Extreme, shocking inequality,
Elon Musk, CEO of Tesla was paid $595M – this is 10k times the median salary of the company i.e. $60k. Tim Cook, CEO of Apple was paid $134M – more than 2.3k times the median salary of the company i.e. $57.6k. Sundar Pichai, CEO of Alphabet was paid $86M – 350 times the median of $246,804. The pay levels of USA CEOs have increased by 940% since 1978!
Amidst this, San Francisco voters overwhelmingly backed a new law. This levy adds an extra 0.1% tax on companies that pay their CEOs more than 100-times the median of their workforce.
🎌 Japan’s Entry & China’s Crackdown
Financial firms are leaving Hong Kong because of the ‘new scrutiny’ from Beijing. While Japan is already a financial power with a stable stock market exchange, it is eyeing to become an international financial hub. But reaching there is a Catch-22 for Japan!
The crux of the matter, taxes. Japan is at a serious tax disadvantage compared to Hong Kong. Hong Kong has a top income tax rate of 17% compared to Japan’s 45%. To tackle this, the government plans to implement tax incentives for long-term foreign residents. Under the current system, Japan imposes an ‘inheritance tax’ on foreigners’ overseas assets if they live in the country for 10 years. And hence a lot of foreigners leave the country after that. The new measure will allow them to be exempted from this tax.
“It will deliver a message we want them to live longer and work longer in Japan”
Grasping at straws, English. Japan’s bureaucracy might be very difficult to navigate due to the low level of English and the layers of government. Due to the vast cultural and language differences, it sometimes gets very difficult for foreigners to think about a future in Japan. To prepare and accept more foreign institutions and funds, the ministry will now set up an office to advise them in ‘English!’
At their wit’s end, Singapore gives major competition. Would you still set down your roots in Japan, with countries like Singapore offering a more competitive tax rate of 22%? And Hong Kong is undeniably the gateway into China.
Japan recognizes the need for change. But it faces entrenched domestic resistance.
👇Ah, And Also This
🧳 Venice Values its Visitors – Venice had proposed a so-called ‘Tourist Tax’ in Venice which adds up to £3 (INR 264.11) for a quiet day and going up to £10 (INR 880.36) for the busiest of days. Unlike the existing levy for stays in hotels or rented accommodation, it would apply to day-trippers, including those who arrive on cruise ships. But Venice was deserted by the flocking-year-round-tourists when coronavirus swept through. The City of Canals now has a gesture to help encourage the return of tourists – the proposed tax will be deferred till January 2022!
💰 Notices sent! Collections to begin from December! France will start collecting the GAFA aka the digital taxes from Tech Giants if they don’t find a middle ground. The country has chosen ‘not to wait’ due to the earlier tussle it had with the USA. There are two major requirements:
- You generate more than €750 million in revenue globally and €25 million in France.
- And you’re operating a marketplace (Amazon’s marketplace, Uber, Airbnb…) or an advertising business (Facebook, Google, Criteo…).
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🤖 The World’s First Robot Tax – Crazy Tax Story
The year 2017 – The south Korean Government introduced the world’s first Robot Tax! It’s kind of funny – asking robots to pay their fair share of taxes! But the looming automation crisis should be taken into serious account. Bill Gates was one of the first to talk about it.
A universal basic income is an idea that humans will need a basic income because robots will do all the work that needs to be done and humans will have nothing to do. And if they have no work, humans will have no money, maybe not even enough for basic requirements – unless they receive an income from the government or through some other system. And how do you even define a robot to tax it? And taxing innovation is a sure way to make a country poorer.
S. Korea – the most robotized country – decreased tax deduction for companies investing in automation by two percentage points. Therefore, it was not so much of a tax as the reduction of a tax break.
The tax has received enough criticism that it will be detrimental to businesses and impede innovation. But robots are less likely to replace humans in roles that require critical thinking and creativity. Bottom line is, we may not want to tax innovation, but there is no reason to subsidize investments that are designed merely to take away jobs. At the very least, a tax on robots would force businesses to think harder about when and where to deploy them.