SERIOUSLY, HOW MUCH? American policymakers from both parties and Silicon Valley have been agitating against digital services taxes for years now, because they’ve argued that U.S. tech companies would bear the brunt of the burden. In the case of Canada, data out there suggests that American corporations would pay a large share of that tax. But perhaps not most of it: Daniel Bunn, the chief executive of the right-leaning Tax Foundation, estimated that maybe a third of the revenue would come from U.S. tech outfits, by extrapolating from various trade data. “In addition to that, there would be taxes on services provided within Canada by affiliates of U.S. companies and thus not included in exports,” Bunn added in an email. “In combination, a large portion of the revenue would likely come from U.S. companies and their Canadian affiliates.” Also keep in mind: Should Pillar One fail to launch, far more countries than Canada likely will be implementing digital taxes that would affect American companies. (Not only that: Each country’s tax would probably have its own quirks , and business advocates say it will be difficult for companies to comply with various differing statutes.) And to the point about revenue, the Brookings Institution found that only about 1.6 percent of America’s exports of digital services went to Canada back in 2020 — so you can see how the tax bills would continue to add up if and when other countries piled on. ONE MOORE CHECK-IN: Speaking of big looming questions for big corporations — how much could companies gain if the Supreme Court strikes down the mandatory repatriation tax on offshore income that Republicans put in their 2017 tax law? It’s not clear how it would work if the conservative court does invalidate the repatriation tax, via the case Moore v. United States. Would companies get refunds if they’ve already paid the tax? With interest? What is more apparent is that a small number of companies would reap most of the benefits if there is a round of repatriation tax refunds, as the progressive Institute on Taxation and Economic Policy noted last month. Now, the group Accountable.US, which says it seeks to unmask the power of special interests in D.C., is pointing out that some of those companies have ties to the Competitive Enterprise Institute, the conservative group that has helped spearhead the challenge to the repatriation tax. Google, for instance, has backed CEI, something for which it’s previously come under criticism for, given the group’s stance on climate change. Google also, according to ITEP, has paid approaching $10 billion in the transition tax, or fifth-most among American companies, meaning it could be up for serious refunds depending on how the Supreme Court case plays out. The tobacco giants Philip Morris and Altria, which have paid around $1.7 billion and about $427 million in the repatriation tax, also are CEI supporters, as have been Amazon, AT&T and Verizon. The Accountable.US group tried to link those ties to the relationships and friendships that justices like Clarence Thomas have had with the very rich. “The last thing these justices should be ruling on is a case to shield billionaires and special interests from paying their fair share in taxes — brought to the court by an extremist group tied up with those same billionaires and special interests,” said Caroline Ciccone, the president of Accountable.US, who has worked in the two most recent Democratic presidential administrations. HEY, IT’S ALMOST VOTING TIME: This isn’t exactly the busiest Election Day you’ll ever find. But Richard Auxier of the Urban-Brookings Tax Policy Center laid out some potentially interesting tax-related initiatives that will be on the ballot this year. Nothing earth-shattering, mind you, but those include property tax measures in both Colorado and Texas, a cannabis question in Ohio and another proposition in Texas that would amend the state’s constitution to ban a wealth tax. Auxier noted in a follow-up email to Weekly Tax that the questions that make it on state ballots can mirror the national tax debate, as illustrated by that wealth tax measure in Texas — in part because national groups on both the right and the left can be pushing those propositions. But Auxier added that, historically, the results in those ballot measures don’t always line up with a state’s partisan lean. For instance, California rejected a tax increase on the rich just last year, while Arkansas and South Dakota both voted down propositions that would have made it harder to hike taxes. “The actual vote is squarely in the idiosyncratic world of a state’s politics,” Auxier wrote.
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