Spiegel: Germany Prepares for Coming Tax Battle

The United States and the United Kingdom – intent on attracting foreign investment and jobs – may “begin stretching, undermining or completely redefining the internationally established tax framework,” reports Christian Reiermann for Spiegel Online. Finance ministers of the world’s 20 largest economies meet in March, and German Finance Minister Wolfgang Schäuble wants to lead a fight against tax dodges and havens. But the US and the UK worry about trade deficits. Prime Minister Theresa May proposes slashing the UK corporate tax rate to less than 15 percent, hoping to lure EU firms. US President Donald Trump considers implementing “tax exemptions for exports while slapping levies on imports in the hopes that such measures will reduce America's chronic trade deficit.” Such tax plans, spurred by what Reiermann calls “bolstered economic egotism” could backfire. Still, Germany is preparing a number of possible retaliatory approaches. Schäuble insists he would prefer cooperation and is “hopeful that logic will prevail and the Americans will elect not to move ahead with the systemic shift.” – YaleGlobal