The Short Form: What You Need to Know about the Global Tax Deal
The technical rules that were once solely the province of tax wonks in D.C. and Paris are being brought out into the public sphere.
4 min readThe technical rules that were once solely the province of tax wonks in D.C. and Paris are being brought out into the public sphere.
4 min readSimplifying international tax rules will not solve all the challenges that stand in the way of healthy cross-border investment, but eliminating unnecessary provisions would be a positive pivot relative to the trajectory of recent years. It’s high time that policymakers stopped pursuing ever more complex rules and started the hard work of simplification.
6 min readThe agreement represents a major change for tax competition, and many countries will be rethinking their tax policies for multinationals in light of it. However, with both the U.S. and EU hitting roadblocks in their respective legislative processes, it is unclear when or even if the agreement will be implemented. If implementation fails, a return to a world of distortive European digital services taxes and retaliatory American tariffs could be on the horizon.
7 min readAs the Czech EU presidency considers a plan to manage various tax-related files, it would be wise to consider principled tax policy that broadens the tax base and reduces the tax wedge on strategic investment.
4 min readOn July 1st, 2021, over 130 countries agreed to an unprecedented 15% global minimum tax. One year later, the deal appears stuck. Daniel Bunn joins Jesse to discuss what this delay means for countries and multinational corporations, and what the path ahead looks like for global tax policy and competition.
Congress should prioritize evaluation of recent international tax trends and the model rules and adjust U.S. rules in a way that supports investment and innovation and moves towards simplicity.
27 min readThe Biden administration has been supportive of the negotiations, but the changes should be reviewed in the context of recent policy changes in the U.S. and elsewhere, the general landscape of business taxation in the U.S., and potential challenges and risks arising from the global tax deal.
3 min readContrary to the Biden administration’s claims, raising taxes on cross-border investment would hurt U.S. economic growth and jobs. Research shows that FDI creates jobs in the U.S. and raises workers’ wages and productivity.
5 min readTreasury Secretary Janet Yellen offered estimates from the EU Tax Observatory as evidence that the Polish government would benefit from supporting the global tax deal. Unfortunately, evidence was, at best, out of date.
2 min readOver the course of the last year, it has become clear that Democratic lawmakers want to change U.S. international tax rules. However, as proposals have been debated in recent months, there are clear divides between U.S. proposals and the global minimum tax rules.
5 min readLate last year, over 130 countries agreed to a global minimum tax, a purported end-all and be-all to the “race to the bottom.” But this policy is complex, and countries are already struggling to implement these new rules. We talk through how this policy came to be, identify where problems are beginning to arise, and dispel some common myths about this emerging new tax system.
Double taxation impacts the ability of companies to invest valuable things like improving their supply chains, developing new products, and hiring workers, and it can be fixed if the minimum tax uses a country’s own tax rate.
8 min readOne goal for the Build Back Better Act has been to increase the amount of revenue the U.S. raises from U.S. companies at home or abroad. With the global minimum tax rules in play, it is likely that the expected gains to the U.S. Treasury from foreign profits of U.S. companies will diminish.
5 min readComplex tax policies that work well “in theory” can often have a hard time when the rubber meets the road. One instance of this is the challenge that the OECD has created for itself with the global tax deal, also fondly known as Pillar 1 and Pillar 2.
7 min readThe current prospect for the global minimum tax requires the attention of U.S. lawmakers. Otherwise, a tax benefit at home will just mean a tax increase abroad.
6 min readAs 2021 comes to a close, countries are moving toward harmonizing tax rules for multinationals, but stalled talks on the Build Back Better Act in the United States means new uncertainties for a global agreement and for taxpayers.
5 min readThe new OECD global minimum tax rules are complex, and some countries may opt to put them in place on top of preexisting rules for taxing multinational companies. However, countries should also consider ways to reform their existing rules in response to the minimum tax.
7 min readTax Foundation testimony on the diversity of tax systems within the EU, three important ways to consider reforms by Member States, and several recommendations for the EU Parliament’s Subcommittee on Tax Matters to consider.
10 min read