{"text":[[{"start":12.98,"text":"The US offer on reforming international corporate taxes is good news. "},{"start":17.197,"text":"The mooted compromise would not only be a victory for multilateralism and break the deadlock that has seen ad hoc digital taxes proliferate. "},{"start":24.614,"text":"It would also be a means of ensuring that companies visibly pay their fair share as the world begins to recover from the pandemic. "}],[{"start":31.900000000000002,"text":"The global system of corporation tax, as embedded in international treaties, has long needed an overhaul. "},{"start":38.067,"text":"It was created for an age when capital investment meant spending on physical assets such as factories or farms with a presence in a defined location. "},{"start":45.772000000000006,"text":"But it has struggled to cope with the rise of “intangibles” where assets can be wherever a company decides. "},{"start":51.327,"text":"This has encouraged a “race to the bottom”, with smaller countries vying to offer the lowest rate to attract multinationals. "}],[{"start":58.5,"text":"US president Joe Biden’s latest offer is based on twin pillars suggested by the Organisation for Economic Co-operation and Development, the rich country think-tank. "},{"start":67.429,"text":"The first would establish a “taxing right” for countries based on the portion of sales of “consumer-facing” companies in their territory. "},{"start":73.90899999999999,"text":"It would allow, among other things, European countries to tax more of the profits of US tech giants such as Apple or Facebook. "}],[{"start":81.88,"text":"The other pillar would create a new global minimum rate. "},{"start":85.109,"text":"Governments could demand that companies topped up their payments until they reached this agreed level. "},{"start":89.702,"text":"This would prevent a “beggar-thy-neighbour” approach that could undermine the Biden administration’s attempts to fund its social and infrastructure spending through higher domestic corporation tax — which could otherwise see big companies make further moves to tax havens. "}],[{"start":103.3,"text":"A pact between the large rich countries would allow both the Europeans and Americans to get what they want. "},{"start":108.717,"text":"It would also enable Biden, and his Treasury secretary Janet Yellen, to show that the hard edges of globalisation can be smoothed better through engagement with allies than the go-it-alone “America First” policy of his predecessor. "},{"start":120.422,"text":"Donald Trump blocked an agreement, seeing it as just an excuse for Europe to target US businesses. "},{"start":125.814,"text":"For their part, France and the UK launched new unilateral digital services taxes; India is also toughening its taxes on foreign tech companies. "}],[{"start":134.37,"text":"Europe should now embrace the US proposal and make the most of the opportunity. "},{"start":138.824,"text":"As part of the compromise, the US wishes to expand the scope of the OECD package to all large international companies. "},{"start":145.717,"text":"That could mean that Europe’s multinationals, from German car manufacturers to French luxury goods makers, pay more. "},{"start":152.184,"text":"Focusing on only the biggest companies is not perfect but it is simple and would move the world a substantial distance in the right direction. "}],[{"start":159.67000000000002,"text":"As a global minimum, the 21 per cent rate suggested by the Biden administration is too high. "},{"start":165.36200000000002,"text":"A lower level would still afford governments the effective autonomy to set higher rates if they wish, especially with the new sales-based taxing rates in place. "},{"start":173.217,"text":"Governments must not be tempted to see corporations as an endless source of politically-convenient tax revenues: ultimately, all tax raised from business is paid for either by consumers, shareholders or workers. "}],[{"start":185.33,"text":"There are, nonetheless, economic gains to be made from a new international agreement. "},{"start":190.52200000000002,"text":"Clear global rules on how corporations ought to be taxed can reduce the incentive to engage in wasteful efforts to game the system. "},{"start":197.28900000000002,"text":"While corporate taxes are inherently distortionary, businesses do need a social licence to operate; contributing to the government-provided services they depend on is part of that. "},{"start":206.49400000000003,"text":"A global minimum corporation tax must reflect a compromise on these principles too. "}],[],[{"start":212.64000000000001,"text":""}]],"url":"https://creatives.ftacademy.cn/album/001092085-1617926073.mp3"}