Thursday, December 5, 2019

Treasury Secretary Raises Concerns Over Global Tax Talks: The Shadow of Zuckerberg?

Treasury SecretarySteve Mnuchin
Treasury Secretary Steve Mnuchin is probably doing this because he is getting elitist Silicon Valley pressure, but it is good to see he is at least against some types of taxes.

The U.S. has “serious concerns” with proposals being discussed in the global rewrite of corporate tax rules, Mnuchin said, as he introduced a new idea that could complicate a deal over adapting the tax system for the digital economy, reports The Wall Street Journal.

Read the word "complicate" above to mean stall, delay, completely do-over.

In a letter to the Organization for Economic Cooperation and Development,  Mnuchin  said, according to the Journal, that changing the mandatory rules for when countries have the right to tax companies could affect “longstanding pillars of the international tax system upon which U.S. taxpayers rely.”

The Journal adds:
 Mr. Mnuchin’s reservations come as a surprise given that the broad outlines of new rules agreed to in October were based on ideas advanced by the U.S., which has long pushed for measures that cover all companies, not just those whose businesses are highly digital.
The October outlines were welcomed by finance ministers from the Group of 20 leading economies at a meeting in Washington. The U.S. has been at the table throughout the process. Mr. Mnuchin’s letter doesn’t pull the U.S. out, but does raise a red flag about an approach under discussion for months...
Mr. Mnuchin noted in the letter that any new agreement will likely need enough support to get through Congress, either as legislation or amendments to tax treaties....
He suggested the new idea that the rules for determining which countries get taxing rights should be part of an optional “safe-harbor regime” as opposed to being mandatory. He said that approach could address business concerns.
The letter provided no details about what such a regime might look like, but making such rules optional for companies could complicate the already-delicate talks, which hadn’t presumed any sort of choice for businesses.
One possibility is that companies facing digital-services taxes could opt into the new system being drafted by the OECD as a way to avoid those levies. And companies outside the tech sector that expressed concern to the Trump administration of late could opt out of the new rules and continue operating under today’s rules.
A tax "safe-harbor" sounds good to me.

But, seriously, this sounds pretty crony to me, someone with real clout is putting pressure on the administration.

Hey, didn't Mark Zuckerberg and Peter Thiel recently have a secret White House dinner with President Trump?


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