Ah, I knew there was a catch. As it is not on your website I guess it is not out yet?
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Well, the proposal involves an allocation of the overall profits and does not involve a change to actual wages paid. You say the incidence of the allocation would be 100% on labor. That’s a good topic for further study, but I think we need an economist for it.
No my point is most companies domestic & international, exporting & selling locally would by this definition be using 'compelled labour', so by the logic should adjust profits for tax of all firms by e.g. 50c per labour hour.
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Plus the international (not tax related) politics of this. Developing countries have resisted social clauses in trade agreements. Guatemala successfully challenged the US on that case: https://www.ictsd.org/bridges-news/bridges/news/trade-dispute-panel-issues-ruling-in-us-guatemala-labour-law-case … - so why would they define majority of workforce as 'compelled'?
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I get that it reads to you as a policy proposal and you’re skeptical. But the question driving this analysis is not policy or politics. It is whether value creation is a useful legal principle for allocating MNC profits and if so, how the principle may be interpreted.
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Sure, I agree. What’s hard is finding a machanism to adjust prices outside of transfer pricing. Not impossible, just harder. This paper uses transfer pricing as one path.
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