Inside OutCoronavirus hastening a global fight over taxes on carbon and digital services
- Governments around the world looking for new revenue sources are targeting tech giants, most of which are American, for taxes, at the risk of Trump’s wrath
- EU’s plan to tax carbon at its borders also threatens to launch a new trade war with the US
From an outsider’s point of view, both of these proposed new taxes seem eminently fair and sensible. As the awesome costs of battling and recovering from the global pandemic start to become clear, such new sources of government income must also surely be welcome. Efforts to get agreements at a global level have been ambitious but not unreasonable. But predictably and unhelpfully, the US disagrees.
The digital services tax has been simmering harder and longer, as an increasing number of European governments have railed against the largely-US technology giants that have captured such large shares of their consumer economies while successfully avoiding any significant local tax contributions.
Efforts by the Organisation for Economic Cooperation and Development to broker a multilateral deal – surely better than a mess of potentially conflicting unilateral digital tax laws – have been patient and protracted. But they have become increasingly forlorn as the patience of countries such as France, Italy, Spain and Britain have worn thin as their need for new tax revenue mount, and as the US presidential election approaches.