Wednesday, June 8, 2022
New York Times, The Global Minimum Tax Deal Is In Trouble:
What economists hailed as the most ambitious tax overhaul in a century is now mired in a toxic mix of fine print and political paralysis.
It was only last fall that more than 130 nations signed on to an agreement to eliminate the world’s tax havens and enact a global minimum tax. The agreement was designed to increase taxes substantially on many large corporations and to end an international fight over how technology companies are taxed. Its architects said it would end the global “race to the bottom” for corporate tax rates.
But legislators in both the U.S. and Europe are now struggling to pass the laws needed to make good on the promises embedded in the deal. And no tax changes are likely to pass on their own, without the more politically popular spending programs also passing.
In the U.S., the central problem is that Senate Democrats cannot agree on the spending proposals — on energy, drug prices and other issues — that would accompany the tax changes. Republicans are not opposed to all of the tax provisions, but they show little sign of voting for any bill. As a result, every Senate Democrat needs to agree to the bill in order to get it passed.