As talks continue in search of a unified approach to taxing the digital economy, the House and Senate tax-writing committees are concerned about the impact any global tax plan would have on U.S. tax revenue.
The Organization for Economic Cooperation and Development (OECD) is seeking consensus from more than 130 countries on a plan for a global minimum tax focused on allocating more tax revenue from big tech companies and other multinationals to countries where those corporations have a large market presence. OECD estimates that a global tax overhaul could raise $100 billion a year.
Congress has not formally weighed in on the plan, but the Treasury Department and President Trump have both expressed reservations. Because most of the multinational companies that would be impacted are based in the U.S., the Trump administration has said the tax unfairly targets American companies like Apple, Amazon, Facebook and Google. Treasury Secretary Steven Mnuchin has requested changes in the OECD framework that would allow a safe harbor for U.S. companies.
Digital tax feuds between American officials and counterparts in France and the U.K. have exacerbated the threat of trade wars between traditional allies, although both France and the U.K. have recently agreed to suspend collection of digital taxes this year.