Pastries and persuasion: how a global tax deal came about

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Mr. Grinberg, a tax law professor at Georgetown University who worked in the Treasury Department under the Bush and Obama administrations, was initially viewed with skepticism by some progressive, who noted that in 2016 and 2017, he lamented the “unusually high corporate tax rate” during Congressional hearings and called for the rate to be reduced in favor of a consumption tax.

But in early 2020, Mr Grinberg wrote in a Essay on Foreign Affairs that European taxes on digital services could open a dangerous front in the Trump administration’s tariff wars and warned that “the decomposition of the international tax order a century is likely to accelerate” without a deal. Later that year, Mr. Grinberg alerted Mr. Biden’s campaign advisers to how their international tax proposals fit in with stalled talks on a global minimum tax. After the election, he joined Mr. Biden’s transition team.

Ms Kysar, a professor at the Fordham School of Law and an expert on tax treaties, sharply criticized the Republican tax overhaul of 2017. In 2018, she told the Senate Finance Committee that the international tax provisions of the law “fundamentally botched general corporate taxation ”. Ms Kysar had collaborated on research with David Kamin, deputy director of the White House National Economic Council, who helped recruit her to join the transition team and administration.

With the Treasury Department working remotely, Mr. Grinberg and Ms. Kysar have spent months juggling Zoom meetings with officials from finance ministries around the world and responding to calls from tax directors at America’s largest corporations, who s were worried about what the deal would mean for their tax bills.

Working from their basements in Washington and Connecticut, they regularly exchanged real-time emails during negotiations, but they had never met until they went to a meeting of finance ministers. in Venice in July. At such summits they often used a divisive-to-rule approach, with Ms Kysar joining Ms Yellen in meetings with her counterparts and Mr Grinberg negotiating separately with the Irish tax authorities.

The last few months of negotiations have focused on the United States and Ireland, but with moving parts that have moved from Peru to India, which threatened to withdraw from the agreement shortly before the ‘announcement.

Ms Yellen’s approach with Ireland was to cajole more than pressure.

“While there was once this important tax benefit for Ireland, Ireland built a very strong economy with a highly educated workforce,” Ms. Yellen said. “It is an extremely attractive base for US multinationals to choose as the EU headquarters.”


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