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TAXING TIMES FOR BIG TECH

TAXING TIMES FOR BIG TECH

The taxman is coming for Big Tech. This week, the UK's Chancellor of the Exchequer Philip Hammond (pictured above) revealed plans to levy a 2 percent tax on the revenue generated in the country by the world’s biggest search engines, social media sites, and e-commerce companies starting in 2020.


It’s not just the UK that’s looking for ways to squeeze more tax revenue out of digital disruption. French President Emmanuel Macron is pushing a similar proposal in the EU. Malaysia, Colombia, Uruguay, Qatar, and Bahrain are among the countries that have either introduced new taxes on digital companies in recent years or are considering doing so.

And it’s not just about the money – although the UK estimates the new digital levy will raise £400 million a year once it’s up and running. Here are some of the political drivers behind the trend:

Concerns about fairness: Facebook, Amazon, Alphabet (the parent company of Google), and other big online platforms have grown rich by harvesting the personal data of billions of users, analyzing it, and using what they learn to get people to buy more stuff. These companies have reaped windfall profits but paid a paltry amount in taxes, thanks in part to clever accountants who shift ephemeral assets like software code and patents to low-tax countries. Google collected £7.6 billion of revenue from UK users last year, but it paid just £49 million in taxes there. It’s a feat that’s getting harder to pull off politically in an age of rising populism.

A new social bargain with Big Tech: This isn’t just about financial fairness. It’s about a shift in the basic social bargain that’s allowed Silicon Valley companies to operate for the past decade. Until now, these firms benefited under a simple quid pro quo with their users: We use your data to get rich, and in return, provide a free (or mostly free) service that makes your life better. Then the negative social consequences started to become clearer – stoking divisions, allowing governments to spread propaganda, and undermining confidence in democracy. Governments are now reasserting themselves through taxation and regulation over what they perceive to be growing digital threats.

“No, you go first”: Despite a growing desire among countries to raise taxes on big tech, it’s been hard to get any one country or bloc of countries to move first. In part, that’s because countries fear going it alone will just encourage these companies to move their profits elsewhere. Emmanuel Macron’s push for a European digital services tax has met resistance from smaller European countries – like Ireland – which want to attract digital firms and see low tax rates as an important part of their appeal.

The US, meanwhile, is opposed to tax reforms that target the digital companies that have created high paying American jobs and billions of dollars of shareholder value. The UK’s decision to go for it may increase the chance that other EU countries fall in line behind France’s broadly similar approach. It envisions a lower tax rate than the proposal being pushed by France, and would be dropped if countries around the world agreed to more comprehensive global reform.

The bottom line: The UK’s latest move is a big departure for governments contemplating how to deal with global tech giants. We’ll see whether it means a more expensive era for big tech.

Dating and debates, music festivals and dance classes, work and education – an increasing amount of our social interactions now take place online. With this shift to virtual venues, ensuring kindness and respect in everyday interactions and encounters is more important than ever.

The digital space has become a fundamental part of the national and international conversation, and has also, at times, become a breeding ground for bullying, trolling and hate speech. There is a clear need for more "digital good" to ensure that online encounters have a constructive impact on everyone involved. To learn more about digital good and what it means, visit Microsoft on the Issues.

As the global vaccination race heats up, the most populous country in the world is trying to do three very hard things at once.

India, grappling with the second highest confirmed COVID caseload in the world, recently embarked on what it called "the world's largest" coronavirus vaccination campaign, seeking to inoculate a sizable swath of its 1.4 billion people.

That alone would be a herculean challenge, but India is also making hundreds of millions of jabs as part of the global COVAX initiative to inoculate low-income countries. And as if those two things weren't enough, Delhi also wants to win hearts and minds by doling out millions more shots directly to other countries in its neighborhood.

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Millions of people leave their home countries each year, fleeing conflict or violence, seeking better work opportunities, or simply to be closer to family. What proportion of those people are women? In many of the countries that are home to the largest migrant populations, a majority, in fact. While many women leave home for the same reasons as men (social instability or economic opportunity) gender-based violence or persecution often play a special role in women's decisions to pick up stakes and move. Here's a look at the gender breakdown of some of the world's largest migrant populations.

El Salvador's President Nayib Bukele is an unusual politician. The 39-year old political outsider boasts of his political triumphs on TikTok, dons a suave casual uniform (backwards-facing cap; leather jacket; tieless ), and refuses to abide by Supreme Court rulings.

Bukele also enjoys one of the world's highest approval ratings, and that's what helped his New Ideas party clinch a decisive victory in legislative elections on February 28, securing a close to two-third's supermajority (75 percent of the vote had been counted at the time of this writing).

His triumph will resonate far beyond the borders of El Salvador, Central America's smallest country, home to 6.5 million people. Now that Bukele has consolidated power in a big way, here are a few key developments to keep an eye on.

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Ian Bremmer discusses the World In (a little over) 60 Seconds:

The Biden administration announced its first sanctions. How will it affect US-Russia relations?

Not very much. About as bad as they were under the Trump administration, even though Trump personally wanted to be aligned with Putin, the administration was not. This is the same approach on sanctions as we've seen from the European Union, they could go a lot harder. It's not sector level. It's not major state enterprises. It's a few Russian officials that were involved in the chemical program for Russia. And at the end of the day, the Russians are annoyed, but they're not going to hit back. That's that. Okay.

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The GZERO World Podcast with Ian Bremmer. Listen now.

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