. As a result the same EU ‘free trade’ logic is indifferent to the needs of the middle and poor in every European country, let alone the unemployed. That means many of the measures that might make sense when faced with our current problems, like increasing VAT on goods but not services, cannot work because they would be illegal under current EU law. But we can do much to solve this problem”.
The sad fact is that, though the European Commission was set up by Catholic politicians to give advice, European governments have been influenced by monetarist politicians to rubber stamp and enforce its advice as if it were an Anglo-American style legislature. Making that clear is something else we can do to help resolve the problem.
The EU has been captured by big business and is busy destroying the previously strong labour laws of the original member states.
It is an important point to note that CbyC reporting creates no additional compliance costs on US Multinationals. Thanks Richard.