The ESADEgeo Daily Digest, 21/09/2017

The New York Times—J. Kanter / Europe renews offensive on Silicon Valley with tax reforms

  • Officials in Brussels are considering a raft of proposals aimed at increasing the amount of tax paid by digital titans like Facebook and Amazon.
  • The new proposals broadly aim to tax internet companies in the countries where they generate their business, rather than allow them to shift profits to jurisdictions with lower rates.
  • The Commission aims to tax companies based on their revenue rather than their profits, allow national authorities to tax payments made by consumers to digital businesses, and allow individual countries to tax revenue generated from advertising by internet companies.
  • While several major countries like France have pushed for a crackdown, others do not want to change a system in which some of them can attract corporations with tax incentives. A reform requires unanimity among EU member states.

Brookings—T. Chhabra / Why Trump’s “strong sovereignty” is more familiar than you think

  • The fundamental struggle between state sovereignty and universal ideals has persisted throughout the U.N.’s seven decades. Recent U.S. presidents have used UNGA’s global pulpit to favor universal values, perhaps with the exception of Richard Nixon.
  • At his UN address, President Trump certainly tilted Nixonian, but his emphasis on “strong sovereignty” did not break with this tradition. He didn’t present anything similar to President Bush’s “freedom agenda.” But it also wasn’t the standard Russian, Chinese, and “non-aligned” sovereigntist discourse.
  • To be sure, there were plenty of contradictions in Trump’s speech. “A great reawakening of nations, for the revival of their spirits, their pride, their people, and their patriotism” has, historically, not been a recipe for “harmony and friendship, not conflict and strife.”
  • When the teleprompter goes dark, Trump seems to be an unreconstructed sovereigntist. He has been highly selective in his condemnation of rights-abusing regimes, and even celebrated some of the worst offenders.

Politico—M. Karnitschnig / Why labor loves robots

  • In Germany, the fear that robots will supplant the legions of workers now making Volkswagens and other industrial wares has subsided. The only way to shape the inevitable change, union leaders have decided, is to embrace it.
  • To survive — and to protect the country’s workers — unions will not just have to adjust to the new species of digital worker; they will have to do more to ensure their members stay employed.
  • Union officials say Germany’s tradition of “social partnership,” which creates a framework for worker and employer representatives to resolve problems, is the only way to address the challenges of the digital era.
  • From an economic perspective, Germany could end up much better off if it manages to make the digital transition. Technological advances are typically the fastest way to improve productivity, which the German economy has not managed to do consistently in recent years.

Foreign Affairs—C. Michel / The United States’ problem with financial secrecy

  • Over the past decade, a handful of states in the U.S. –primarily Delaware, Nevada and Wyoming—have undermined the federal government’s efforts to combat crime and grand corruption. These states have made it easy for criminals to use U.S.-based shell companies to protect their loot.
  • The U.S. is becoming a global offshore haven. The country is now one of the most important destinations for offshore ownership vehicles, enabling tax evasion, corruption, and crime.
  • In 2015, it was estimated that some $800 billion in offshore wealth was held in the United States. That number trails that of Switzerland, which is home to trillions of dollars in offshore wealth.
  • The main issue is that the U.S. does not force registering companies to identify their so-called beneficial owners, or those who will ultimately benefit from the company’s business or holdings.
  • Recent pro-transparency measures in the world’s traditional offshore havens, such as the Cayman Islands and United Kingdom, will soon send those seeking to hide their money in search of new homes. It will be far too easy for them to relocate to the U.S.
  • If the problem is not addressed, those states will be inadvertently furthering the aims of the autocrats and criminal groups that undermine U.S. foreign policy.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo.

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