Lianeon Weekly Topics | A Global Tax Regime?

Week of May 31st

The Essential Three

Rishi Sunak announces ‘historic agreement’ by G7 on tax reform

The G7 group of wealthy nations have signed a landmark deal to tackle tax abuses by some of the world’s biggest multinationals and establish a minimum global corporation tax for the first time.

Finance ministers from the group agreed the plan on Saturday as part of talks held in London, the chancellor, Rishi Sunak, said.

The principle of the agreement is that multinationals would have to pay a minimum tax rate of at least 15% in each country they operate.

US president Joe Biden initially proposed a minimum rate of 21%, but was persuaded to reduce this to 15% to make it acceptable to a wider group of countries.

Critics said the G7 had let multinationals off the hook with a rate that failed to prevent tax havens undermining countries with higher tax rates, needed to pay for costs incurred during the pandemic.

This is one of those things that I will believe when I see it. Nonetheless, its a bold move and makes some sense. For decades, multinational corporations have played countries against each other as they strive to attract investment, triggering a race to the bottom in taxes. The consequence is many companies do not pay taxes at all.

While I don’t think we should seek to “punish” corporations for their profits (as seems to be the position on the “left” common sense and fair taxation should be the goal.

Republicans want to change state election laws. Here’s how they’re doing it.

Passing new election laws has been one of the top priorities for Republican state legislators in 2021 — and they are working from similar playbooks to tighten or restrict the old policies even in states with very different election systems.

The latest flashpoint in the GOP drive to change voting rules came in Texas, where Democrats temporarily blocked a sweeping new bill this week that touched many of the same voting policies that drew wide notice in Georgia earlier this year. Republicans across the country have proposed significant changes to their states' election rules after former President Donald Trump promoted conspiracy theories and spread false claims that he’d been robbed of victory there and elsewhere by massive fraud.

Together, Texas and Georgia show which areas Republicans are focused on after Trump’s 2020 loss. Texas’ mail voting policies were already very tight, but both states sought to make their absentee policies stricter. Both states specifically targeted new voting policies piloted by big, blue counties in 2020. And Republicans in both states sought to impose new limits on election officials — and expose them to new criminal penalties for wrongdoing.

The GOP controls the a lot of districting and many local legislatures, it give them a unique advantage over the Dems. Even if these measures don’t sound bad on the surface, remember that most elections are decided on extremely thin margins. Even discouraging 1% of voters could mean GOP victories.

Viral Posts, Pundits Distort Fauci Emails

Thousands of pages of redacted emails to and from Dr. Anthony Fauci are now publicly available, thanks to journalists’ Freedom of Information Act requests. Some of those messages have been distorted in viral posts, particularly about face masks, the origins of the coronavirus and the effectiveness of hydroxychloroquine.

Seeing a lot of anti-Fauci play on social media. Much of this is stemming from misinterpretation of the emails that were released. I do not appreciate many right wing media sources describing these emails as “leaked"” they weren’t. They were released through a FOIA request. I suppose legally “released” emails don’t fit the narrative of a nefarious plot to invent a pandemic like the word “leaked” does….

Healthcare/Society

Local News Coverage Is Declining — And That Could Be Bad For American Politics

The laws of supply and demand aren’t working for local news.

The local news business was devastated by COVID-19, even though consumers wanted more of its product. Visits to local news websites spiked by 89 percent from February to March 2020, but newspapers did not profit from having more readers: Ad revenues for the largest newspaper publisher in the nation, Gannett, dropped 35 percent from 2019 to 2020. Journalists were laid off, furloughed or forced to accept early retirements or pay cuts.

The pandemic, however, merely accelerated a crisis in local journalism that is now at least two decades old. From 2000 to 2018, weekday newspaper circulation fell from 55.8 million households to an estimated 28.6 million; between 2008 and 2019, newsroom employment fell by 51 percent; and since 2004, more than 1,800 local newspapers have closed across the nation

Administering a Child Benefit Through the Tax Code: Lessons for the IRS from Abroad

Many countries administer child benefits through their tax systems, including Australia, Canada and the UK. As the IRS prepares to issue the newly expanded Child Tax Credit on a monthly basis, U.S. policymakers can learn from these countries to reduce administrative complexity and promote high rates of benefit up-take. Lessons include enforcing data sharing across agencies and jurisdictions; allowing eligible households to apply year-round by relying on subsequent tax returns for benefit adjustments; and empowering trusted community organizations to do outreach, beginning in hospital delivery wards. Longer-term, the IRS's taxpayer services will need greater resources and deeper institutional reforms to better reflect the agency's growing role in social welfare policy.

Education/Science/Technology

Conservative Attacks on 'Big Tech' Are Turning the Constitution on Its Head

Throughout my life, conservatives have believed the U.S. Constitution means what its authors intended. While it can sometimes be challenging to apply the document's verbiage to modern times, conservatives know that when the founders wrote, "Congress shall make no law" they meant that, "Congress shall make no law." Easy peasy, as the saying goes.

By contrast, liberals have often championed a "living and breathing" Constitution—one that evolves with the times. They don't mean proper change via amendment, but through "enlightened" court interpretations. Like shamans, liberal justices don't obsess over the founders' intentions, but on truths found in penumbras. Go figure, but their divinations usually conform to their own biases.

In a bizarre twist, conservatives are now sounding like liberal jurists rather than traditionalists on some key constitutional questions. Let's take the First Amendment, which the founders viewed with particular significance given that they placed it, well, first in the Bill of Rights. These days, conservatives are busy reinterpreting its meaning and have been quite creative with their new interpretations and divination.

One can fully understand the argument that big tech has gotten too powerful. The GOP has described the actions of big tech as “Orwellian". It’s pretty clear that they don’t understand what this word means.

When the GOP passes legislation that forces private companies to host a certain kind of speech…that is the very definition of Orwellian.

Economy/Business

Biden pressed to send clear message on economy as warning signs flash

The Biden administration is taking pains to explain to Americans where the country is headed as the economy spits out anxiety-inducing data on prices and jobs. But it’s struggling to find a clear message.

Treasury Secretary Janet Yellen spooked markets this month when she said interest rates could rise if the economy heated up too much — then clarified a few hours later that it wasn’t a prediction. President Joe Biden held a press conference to discuss a disappointing jobs report, then circled back three days later to address the issue again, suggesting to some that he was concerned about public reaction. And the president has called for his multitrillion-dollar infrastructure package to be paid for with tax hikes, which indicates that he's worried about too much spending even as the administration downplays both inflation and deficit fears.

The inconsistent messages the administration is sending on economic policy have drawn angst from some political allies, who say it muddles the argument for their agenda.

Senate GOP rejects Biden infrastructure plan, preps new offer

Washington – Senate Republicans on Friday panned President Joe Biden’s latest infrastructure proposal and are expected to make a new offer as talks grind toward next week’s deadline for progress on a bipartisan deal.

Speaking after the release of a modest May jobs report, Biden made the case for his robust investment package to push the economy past the COVID-19 crisis and downturn, and into a new era.

“Now is the time to build on the progress we’ve made,” Biden told reporters from Rehoboth Beach, Delaware. “We need to make those investments today to continue to succeed tomorrow.”

The media is mostly failing to capture some numbers-gaming on the part of the GOP. The GOP have presented $600B and $900B infrastructure plans, but they include already-planned spending (not really new funds) in the topline number. The GOP plans are more like $250B in reality, and this is the number that should be used when comparing to Biden’s plan.

Policy/Politics

Biden faces challenge with Democrats on infrastructure package

President Biden faces hurdles toward getting consensus among Democrats on an infrastructure package, regardless of if it's bipartisan legislation or if Democrats pursue legislation on their own.

Progressives are getting frustrated with Biden’s ongoing talks with Republicans, and want the White House to start to pursue an infrastructure package that could pass without GOP support through the budget reconciliation process.

But some Democrats have raised concerns about aspects of the tax proposals Biden has floated to pay for infrastructure legislation, so reaching a deal won’t necessarily be smooth sailing even if the president isn't focused on attracting Republican support. Some Democrats have also brought up issues with Biden’s tax proposals that relate to regional interests.

Manchin to vote against bill federalizing elections, dealing major blow to Democrats

Sen. Joe Manchin, D-W.V., declared Sunday he will oppose his party’s legislation to federalize how elections are conducted, dealing a severe blow to Democratic passage in the evenly divided Senate.

The For The People Act would among other things ban voter ID requirements, mandate mail-in voting options and begin registering voters at age 16. It has faced uniform Republican opposition.

In an op-ed published in the Charleston Gazette-Mail, Manchin declared the bill as too partisan and divisive.

He also revealed he would not support eliminating the filibuster that requires 60 votes to consider most pieces of legislation in the Senate. On that point, he is joining a second Democrat, Kyrsten Sinema of Arizona.

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