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Taxing the digital economy
An ongoing international effort to rewrite the global tax rules for the digital economy would be a dramatic shift with potentially damaging consequences. Fear of countries unilaterally levying their own digital taxes has led to an alternative at the OECD, motivated by both fiscal and political factors. The new proposal would abandon the tax’s connection to business location and would work toward an international minimum tax on corporate profits. If the plan overcomes stiff political challenges and succeeds, consumers and workers may pay the price. If not, the global tax environment will continue to be chaotic, but tax rates will likely remain low and promote investment and growth.