In the United States under Trump's leadership, the reform process for taxing multinational corporations and billionaires worldwide is encountering significant obstacles. The Trump administration recently announced that the U.S. would withdraw from a global tax agreement supported by nearly 140 countries, led by the Organization for Economic Cooperation and Development (OECD), and warned of retaliatory tariff measures against countries that impose so-called "discriminatory taxes" on American tech giants.

This agreement aims to establish a fairer international tax system, including two pillars: one is to require multinational corporations to pay taxes in the countries where they actually earn profits to prevent profit shifting to low-tax jurisdictions; the other is to set a global minimum corporate tax rate of 15%. Currently, more than 60 economies, including the UK, Canada, Brazil, the EU, Switzerland, and Japan, have adopted this minimum tax regime.

However, Trump issued a memorandum on February 21st, clearly stating: "My administration will take necessary actions, including imposing tariffs and other countermeasures, to alleviate the damage suffered by the United States." This move has once again reignited long-standing tensions between Washington and its allies over the "digital services tax."

Countries have long accused American tech giants such as Amazon, Microsoft, Alphabet (Google's parent company), and Meta (Facebook's parent company) of exploiting tax loopholes to avoid paying local taxes. France was the first to implement a digital services tax in 2019, followed by seven other countries including Italy, Spain, and India. Last year alone, France generated 780 million euros in revenue from this tax.

In the face of policy differences between Europe and the U.S., the EU recently warned that if trade negotiations with the U.S. fail, it will independently initiate unified taxation on digital services. Trump retaliated by threatening to impose up to 20% tariffs on EU goods.

The UK, which hopes to reach a free trade agreement with the U.S., also feels the pressure and is considering whether to continue implementing the current digital services tax, which generates about 800 million pounds annually. UK Business and Trade Minister Reynolds recently stated that the digital tax "is not immutable or non-negotiable."

In addition, proposals for taxing global super-rich individuals have also encountered setbacks. Brazil, as the rotating chair of the G20, proposed levying a 2% minimum tax on individuals with net assets exceeding $1 billion, estimating annual revenue of up to $250 billion. However, the Biden administration showed hesitation, and there is no possibility of promotion after Trump returned to power, given his own status as a billionaire and his longstanding advocacy for tax cuts.

According to statistics from Forbes magazine, the U.S. currently holds nearly one-third of the world's billionaires, surpassing the combined total of China, India, and Germany. Critics point out that America's stance is hindering global tax justice.

Famous French economist Thomas Piketty pointed out at a Paris symposium that "the world cannot wait any longer for a comprehensive consensus from the G20. History shows that when several influential major powers take the lead in reform, it often drives the establishment of new international rules." He called for more countries to "take decisive action immediately."

Trump's latest move has deepened the deadlock in global tax reform and once again placed the tax responsibilities of multinational giants and super-rich individuals in a "no accountability" gray area.

Original source: https://www.toutiao.com/article/7495523378179080756/

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