YOU probably haven’t heard of the BEPS project — but you soon will. Short for Base Erosion and Profit Shifting, the BEPS Project is the focus of a rapidly moving effort by the Group of 20 countries to create a new set of international tax principles designed to better capture tax revenue from multinational companies like Apple, Google and Starbucks.
The Obama administration signed on to the BEPS Project in the expectation that it would strengthen the American tax base and enable Washington to hold on to more corporate tax revenues. But as the project heads for its end-of-year deadline and the basic shape of the BEPS principles becomes clear, nobody in Washington is paying attention to a simple fact: The United States lost, and lost big.
As they are being developed, the BEPS rules — mainly written at the headquarters of the Organization for Economic Cooperation and Development, in Paris — will not be likely to generate more tax revenues for the United States. Instead, the BEPS rules, as written, will encourage American companies to quickly move high-paying jobs such as those of research scientists and software developers to Europe to take advantage of lower tax rates.
Continue reading at the New York Times.