Taxing Big Tech in a (de)globalizing(?) world

The rapid substitution of digital for bricks-and-mortar transactions as a consequence of the COVID-19 pandemic has proved both a boon and a bane for Big Tech companies offering or supporting digitized services — and for the governments of the countries in which they do so.

On one hand, the continuity of service to citizens required to isolate at home has enabled at least a subsistence level of economic, educational, and social activity. Without these options, long lockdowns would have proved impossible and attempts to constrain the pandemic less effective (to the extent lockdowns do indeed have this effect). On the other hand, digital expansion has strengthened a small number of Big Tech firms’ market power, accelerating a long-established trend of revenue and profit shifting from local firms subject to taxation and regulation where services are delivered to global firms able to organize in jurisdictions that offer the best terms.

 
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Πηγή: aei.org