Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. GETTING DOWN INTO THE WEEDS: One of the pretty big deals that Democrats could accomplish by passing a budget reconciliation measure is updating the U.S.'s international tax system — in the process putting it more in line with the global tax deal that President Joe Biden's administration helped strike last year with some 140 countries. With that in mind, the Hamilton Project at the Brookings Institution and the Tax Law Center at New York University are out with a new paper today that tries to break down what needs fixing in the international tax system and the various proposals to do so. Those issues include that U.S. multinationals pay a single-digit effective rate on worldwide income, that corporate revenues are at historically low levels and that American corporations remain keen on profit shifting, according to the authors, Wendy Edelberg, Chye-Ching Huang and Rose Jenkins. The authors also argue that good things will happen if the U.S. plows ahead with both pillars of that global tax deal negotiated through the Organization for Economic Cooperation. "The likely outcome is a playing field that is more level for US multinational corporations and that will lead to higher US tax revenue," they write. But of course, that's not a fully consensus view. Rohit Kumar of PwC, a former top aide to Senate Minority Leader Mitch McConnell, has a list of counters to the new paper's assertions. (He'll also be on a panel this afternoon on this topic, along with Huang; Kimberly Clausing, who just left Treasury; and Jason Furman, a former top economic aide in the Obama White House.) Those rebuttals include that the paper understates the effective tax rates paid by American multinationals, overstates the amount of profit shifting going on and that corporate revenues are on the rise right now. Kumar also noted that the U.S. already has a global minimum tax in place, one of the two pillars of the OECD agreement, even if the rate is lower than what's envisioned in that deal. In fact, no other country has something like the levy on Global Intangible Low-Taxed Income, so there would be "disadvantages if the United States proceeds unilaterally to increase the GILTI tax burden on U.S. companies before other countries have enacted foreign minimum taxes of their own." TIME FLIES ETC.: Hard to believe, but we're closing in on four years since the Supreme Court issued its ruling in South Dakota v. Wayfair — a decision that gave states more power to tax sales from out-of-state companies and rolled back roughly a half-century of precedent. More than couple years might have passed since that 5-4 decision from the justices, and every state with a sales tax has now passed a law allowing for collection on remote sales from companies without a physical location in that state. Those states also have enacted laws that force online platforms, like the marketplace on Amazon, eBay and Etsy, to collect the sales tax when it acts as the middleman between buyer and seller. And yet, businesses and lawmakers are still trying to get a full grasp on the new sales tax landscape. The Senate Finance Committee is even holding a hearing on the matter on Tuesday, with a particular focus on the Wayfair decision's impact on small businesses. (Not for nothing: Senate Finance Chair Ron Wyden is from Oregon, one of just a handful of states without a sales tax, which makes him more of a skeptic of the ruling than lots of other Democrats.) Avalara, a company that makes sales tax software, is out today with new findings after surveying hundreds of businesses about the aftermath of Wayfair after these four years. Among the interesting findings: Larger companies are far more aware of those marketplace facilitator laws than smaller outfits, and more likely to say those measures have a big impact on their business. There's some logic to that — one big reason those laws exist is to make sales tax collection easier for smaller sellers, after all. On the flip side, smaller companies have never been more likely to say they're fully compliant with all the various Wayfair-related laws and regulations, while the opposite is true for larger businesses. And there's some logic to that, too — smaller companies might believe that, but they also might not be aware of everything they're supposed to know.
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