By The Editorial Board
Rule No. 1 for international economic affairs ought to be “Don’t give Donald Trump a legitimate excuse for a trade war.” French President Emmanuel Macron missed the memo, which explains why Paris is pushing a new digital tax that even the Germans don’t want for Europe. The digital services tax approved by the National Assembly last week imposes a 3% levy on sales by global tech companies in France. If the companies have no profits, they will still pay the tax. The theory is that 80-year-old global agreements that tax profits in a company’s home country are outdated in the digital era.
By Douglas Holtz-Eakin
The business tax reforms embedded in the Tax Cuts and Jobs Act (TCJA)remain the crown jewel of the Trump administration’s economic policy. They are part of the reason that year-over-year macroeconomic growth has ramped up from 1.3 percent in the second quarter of 2016 to over 3 percent in early 2019, that labor productivity growth has rebounded to 2.4 percent in the first quarter of 2019 and that there is reason to expect an upshift from the previous trend growth rate of 2 percent or below. That crown jewel will be at risk when Treasury Secretary Mnuchin attends this week’s G7 Finance Minister summit in France.
By The Associated Press
Finance officials from the Group of Seven rich democracies will weigh risks from new digital currencies and debate how to tax tech companies like Google and Amazon when they meet at a chateau north of Paris starting Wednesday. Those issues, raised by the impact of digitalization on the world economy, are at the top of the agenda for a two-day gathering hosted by French Finance Minister Bruno Le Maire and including U.S. Treasury Secretary Steven Mnuchin.