Lunch Links: European Commission Slammed by Congress Over Apple/Ireland Tax Decision; Goodlatte Online Sales Tax Draws More Support; Paying By the Mile Rather Than the Gallon

August 31, 2016

Today is August 31, the birthday of Caligula in the year 12. Roman emperor from 37 to 41, his non-tax excesses are well-covered elsewhere, but when he first came to power he abolished some unpopular taxes and helped those the tax system had harmed. Then when the government ran out of money, he reversed course and levied taxes so punitive that they’ve been compared to extortion. He also imposed taxes on lawsuits, marriage, and prostitution.

Here are some interesting links I came across:

Ongoing Reaction to European Apple/Ireland Decision: House Speaker Paul Ryan (R): “This decision is awful. Slamming a company with a giant tax bill — years after the fact — sends exactly the wrong message to job creators on both sides of the Atlantic.” Senator Carl Levin (D): “The royalties Apple collects for its overseas sales of products designed and developed in the U.S. should be taxed in the U.S. But Apple has avoided the billions of dollars of taxes it owes the U.S. by transferring its intellectual property to itself in Ireland.” Senator Chuck Schumer (D): “The European Union is going to grab this money, instead of the U.S. It’s a big signpost here for us. Let’s get moving.” House Ways and Means Chairman Kevin Brady (R): “The European Commission’s decision is a predatory and naked tax grab…. This is occurring because our uncompetitive tax code strands American profits overseas instead of allowing businesses to bring those profits home to reinvest in our jobs, research, and growth.” (The New York Times / Committee on Ways and Means)

Growing International Tax Uncertainty: My colleague Scott Greenberg: “The European Commission threatens to undermine the relative predictability of the international tax system. For instance, as the U.S. Treasury notes, the European Commission has adopted a different set of transfer pricing standards than those typically used by developed nations. The more sets of tax rules that businesses have to consider when making investment decisions, the less certain they will be about the total taxes they owe.” (Tax Foundation)

The International Tax Trilemma: This piece from The Economist earlier this year suggests that policymakers can only pick two of the following three: simple tax system, independent national tax policies, the existence of multinational companies and investors. The first two lead to competition driving down rates, the first and the second is what the EU wants, the last two are what we have. (The Economist)

More Discussion on Goodlatte Online Sales Tax Draft: Amazon and Overstock say they support the proposal, with Amazon noting it supports most ideas that would achieve a national solution to the issue and preempt varying state efforts. The National Conference of State Legislatures (NCSL), representing state governments, says a plan should achieve tax parity at the point of purchase. Sen. Ron Wyden (D-OR) says Goodlatte’s plan would impose a sales tax scheme on Oregonians and he opposes it. (State Tax Notes)

States to Test Vehicle Miles Traveled Program: Delaware, Connecticut, New Hampshire, and Pennsylvania received $1.49 million in federal grants to test how drivers could pay by the mile rather than by the gallon. (State Tax Notes)

Can A Sugar Tax Stop Obesity? CNN explores. (CNN)

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