Don't Agree to OECD's Global Tax Rules, Cut Rates at Home
International tax regulators have been busy devising ways to increase taxes on international businesses. Recently, the Organization for Economic Cooperation and Development released its long awaited proposal to curb international tax avoidance, but the United States should first worry about its own domestic corporate tax code. The OECD proposal aims to centralize global tax rules and increase effective tax rates on international firms. U.S. technology firms such as Google, Facebook, Amazon and Apple will likely be harmed the most.
International tax regulators have been busy devising ways to increase taxes on international businesses. Recently, the Organization for Economic Cooperation and Development released its long awaited proposal to curb international tax avoidance, but the United States should first worry about its own domestic corporate tax code.
The OECD proposal aims to centralize global tax rules and increase effective tax rates on international firms. U.S. technology firms such as Google, Facebook, Amazon and Apple will likely be harmed the most.
European countries (the majority of OECD members) worry that globalization and increasingly easier movement of capital and labor across borders will undermine their tax bases – termed base erosion and profit shifting – to the detriment of their ability to fund welfare programs. Yet the fear of massive base erosion and profit shifting are only partially supported by the OECD's own data.