Skip to main content

While the trade war between China and the United States has hogged headlines and driven market anxieties over the past year, an equally large threat to the global economy has gotten little attention: a looming tax war. Since the early twentieth century, countries have largely agreed on how to tax income earned by multinational corporations that conduct business across borders. But this long-standing regime is coming apart, imperiling the broader international economic order.

The current system, established through decades of practice and convention, provides a basis for determining which country can tax income earned in one jurisdiction by a business that resides in another. The regime rests on the norms set in domestic tax laws as well as a patchwork of almost 4,000 bilateral treaties. For decades, the system was stable and functional enough that no one other than international tax lawyers even talked about it.

The digital age, however, has

To read the full article

Most Read Articles

Xi Jinping Is Not Stalin

How a Lazy Historical Analogy Derailed Washington’s China Strategy

Michael McFaul

Present at the Disruption

How Trump Unmade U.S. Foreign Policy

Richard Haass

The World Trump Made

What’s Inside

Nile Be Dammed

Toxic Water Politics Threaten Democracy and Regional Stability

Michael Woldemariam