92.4 F
College Station
Thursday, June 17, 2021

The New G-7 Tax Proposal Is An All-Around Bad Deal For America

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Brazos Valley Hospitalizations Continue to Decline After Mask Order Rescinded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....

The Group of Seven (G7) nations, including the United States and six other wealthy countries, recently announced they had reached an agreement to impose a minimum global corporate tax rate on multinational companies and would be amending long-held international tax principles and rules. Treasury Secretary Janet Yellen hailed the announcement as a victory that would end the global “race to the bottom” on taxation. But in truth, what the G-7 proposed is a bad deal for America’s sovereignty, American businesses, and taxpayers.

The agreement has two main components. The first is to implement a new tax rule. Currently, corporations pay taxes over profits earned to nations where they have a physical presence. The G-7 agreement proposes that countries would have the right to tax 20 percent of profits above a margin of 10 percent where the company’s products or services are consumed.

For example, Company X is located in County A but sold its service to people in Country B. Company X made a profit of $15, representing a 15 percent profit margin. Under the current global tax system, Company X has to pay tax on the $15 profit to Country A only.  According to the new G-7 agreement, however, Country B will also collect 20 percent tax on the profit above a margin of 10 percent, which in this case is $5.

While clearly aiming at American tech giants, this G-7 proposal is, in fact, a global digital service tax in disguise. Out of concerns for “fairness” and “justice,” in recent years some European governments have called for imposing a special digital tax on large U.S. tech companies. Nevertheless, with rare bipartisan support, the Trump administration had pushed back on such attempts, arguing the digital tax amounts to discrimination against the American companies in question.

Surrendering to European Demands

Last July, France demanded that tech companies with revenues of more than 25 million Euros in France and 750 million Euros worldwide to pay a 3 percent digital service tax on digital income generated by French users. The Trump administration retaliated by imposing levies on French imports to the United States, but

Continue reading on thefederalist

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- 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 thefederalist