Put the UN in Charge of International Taxation
Almost a decade of multilateral negotiations on a global tax treaty at the OECD has yielded insufficient progress. The question to be decided this week is whether the United States and the European Union will see the light and support a different approach.
NEW YORK – This week will witness either a historic achievement in creating a more equitable global economy or a terrible failure. A vote at the United Nations will decide whether the future of global decision-making on taxation will emerge from the negotiation of a genuinely inclusive framework convention, or if a group of rich countries will successfully insist on maintaining the current ineffective and exclusionary arrangements.
The importance of Wednesday’s vote reflects the urgency of addressing the unfairness and inefficiency of the current system of corporate and wealth taxation. It is also a clarion call for the world to use multilateral principles to reach multilateral solutions. Success would demonstrate that the world can forge a different and better multilateralism – truly inclusive but also able to deliver fundamental reforms.
Almost a decade of multilateral negotiations on a global tax treaty at the OECD has yielded insufficient progress. The process has generated innovative ideas and a technical foundation on which to build a global tax system, but the type of solutions that the world needs remain far off. Independent research shows that the proposed treaty’s two “pillars” would generate far less than the OECD had projected.