Comment by jmyeet

The complexity in the tax code is why we end up with things like AMT (Alternative Minimum TAx) and the 15% minimum corporate tax. There are so many carved-out special interest exceptions that it's almost impossible to unravel, like the carried interest tax credit for hedge fund management fees.

I think we've reached the point where we need revenue apportinment of profit. That means if 50% of your revenue comes from the US, then (at least) 50% of your profit is taxable in the US.

It's worth noting that there are various schemes for multinationals to avoid taking profits in the US. One of the most common is transfer pricing. Example: Company A sells sofas to US consumers for $1000. It buys them from subsidiary B (in Bermuda) for $900. Subsidiary B buys the sofas from Subsidiary C in China for $300 each. So $600 in profit is moved to a 0% tax haven like Bermuda. That's transfer pricing and it's illegal.

The Double Irish Sandwich is an example of profit shifting. What's the difference between profit shifting and transfer pricing? Profit shifting is legal. Transfer pricing isn't. That's functionally the difference.

So an argument against revenue appointment of profit is you can use similar schemes to hide profits but you really can't. For one, companies need to report profits to shareholders so the IRS has that data point. For another, the IRS can and does go after companies to figure out beneficial ownership and whether transactions really are at arm's length or not.

For anyone saying they can benefit from this by buying shares in $BIG_TECH$, I promise you that you would benefit more from that company paying taxes to fund the roads, bridges and schools that you would from your 100 shares going up by an extra 1%.