Emmanuel Macron wants to place a “digital tax” on the United States and other countries. He’s not the only one. Many European countries are beginning to reflect the sentiment that “tech giants” should have a special digital tax placed on them. This is because companies that provide internet-based services to customers, such as Facebook or Google, are often dodging taxes by having little to no physical presence. Or if they do, it’s often in a country with a low tax rate, such as Ireland. They wish to introduce a global tax. Talks are on right now in Switzerland to come to an agreement.
The United States is greatly opposed to this. We’ve threatened insanely high tariffs on French products if Macron were to enact this tax on us. Both countries are holding off for the moment, though, to give the Organization for Economic Cooperation and Development (OECD) time to come to an agreement.
Something like this will be hard to agree upon. Countries are under immense pressure from MNCs to keep the taxes as low as possible. And there’s also the question of portions. Who will get the money? How much will they get? Will multiple countries impose different taxes upon the same MNCs?
The concept is good. Digital MNCs definitely shouldn’t be able to avoid being taxed as easily as they do. But this kind of tax will require a lot of cooperation from each country, something we just don’t have. Every country is looking out for their best interests, so nobody is willing to compromise as much as we need them to. The world, while becoming increasingly globalized among the younger generations, is only getting more divided among the older generations. We’re seeing a huge rise in nationalism, especially among leaders. And increasing nationalism leads to a huge show of pride and “my country is the best, we deserve nothing but the best and will back down for no one” mentalities.