So, Donald J Trump has won the US elections. Here’s what we’d have liked to have been able to write today: “The United States will have its first woman president – instead of the first president for years who refused to publish his tax returns; whose business affairs consistently demonstrate an affinity for tax manipulation and financial opacity; whose tax policy proposals imply a deepening of income inequality, and an acceleration of the race to the bottom in the taxation of multinational companies.” But instead we’re preparing to track the implications of Donald Trump’s election victory over the coming weeks and months in the various fields of importance to the global tax justice agenda.
Update: here’s our research director Alex Cobham’s interview with Share Radio which goes through the key points.
On this quiet August day, the US Treasury has fired the first shots of a tax war with Europe. And while it’s wrapped up in a claim to defend international tax cooperation, it looks more like an attempt to prevent an effective measure against international tax-dodging – carried out, not least, by US companies. At the same time, the US continues as the leading hold-out against the automatic exchange of individuals’ financial information; and to resist the growing tide of public registers of the beneficial ownership of companies. The stage is set for a prolonged battle.
By publishing a white paper titled ‘THE EUROPEAN COMMISSION’S RECENT STATE AID INVESTIGATIONS OF TRANSFER PRICING RULINGS’ (h/t @RichardRubinDC), the US has signalled an end to a period of quiet tension. This long post considers why this matters; then sets out the main contents of the white paper; before concluding with an assessment of what is possible in the ensuing hostilities.
We explore the white paper’s main points below, but note first its significance. For one thing, it confirms just how bad relationships between the US and the Commission have become on the subject of corporate tax. The white paper is the opposite of gentle diplomacy – and quite close, in parts, to an outright threat.