The USA blew apart world attempts to find a basis for taxing digital companies last night. The FT had the story here. I'd scheduled this for a story when I saw this thread from Tax Justice Network CEO Alex Cobham, with whom I have worked over many years. I'll let Alex cover all the angles:
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Proof if ever it were needed that the U.S.A is the biggest rogue state of them all in my view.
Yes – there is much to criticise the OECD for and it seems to have caved in, but it should not have to be dealing with states that have been captured by hegemonic forces because they are simply pretending to be democracies – and that is today’s USA – with both main political parties in the pockets of corporate money, treating their voters like dirt.
I would love to see what threats were made – because I bet they were – it’s the American way of Government.
I agree that all such globally positioned bodies including the Breton-Woods ones should effectively turn their backs on the U.S. and isolate them. Those based in the U.S should where possible move out and into the EU or elsewhere (these should have gone when Nixon became president really).
What would follow is more aggression from the U.S. but at least the world would see exactly how the U.S Government works – it would become more obvious when it starts to threaten old allies like France and even the UK (with a different Government). We’d all start to know what the Cubans and Iranians have had to put up with.
American corporations and its rich have made the American Government turn the USA into THE pariah state in the world today and that is a tragedy for both the American people (who are no different to you and me really) and the rest of the world.
And they’ve got away with it for far too long, because its been hidden. Well, let’s stop hiding what they get up to.
I appreciate that what Alex Cobham is essentially saying is that the wrong structure (OECD) is asking the wrong question and getting the wrong answer (digital taxes). If the OECD persists down this path, a change of US president is not going to get the US back onside. There is bipartisan agreement in the Senate Finance Committee between Grassley (R) and Wyden (D) that the OECD’s proposals are all about ganging up on America, so even if Biden disagrees – and I haven’t seen him express an opinion either way yet – those two gentlemen aren’t going to help him out. If the OECD initiative does fall now, one imagines the new government in Dublin won’t shed too many tears if it takes the possibility of a global minimum corporate tax of more than 12.5% off the table.
Alex is not the OECD’s greatest fan
I think they reciprocate
I got on with them better….
But leaving that aside what this suggests is that we actually need another agency to deal with this and the OECD as the rich country club is not it
So, over to the UN whose tax committee should be running this agenda
My guess is that EU is probably the only organisation that can take this thing forward, even at a parochial (European bubble) level. That continues to leave developing nations out in the cold, but may be the least worst option at this point. I am not convinced that US will change much on these issues even once the Donald has gone.