92.4 F
College Station
Thursday, June 17, 2021

The G7’s Digital-Tax Plan

Local News

College Station Bans Traditional Pet Shops

At Thursday's meeting, the College Station city council passed an ordinance that prohibits the sale of non-rescue dogs and cats in pet...

College Station to Vote on ROO in Special Meeting Today

The College Station City Council meets Monday at 4 p.m. at city hall to consider a Restricted Occupancy Overlay (ROO). The ordinance would allow single-family...

College Station Plans on Borrowing Additional $62 Million Without Taxpayer Vote

The College Station City Council voted to begin the process of issuing $62 million in certificates of obligations for capital projects. The...

Brazos Valley Hospitalizations Continue to Decline After Mask Order Rescinded

Texas Governor Greg Abbott issued Executive Order GA-34 on March 2, 2021, and the order went into effect on March 10, 2021....

British Prime Minister Boris Johnson meets with Joe Biden, ahead of the G7 summit, in Cornwall, England, June 10, 2021. (Toby Melville/Reuters)

Welcome to the Capital Note, a newsletter about business, finance, and economics. On the menu today: the G-7’s agreement on digital taxes, May’s inflation numbers, the EU’s fine on Amazon, and Glenn Hubbard’s suggest for international tax authorities. To sign up for the Capital Note, follow this link.

Where does Google come from?
The big headline from this weekend’s meeting of G-7 financial ministers was an agreement to set a global minimum tax rate of 15 percent on corporations. But an equally consequential pillar of the deal pertains to the taxation of digital services.

Pillar 1, as negotiators call it, gives OECD member nations the right to tax the largest and most profitable businesses, regardless of these companies’ physical presences. If the deal goes through, multinational corporations will face a 20 percent tax on profits generated anywhere.

The digitization of the global economy has posed a conundrum for international tax authorities. Digital platforms generate revenue globally: Anyone, anywhere who uses Google search generates some amount of money for the company. While most tech firms are headquartered in the U.S., tax authorities abroad recently began laying claim to the revenues generated by these firms in their jurisdictions.

France led the way with its digital-services tax in 2019, levying a 3 percent tax on the gross revenues of digital businesses with more than $750 million in global sales. The previous administration’s U.S. Trade Representative argued that the tax unduly harmed U.S. businesses, because the large multinationals subject to the tax were virtually all American. OECD discussions on digital taxation began under the Trump administration but were paused by former Treasury secretary Steven Mnuchin during the COVID-19 pandemic.

The resolution reached by the G-7, to my mind, essentially codifies a slightly more reasonable version of the digital-services tax. Instead of taxing gross revenues, as France did, the G-7 deal will tax profits. However, it still applies only to the largest, most profitable businesses globally,

Continue reading on National Review

More articles

- Advertisement -

State News

Autopsy Report: Taxpayers to Reluctantly Continue to Fund Lobbyists

The 87th legislative session has reached its conclusion and though several bills were filed to ban the practice of taxpayer-funded lobbying, ultimately none of...

After Legislature Leaves, Abbott Announces Plan for Texas Border Wall

After hinting at an upcoming announcement last week amid the growing border crisis, Gov. Greg Abbott officially announced a plan for the state of...

Austinites Continue Fight Against Democrat-Run City Hall Over Homeless Hotels

AUSTIN — Amid a tumultuous two-year public safety disaster in Texas’ capital city, citizens continue to resist harmful decisions by their city officials—and are...

Have Texas’ Power Problems Been Fixed?

Despite Gov. Greg Abbott signing legislation in response to the February blackouts, concerns have emerged about Texas’ power grid this summer. Texas Scorecard spoke...

Gov. Abbott Asked to Ban Employer Vaccination Mandates

Despite Gov. Greg Abbott’s claim that vaccine passports are prohibited in Texas, employees at a Houston Hospital are having to fight their employers’ mandate...

Continue reading on National Review