The EU Digital Tax Is Back and as Wrong as Ever

The idea of a European "digital tax" on tech revenues just won't go away. Next week, the European Commission will formally propose the levy, and though it faces stiff opposition from low-tax countries such as Ireland and Luxembourg, the proposal isn't necessarily doomed.

Last fall, the European Union's largest continental economies -- Germany, France, Spain and Italy -- came out in favor of the turnover levy they dubbed an "equalization tax." According to EU data, the effective corporate tax burden for a traditional company is 23 percent, but digital ones are just 10 percent. Aggressive cross-border tax planning can further drive that figure down to zero, especially when firms pick business-friendly jurisdictions like Ireland for their European headquarters. If Google, Facebook, Apple and other multinational tech platforms can't be forced to pay corporate taxes everywhere they operate, it doesn't mean they should be able to get away with paying nothing, the nations reasoned.