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Tuesday, June 13, 2023
Herzfeld: How Congress Thinks About Worldwide Tax Reforms
Mindy Herzfeld (Florida), How you can Suppose About How the U.S. Congress Thinks About Worldwide Tax Reforms, 5 British Tax Rev. 504 (2022):
The U.S. Treasury has negotiated a multilateral tax deal below the framework of the OECD that features Pillar 1, a plan to reallocate international income of multinationals to market jurisdictions, and Pillar 2, a proposal for a worldwide minimal tax. International adoption of Pillar 1 straight hinges on U.S. legislative motion, and huge take-up of Pillar 2 may rely on U.S. modification of present legal guidelines to adapt to the OECD settlement. However whereas widespread. implementation of the OECD settlement is dependent upon U.S. legislative motion, uncertainty stays as as to whether a deal negotiated by the Biden administration shall be accepted and acted upon by the U.S. Congress. Within the quick time period, at the very least, any such motion is unlikely. This text takes an historic have a look at the circumstances which have led to vital reforms of U.S. worldwide tax legal guidelines prior to now as a lens via which to view the chance of a Congress performing on the OECD settlement.
Traditionally, main worldwide tax adjustments have been motivated primarily by home financial and overseas coverage. However the reforms being proposed right this moment don’t seem—to members of both occasion—to resolve probably the most urgent considerations of members. The justifications superior by the Biden administration officers for the reforms embedded within the OECD settlement bear however a tenuous relationship each to the native political considerations that encourage particular person members of Congress to behave, and to the bigger concerns of worldwide competitiveness and overseas coverage which have inspired Congressional motion prior to now.
https://taxprof.typepad.com/taxprof_blog/2023/06/herzfeld-how-congress-thinks-about-international-tax-reform.html
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