The prospect of the largest overhaul to the global tax system in a century took a step forward this week as top Democrats introduced a plan to rewrite tax rules for multinational companies in a way that would allow the United States to join the rest of the world in an effort to crack down on tax havens, the New York Times reported. Finance ministers from around the world have been working for months to complete a plan to end what they describe as a race to the bottom on corporate taxation before an October deadline. More than 130 countries have agreed to adopt a global minimum tax of at least 15 percent and are discussing a change in how taxing rights are allocated so that large businesses, including technology giants like Amazon and Facebook, pay taxes in countries where their goods or services are sold, even if they have no physical presence there. House Democrats, as part of their plan to raise as much as $2.9 trillion to finance President Biden’s social safety net package, proposed raising the tax rate on companies’ overseas earnings to 16.6 percent from 10.5 percent and calculating the tax on a country-by-country basis. The plan would meet the primary commitments of the global agreement that is being negotiated through the Organization for Economic Cooperation and Development.
