As the new administration indicates intent to push back on foreign taxes discriminating against U.S. businesses, a new study from the Computer & Communications Industry Association Research Center finds that global adoption of digital services taxes by foreign jurisdictions could cost U.S. businesses $23 billion and threaten up to 31,000 jobs, reducing U.S. federal tax receipts by up to $5 billion.
For context, that's enough tax revenue to pay the average annual salary of nearly 50,000 federal civilian employees--more than work domestically at the U.S. Departments of Commerce, State, Labor, Energy, Housing and Urban Development, or Education.
In recent years, over a dozen countries have imposed digital services taxes targeting U.S. companies and dozens more are considering such taxes. Such policies discriminate against U.S. firms and place them at a disadvantage relative to foreign competitors. In order to estimate the risk of policy contagion, this study analyzes a scenario in which digital service taxes become the global norm among foreign jurisdictions.
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