Peter Barnes Weighs in on Digital Taxes and Global Tax Agreements in Bloomberg
Treasury Secretary Janet Yellen will have to manage two separate sets of delicate negotiations this fall around a global corporate-tax accord, each with clashing deadlines that could threaten the ultimate success of the deal.
Group of 20 nations plan to finalize the details of a landmark global minimum tax and a rewrite of international tax rules at a summit in late October. That’s also right when congressional Democrats hope to be nearing passage of a $3.5 trillion bill that’s the party’s one shot to make much of President Joe Biden’s economic agenda a reality. Any change in the parameters in one negotiation risks jeopardizing the other deal.
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Yet Pillar One might even be tough for some Democrats to swallow, according to Peter Barnes, an international tax attorney at Caplin & Drysdale. That’s because it’s a revenue loser -- unlike the global minimum tax, which should help preserve the U.S. corporate tax base. The administration may try to sell them together, but that could be difficult.
“When you’re measuring specific, measurable tax revenue losses against possible gains and a complete sacrifice of U.S. sovereignty, I have trouble seeing a path to success,” Barnes said.
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