“G-7 nations came to a landmark corporate tax agreement over the weekend, providing momentum for ongoing OECD talks on a new global minimum rate and reviving the relevance of the G-7 ahead of a leaders summit in England later in the week.
The deal’s two pillars aim to tackle tax havens by reducing incentives for companies to ‘move’ overseas in the first place. The first pillar establishes a 15 percent minimum global corporate tax rate, while the second allows each country to collect tax on the profits made by large multinationals within that country, rather than where the company may be headquartered.
The agreement has been sold as a way to help countries raise revenues as the COVID-19 pandemic strains resources. It’s also designed to address a decades-long race to the bottom on corporate tax rates and a simultaneous increase in companies booking profits overseas. The average global corporate tax rate was about 40 percent in 1980 and now stands at about 23 percent, according to figures compiled by the Tax Foundation. As globalization has increased, so has the amount of profit made overseas: In the 1990s, roughly 5 percent of corporate profits were made by companies outside of the country they were headquartered, that proportion jumped to roughly 18 percent in the 2010s.
As Michael Hirsh wrote in Foreign Policy last Friday, Biden’s team sees the new corporate tax plan as an indirect way of advancing his stated campaign goals of reigning in corporations and evening out the playing field for labor. ‘Every country is made worse off by tax competition, especially workers. … When people say they feel the system is rigged, and when you consider why we have such extreme inequality, tax is a big part of the story,’ one Biden administration official told Hirsch.
Hailing the agreement as an ‘significant, unprecedented commitment’ in a statement on Saturday, U.S. Treasury Secretary Janet Yellen said the agreement also showcased the Biden administration’s commitment to global cooperation. ‘I believe what you are seeing is a revival of multilateralism,’ Yellen said. Along with lofty talk, the agreement also helps the United States stave off the rise of digital services taxes, which nearly half of European countries have proposed or implemented as a way to tax the (mostly American) tech giants.
Thumbs up from tech. That may be one way to explain the positive reviews from Silicon Valley. Facebook spokesman Nick Clegg said the company wants ‘the international tax reform process to succeed and recognize this could mean Facebook paying more tax.’ José Castañeda, a Google spokesman, said those at the search giant ‘strongly support the work being done to update international tax rules.’
Over the first hurdle. It’s far too early for a Biden administration victory lap, however. A meeting of G-20 finance ministers in July will test the plan’s appeal to a broader group of nations. There are also the OECD negotiations themselves: Since the organization rules by consensus, a deal could be hamstrung by objections from tax havens. Finally, there is the U.S. Congress, where at least one chamber may not even be in Democratic hands by the time the issue is up for a vote.
Setting the bar. The minimum corporate rate is still too low for some. ‘It’s absurd for the G7 to claim it is ‘overhauling’ a broken global tax system by setting up a global minimum corporate tax rate that is similar to the soft rates charged by tax havens like Ireland, Switzerland and Singapore,’ said Gabriela Bucher, the executive director of Oxfam. ‘They are setting the bar so low that companies can just step over it.’” Read more at Foreign Policy
“Sen. Joe Manchin says he plans to vote against a sweeping voting rights bill and remains opposed to gutting the filibuster. The moderate Democrat from West Virginia has for months been a key holdup to the For the People Act, which he described as ‘partisan voting legislation.’ His opposition to filibuster changes also presents a major roadblock for Biden, given that Republicans can hold up many of his legislative priorities under the current rules. Meanwhile, former President Trump continued to push disinformation around the 2020 presidential election in a speech this weekend before the North Carolina Republican Party, while praising states like Texas, Florida and Georgia that have advanced laws making it harder for Americans to vote.” Read more at CNN
“LONDON — Britain’s Prince Harry and his wife, Meghan, the Duke and Duchess of Sussex, have announced the birth of their second child, daughter Lilibet ‘Lili’ Diana.
The baby’s full name is Lilibet ‘Lili’ Diana Mountbatten-Windsor, the couple said in a statement Sunday. She was born at 11:40 a.m. Friday at Santa Barbara Cottage Hospital in California. She is eighth in line to the British throne.
The baby is named after Queen Elizabeth II, Harry’s grandmother, who was called Lilibet during her childhood, and the late Diana, Princess of Wales, Harry’s mother, who died in a car crash in Paris in 1997, while being pursued by paparazzi.” Read more at Washington Post
“Supreme Court justices on Monday will begin the sprint to conclude their work this month, with pending decisions on issues as diverse as the fate of the Affordable Care Act and compensation for college athletes.
Also on the docket: a voting-rights case that could determine how the court will decide future battles over the issue, a clash between a Catholic organization and a city’s anti-discrimination law, and whether school officials can discipline students for off-campus speech.
But perhaps the most consequential decision has no deadline and will be made by a court of one: 82-year-old Justice Stephen G. Breyer.
With Democrats taking over Washington, Breyer faces pressure to retire
The court’s senior liberal member has faced unprecedented pressure to step down from his lifetime appointment while a Democratic president is in the White House and the party still maintains its shaky majority in the Senate.” Read more at Washington Post
“The Biden administration is facing a national security crisis. Ransom-demanding hackers have targeted a pipeline, a Florida water system, schools, health care institutions, government agencies and the meat industry in recent weeks, and the nation's energy secretary warned yesterday that US adversaries are capable of shutting down the power grid. Many of the attacks appear to be the work of criminal gangs based in Russia. President Biden is set to meet with Russian President Vladimir Putin this week on his first foreign trip since taking office, and the summit is likely to be even more tense than expected.” Read more at CNN
“Let's start with the good news: Most adults in the US have received at least one dose of a coronavirus vaccine, and about 66% said in a recent survey that their lives are at least somewhat back to normal. The average national vaccination rate also got back up above a million shots a day, after falling under that threshold last week. But even as things are looking up, experts warn that vaccination lags among groups such as adolescents could delay the return to normal. Also, only 13 states have reached Biden's goal of vaccinating 70% of US adults with at least one dose by July 4 -- and those that are behind could be vulnerable to another outbreak.
“Mexican President Andrés Manuel López Obrador appears to have lost his grip on power after a poor showing in yesterday's midterm elections. Preliminary results suggest the country's ruling political coalition will no longer have a qualified majority in the lower house of Congress, making it harder to pass major legislative and constitutional reforms without the help of opposition parties. The contest was largely seen as a referendum on López Obrador, who was elected in 2018 after campaigning to tackle violence and corruption. But critics say he's failed to stop the organized crime turf wars that have plagued Mexico for decades. With fears of voter intimidation high, the balloting concluded one of the deadliest recent midterm election seasons.” Read more at CNN
“The US experienced another deadly weekend of shootings as the nation emerges from restrictions imposed during the pandemic. In Chicago, at least five people were killed and 40 others wounded during five gun violence incidents; so far, no one is in custody. Salt Lake City and Indianapolis also reported fatal shootings over the weekend, while a shooting in New Orleans yesterday morning left eight people injured. More than 8,400 people have died from gun violence in the United States this year.” Read more at CNN
“Simone Biles wins at US Gymnastics Championships, becoming first woman with seven national titles Biles, the reigning world and Olympic champion, hasn't lost an all-around competition in eight years, and she extended that streak in record fashion Sunday night.” Read more at USA Today
“While Republicans have blocked the U.S. government from producing a comprehensive accounting of the Jan. 6 insurrection, ordinary people are conducting investigations of their own. The self-styled ‘sedition hunters’ are analyzing footage on the internet to bolster the FBI’s inquiry, raising concern that untrained vigilantes might broadcast the personal information of innocent people.” Read more at Bloomberg
“There is a struggle inside the A.C.L.U. over whether to prioritize free speech or progressive principles.” Read more at New York Times
“Yuka Saso modeled her golf game after Rory McIlroy, spending hours watching videos of his swing before going to bed each night in order to perfect her own.
All that work paid off and now Saso is a US Open champion just like her idol thanks to a clutch playoff putt after a back-nine collapse by Lexi Thompson.
Saso’s 10-foot putt for birdie on the third playoff hole Sunday helped her edge out Nasa Hataoka and become the second teenager to win the US Women’s Open.
Saso overcame back-to-back double bogeys early in the round to make the playoff and then became the first player from the Philippines to win a golf major.” Read more at Boston Globe
“Lives Lived: Clarence Williams III won fame playing one of the three young undercover police officers on ‘The Mod Squad.’ He died at 81.” Read more at New York Times
“BERLIN (AP) — David Dushman, the last surviving Soviet soldier involved in the liberation of the Nazi death camp at Auschwitz, has died. He was 98.
The Jewish Community of Munich and Upper Bavaria said Sunday that Dushman had died at a Munich hospital on Saturday.” Read more at AP News
“LGBTQ support: Burger King has taken aim at Chick-fil-A with plans to donate to LGBTQ group for every chicken sandwich sold.” Read more at USA Today
“Danny Masterson, the actor best known for ‘That '70s Show’ and Netflix's ‘The Ranch,’ is expected to return to court on Monday for arraignment on rape charges. Three women have given testimonies that Masterson raped them in separate incidents between 2001 and 2003. Masterson has denied all allegations and charges against him since they first surfaced publicly in 2017. If convicted, the 45-year-old actor could face up to 45 years in prison.” Read more at USA Today
“Peru’s election. Peru’s ideologically polarized presidential election between socialist Pedro Castillo and conservative Keiko Fujimori is too close to call, according to unofficial results. A fast count by Ipsos showed Castillo ahead of Fujimori by 0.4 percent, while an earlier exit poll showed Fujimori ahead by 0.6 percent. With only 42 percent of votes counted, Fujimori leads Castillo by 52.9 percent to 47.1 percent in the official tally.” Read more at Foreign Policy
“Electoral tailwind | Chancellor Angela Merkel’s Christian Democratic Union won an election in the eastern state of Saxony-Anhalt yesterday, easilybrushing off a challenge by the far-right Alternative for Germany party. The unexpectedly strong result is a boost to Merkel’s successor as CDU leader, Armin Laschet, as he vies for the chancellery in federal elections in September.” Read more at Bloomberg
“Looking south | Mario Draghi is taking on a challenge that has eluded every Italian leader for more than a century: to make the nation cohesive from Sicily to the Alps. The scale of fixing the south’s graft, infrastructure, unemployment and red tape makes one wonder why this time may be different. But, as John Follain and Alessandra Migliaccio report, the banker-turned-prime-minister has cash, experience and a reputation for fixing things.” Read more at Bloomberg
“Jeff Bezos will be flying to space on the first crewed flight of the New Shepard, the rocket ship made by his space company, Blue Origin. The flight is scheduled for July 20th, just 15 days after he is set to resign as CEO of Amazon.
Blue Origin said Bezos' younger brother, Mark Bezos, will also join the flight.” Read more at CNN
Photo: Jim Watson/AFP via Getty Images
“Vice President Kamala Harris lands yesterday in Guatemala City as she begins a Latin American swing that's her first foreign trip as V.P.
Next, she stops in Mexico.
Senior administration officials, briefing pool reporters on the trip, said the Biden administration will announce new measures today to fight smuggling and trafficking.
“Google agreed to pay French regulators a fine of nearly $270 million, settling one of the first antitrust cases globally that allege the tech company abused its leading role in the digital advertising sector.
France’s competition authority said it had also accepted a series of proposed commitments Google made to settle the case, including promises to make it easier for competitors to use its online-ad tools. The Wall Street Journal first reported the proposed settlement last month.” Read more at Wall Street Journal
“Conservatives are starting to pressure lawmakers with financial ties to Big Tech, Axios' Kim Hart scoops in her ‘Tech Agenda’ column.
The American Principles Project, a conservative advocacy group founded by Princeton's Robert George, will send a letter today warning Republican lawmakers and staffers to be wary of Big Tech attempts to ‘influence public policy on the Right’ through think-tank funding.
Why it matters: Third-party influence is a key lobbying strategy for major companies in Washington, and has in the past been very effective for Silicon Valley.
The big picture: There's growing suspicion of Big Tech by both parties, but for different reasons.
Democrats are angry that the platforms have allowed misinformation to proliferate. Republicans are concerned that the platforms' content moderators have censored conservative views.
There's also rising suspicion of any person or group tied to the companies financially, regardless of how they lean politically.
The letter stops short of warning GOP lawmakers to halt all meetings with tech allies, but cautions to ‘carefully consider your interactions with Big-Tech funded groups.’
The other side: As we've reported, Democrats and a few left-leaning groups are also pulling away from some Big Tech donations.
What to watch: Expect Republicans to be less willing to work with Democrats on tech legislation as they focus on winning back the House in 2022.” Read more at Axios
“12.5% — The corporate tax rate in Ireland, a figure considerably lower than the 21% rate in the U.S., which has allowed the country to attract outsize foreign investment. The Group of Seven leading rich countries agreed to back new rules that move toward a global minimum tax rate of at least 15%, with the goal of discouraging companies that do most of their business in one country from basing their headquarters overseas. But the deal faces a rocky path to implementation, with many governments likely to wait and see what others will do.
280 — The distance, in yards, that Jake Adams drove a golf ball into Yellowstone National Park. Adams, a professional comedian and avid golfer, decided to hit a golf ball in every state in 30 days and post his adventures on social media. It built him a cult following—and prompted an investigation by the National Park Service.” Read more at Wall Street Journal
“The Netherlands rarely grapples with its role in the global trade of enslaved people. A major museum in Amsterdam aims to change that, with the opening of ‘Slavery,’ an exhibit about Dutch colonial history.
Slavery was forbidden in the Netherlands, but it was legal in Dutch colonies. Mostly through huge trading companies, the Dutch enslaved more than a million people. The exhibit at the Rijksmuseum, which opened on Saturday, presents this history through 10 true stories about merchants, abolitionists, enslaved people, those who bought them and others. It includes objects from the era, like Rembrandt portraits.
The Netherlands often celebrates its commercial history, and the exhibit tries to uncover a largely untold part of that past. It is ‘a small and late step in the recognition of the sorrow that was done to hundreds of thousands of people in several continents,’ Tim Fraanje writes in Dutch Vice.” Read more at New York Times
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