Questions Congress Should Ask About the OECD Two ‐​Pillar Plan

Adam N. MichelEarlier this week,I wrote about how the OECD has lost its way by advocating for higher and more complicated taxes and leaving behind its historical mission of global free-market economic development. The Biden Administration has also used the OECD to circumvent Congress ’ role in developing tax rules and signed the United States on to the OECD’s Two-Pillar plan to increase taxes on large multinational companies.As theEuropean Union and other countries begin to adopt the OECD rules, Congress will face continued pressure to follow their lead. However, Congress should resist these pressures and work to keep domestic taxes low, rather than sign on to an international effort to reverse the economic gains from the last several decades of tax competition.In addition to exercising its power of the purse by withholding funding for the OECD, Congress should reinsert itself into the international tax debate by asking Treasury and the Congressional Budget Office detailed questions about how the OECD plans will affect U.S. taxpayers and American sovereignty.The Two-Pillar ApproachIn October 2020, the OECD released an outline for a " Two-Pillar " approach to changing the international tax system —nearly 140 countries have signed on, including the Biden administration. The proposals are intended to more comprehensively tax the profits of multinational businesses by raising effective tax rates and reallocating taxing rights away from some countries and toward others. Pill...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs