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LanceLetter: Global Tech Tax Games; Fastly Upends Internet; Facebook Watch



June 14 · Issue #233 · View online

Stuff that matters.

Written while playing with retro tech

Haven't gotten a page in years
Haven't gotten a page in years
Leveling the global tax and tech field
For years, I’ve marveled at all the companies that are running operations out of Ireland (often Cork). What is the appeal of this small (population 4.9M) European country? Turns out it’s the excellent tax rate, typically 12.5%, coupled with generous incentives for tech companies that planted a flag there.
This is all noteworthy in light of a new G7 (that’s 7 of the world’s major governments and economies) agreement that there be a global minimum corporate tax of 15%. It’s not a lot higher than what Ireland is offering but might be enough to dissuade companies seeking to avoid higher tax burdens from building major businesses outside their home countries.
Companies with profit levels higher than 10% might be asked to pay as much as a 20% tax rate. America is part of G7, and this could impact tech giants like Apple. But it’s worth noting that China is not a G7 member and doesn’t have to play by these rules.
My guess is that there will be other countries outside of G7 that will offer far better tax rates and that non-G7 members will benefit while U.S. companies might be hamstrung by the new rules. So, more money (and maybe tech jobs) back in the U.S. but possibly slightly lower profits while Chinese tech firms still get the best of both worlds.
The G7 may not have a ready answer for China, but the U.S.‘s dysfunctional Senate apparently agrees on one thing: China is a competitive threat, especially on the technology and innovation front.
They want to pour $250B into efforts to build manufacturing expertise and capability, especially in the tech space. This bill, which adds incentives for building new chip-making factories in the U.S., could have a direct impact on the current Semiconductor supply woes.
While the bill still has to make its way through the House of Representatives, all parties, including the White House, expect it to become law.
The morning after
I wonder how many people woke up on Tuesday of last week to a spotty–at best– Internet. Major sites like Buzzfeed, Reddit, FourSquare, and countless others were offline for at least an hour.
I tried Reddit and got nothing but 503 errors. Initially, I assumed my already spotty Internet had taken a tumble. I restarted Wi-Fi, checked my passwords, and then decided to try a few other Websites and noticed that it was not me that was down, but significant parts of the Web.
The culprit: Fastly, a huge cloud server operator who hosts many of these sites.
The reason: Not a hacker
The real reason: A tech issue.
My takeaway? Gosh, we have a fragile Internet. I mean, the relatively small tech issue of one company brought down huge parts of our online experience. We have so many servers and redundancies and this glitch still zapped us.
It might be time for some of these big service providers to take another look at stress points and to better test upgrades (maybe sandbox them from the live Internet).
On the bright side, Fastly resolved the issue in roughly an hour.
TikTok reprieve
That looming ban on TikTok? It’s over. The Biden Administration rescinded it and TikTok is out of the woods. Sort of.
Remember how I was just talking about China? Well, TikTok is still owned by China and as you know the U.S. is still pretty concerned about both competing with it and protecting the U.S. from China-based cybersecurity attacks. So, Biden’s team will take a long hard look at TikTok and then make some recommendations.
My bet is they ask for some adjustments and further assurances that no one in China can access your TikTok dances.
Instagram offers answers
Instagram’s married its efforts to win back influencers with a rebuff of most of the algorithm theories creators hold dear. In particular, it’s punching back on Shadow Banning, this idea that the algorithm and its handlers decide on a whim to hide your content from the Instagram audience.
Instagram insists that there isn’t one giant algo and that shadow banning just isn’t a thing. This still doesn’t explain the vagaries of the Insta algorithm(s) and why some popular creators’ audience graph looks like a topological map of the Rockies.
Facebook watch
No, not watching Facebook, but a real Facebook Smartwatch heading your way in 2022. For me, the news triggered extreme déjà vu. The last time Facebook got into mobile technology, it was peddling its own phone. That phone ended up selling for 99 cents before exiting the market.
The rumored smartwatch is a bit of a hybrid device. It could, like phones, have front and back cameras, which sounds like a terrible idea. Samsung tried the camera-on-watch (more-specifically, on-the-watchband) strategy early on and it was met with “meh” and “nope.”
It’s not that Facebook doesn’t do hardware. It has its Oculus VR headset business and the Portal video calling platform. They’re both moderate successes. This, however, is different. People have a mostly love/hate relationship with the monster social media platform. Do they really want Facebook on their wrist?
Missed on Medium:
P.S. Make time to watch this interview
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