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TikTok owner asks Chinese staff in Singapore to pay taxes to Beijing

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TikTok owner asks Chinese staff in Singapore to pay taxes to Beijing

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TikTok parent ByteDance is asking Chinese staff at its Singapore headquarters to pay tax to their home country or risk losing their ability to cash out on stock options, as Beijing steps up enforcement of its global tax scheme.

Employees at ByteDance who relocated from China to Singapore received an internal memo on Tuesday requiring them to report their income to Chinese tax authorities and pay relevant taxes to cash out on stock options that make up a significant portion of their pay, according to three people with knowledge of the matter.

Those hired locally with Chinese citizenship were encouraged to report their income but not required to do so, according to the people. More than 1,000 employees could be affected, and the tax difference could be as high as 21 percentage points depending on individual salaries, as both countries have a tiered tax structure.

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Singapore has emerged as a regional hub for many Chinese companies looking to expand into south-east Asia and globally. Tech giants Alibaba, Tencent and PDD, as well as start-ups such as Shein, have set up offices in the city-state, where lower tax rates have convinced many Chinese workers to relocate.

China in recent years has increased efforts to collect tax revenue to fill government coffers, including demanding wealthy individuals and companies double-check for unpaid liabilities, amid a broad economic slowdown.

In 2019, Beijing revised its income tax rules to allow authorities to collect revenue from Chinese expats, similar to US rules on Americans living abroad, but it has not enforced them rigorously. Most Chinese citizens working abroad only need to report their taxable income on a voluntary basis, and Beijing has not outlined consequences for those who do not.

For higher-paid workers at ByteDance, the potential difference could be massive. The highest marginal tax rate in mainland China is 45 per cent, while the top rate in Singapore and Hong Kong, cities with significant Chinese expat populations, is 24 per cent and 15 per cent, respectively.

Many ByteDance employees receive part of their remuneration in restricted stock units that are typically vested over a number of years and then purchased by the company. A recent share buyback in November valued ByteDance at $300bn.

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A person familiar with the matter said employees required to pay tax would need to show proof of payment to fully participate in the buyback, while any amount of tax owed would be held by the company in equivalent restricted stock units.

The person added that ByteDance would provide subsidies to affected employees for up to two years but did not specify if they would be enough to bridge the gap.

ByteDance did not immediately respond to a request for comment.

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Biden has become a scapegoat for the Democrats

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Biden has become a scapegoat for the Democrats

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Original Sin is an odd name for a book that turns out to cover 2023 to 2024. It implies that readers will be taken to the ultimate root of a problem — the problem being that Donald Trump is in the White House — when in fact the authors lead them along the trail of blame no more than two years back. That was when an aged Joe Biden resolved to run for president again. It was a heinous decision. The cover-up of his fragile state was worse. Peers who didn’t call on him to go until a televised debate exposed him last summer must reflect on their dereliction.

But this wasn’t the “origin” of anything. Biden has become a scapegoat for a much longer-standing Democratic problem, which is a tolerance of probable and often proven election losers.

If there was a sin, a Fall, it was the Democrats’ choice of Hillary Clinton as their presidential candidate in 2016. World history turned on that singular act of pigheadedness. Polls were telling the party that voters disliked her. She had already fluffed a huge lead over the young Barack Obama in the primaries of eight years earlier. True, her low reputation has never been fair. She isn’t a crook or much more of a hypocrite than other politicians, just one of life’s plodders. But the world is what it is. Democrats chose to ignore the objective fact of her unpopularity, and the outcome is a Trump era that was probably avoidable.

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The other event that led us to where we are today was the elevation of Kamala Harris as Biden’s running mate in 2020. Given his age, the Democrats were all but naming a future president. Again, they were spoilt for clues about her limitations. She had been the first candidate of note to withdraw from the primaries. Those who outlasted her included the mayor of Indiana’s fourth-largest city.

Biden carries nominal blame for choosing her as running mate, but “choice” is a misleading word here. There was a tacit Democratic rule that a white man couldn’t run with another white man. So no Pete Buttigieg. The Minnesota senator Amy Klobuchar was a strong performer but also caught up in the recent history and politics of the state in which George Floyd had just been killed, which all but ruled her out. Is there another party that boxes itself in like this?

All in all, Biden’s refusal to stand down in good time comes third in the list of Democratic follies over the past decade. The problem isn’t one man. The problem is a pattern of collective delusion about candidates that goes back to the previous century. Look at margins of defeat. Not since Barry Goldwater have the Republicans misjudged the fit of nominee and electorate quite as badly as the Democrats did with George McGovern, Walter Mondale and Michael Dukakis.

In the 50-50 nation of today, the Democrats are always competitive. As a result, it is easy to miss the stunning narrowness of their candidates. Tim Walz was the first person on either the upper or lower half of a Democratic presidential ticket since 1980 who hadn’t gone to law school. There has been no southerner on the top since Al Gore at the turn of the millennium, despite the mistrust that Democrats must overcome there. Last November, in a contest that it rightly described as existential for the constitution, the party put up a pair from California (which hasn’t voted Republican since the 1980s) and Minnesota (which didn’t even vote Republican in the 1980s). This is a party that is always willing to meet conservative-minded swing voters one-tenth of the way.

To be bad at choosing a leader is to be bad at politics. Whatever else seems to matter in that trade, such as ideas and tactics, it flows from the paramount individual in a party. Good leaders will tend to get these things right. The likes of Harris, or Ed Miliband or Jeremy Corbyn in the UK, reliably won’t. If this logic seems circular — “winners win” — I’m afraid that is politics. There should be more research and commentary on what constitutes “it”, otherwise known as the X-factor, than on campaigns, manifestos and other outputs of politics, the study of which is an exercise in looking through a telescope from the wrong end.

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The question is why the Democrats in particular so often err at leadership selection. Perhaps parties of the left are necessarily softer on human weakness. The impulse that leads them to protect people without lucrative skills from market forces (a good thing) is the impulse that makes them coddle electoral no-hopers (a bad thing). That would explain why Labour in the UK has so often had the same problem: for each Dukakis, a Kinnock.

Or it might be that progressives, trained to think in terms of structural forces, regard an emphasis on individual talent as unintellectual. Increasingly, a Democrat is someone who pins the rise of Trump on academic abstractions — neoliberalism, oligarchy — but shirks the humdrum work of not choosing a great clucking turkey of a candidate every four years.

Either way, this problem predates and could postdate the Biden years. Even had he quit earlier, the Democrats would in all likelihood still have chosen Harris out of deference to seniority and those unwritten identity norms. With a longer campaign, and therefore more exposure of her mystifying syntax and opaque beliefs, I think she would have done even worse against Trump than she did. Original Sin exposes senior Democrats as people of titanic self-pity. “We got so screwed by Biden as a party,” says one grandee. “We got so screwed by the party as a world,” mumbled one reader.

janan.ganesh@ft.com

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Trump’s Higher Steel Tariffs Sour Mood at Deal-Making Table

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Trump’s Higher Steel Tariffs Sour Mood at Deal-Making Table
President Donald Trump’s doubling of US tariffs on steel and aluminum imports to 50% is fanning trade tensions at a time when Washington is negotiating with several economies that also face his so-called “reciprocal” duties set to kick in July 9.
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Elon Musk derides Donald Trump’s tax bill as ‘a disgusting abomination’

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Elon Musk derides Donald Trump’s tax bill as ‘a disgusting abomination’

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Elon Musk has lambasted Donald Trump’s signature tax bill, calling it “a disgusting abomination”, in an outburst that threatens to destroy the relationship between the US president and his billionaire backer.

In a series of posts on his social media site X on Tuesday, Musk, who abruptly left the administration last week, hit out at what he called a “massive, outrageous, pork-filled Congressional spending bill”.

He added: “Shame on those who voted for it: you know you did wrong. You know it.”

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Musk’s comments came just hours after Trump had criticised Republican Senator Rand Paul, a staunch fiscal conservative, for his opposition to the proposed legislation, which the president described as a “BIG GROWTH BILL” on his social media platform.

The legislation, which Trump had coined his “big, beautiful bill”, passed the House last month by one vote and is currently being considered by the Senate. It has been criticised by fiscal hawks for adding trillions to the national debt when investors are already worried about the US’s widening deficit.

Supporters of Musk’s so-called Department of Government Efficiency (Doge) have also criticised the bill, claiming it would undo some of the initiative’s savings.

Asked about Musk’s latest comments, White House press secretary Karoline Leavitt said: “Look, the president already knows where Elon Musk stood on this bill. It doesn’t change the president’s opinion. This is one big, beautiful bill, and he’s sticking to it.”

This is a developing story

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