Curated by Daniel Xu
Late last month, Alphabet Inc.'s Google brokered a deal with the Canadian Radio-Television and Telecommunications Commission to pay CA$100 million (about $74 million) annually to be exempted from the Online News Act—often called a “link tax.”
But it isn’t a tax at all; it’s a requirement that search engines and social media platforms that return news results bargain with news outlets for the privilege. Unlike most traditional taxes, the payments will directly target support for news businesses.
The link tax is more like a regulated negotiation process akin to intellectual property licensing. If Canada, California, Germany, or any other jurisdiction wants to tax big tech companies and subsidize news outlets, they should simply do so.
It’s possible to shape the tax code to bolster the fourth estate. A removed Build Back Better plan provision would have provided employment tax credits to local news outlets. Republican lawmakers opposed the proposal, insinuating it would equate to allowing transactional political coverage.
The Canadian link tax exemplifies global reluctance to use the tax system to fund journalism instead of ad-hoc arrangements.
The latter approach isn’t a complete solution because it gives big tech companies too much power. Meta Platforms Inc.'s decision to exclude Canadian news from its platforms, for example, demonstrates that companies can dictate terms and potentially exploit the value of news without fair compensation. The situation underscores the need to leverage the real tax code to ensure big tech pays its fair share.
At Bloomberg Tax, we keep our eyes on all taxes and quasi-taxes. From discussions of corporate rates to debates over how technology giants should contribute to the media landscape they once relied on, we remain committed to insightful analysis and reporting.
The Exchange—It’s where great ideas intersect.
—Andrew Leahey
Look for Leahey’s column on Bloomberg Tax, and follow him on Mastodon at @andrew@esq.social
Federal Insights
The Supreme Court’s eventual ruling in Moore v. United States could be the most important tax decision in a century—if the justices don’t punt the ball, says Case Western University’s Erik Jensen.
PwC’s Barry Murphy and Cameron Stonestreet explain how companies can find hidden carbon costs in their operations and their supply chain to help reduce emissions as well as their carbon tax bill.
A US Tax Court decision highlights that taxpayers themselves must review returns for accuracy, as reliance on tax professionals’ advice doesn’t preclude penalties due to negligence or disregard, say Marcum’s Kristina Lebron Vega and Ashlie Forum.
DLA Piper’s Diana Erbsen, Victoria Gu, and Joshua Lingerfelt say Supreme Court justices’ deep questions into technical parts of the tax code suggest a reluctance for a sweeping ruling in a case involving corporate income tax for shareholders.
Katten’s Mitchel Pahl assesses the impact on public companies of the SEC’s newly effective requirement for policies that comply with listing standards in recovery of erroneously awarded incentive-based compensation.
A plan to give partners at Ernst & Young greater say on major decisions will add more layers of complexity to firm governance and make it less likely that leadership changes will occur quickly, says Hofstra University’s Jack Castonguay.
AEI’s Kyle Pomerleau says that based on his data analysis, while individual income tax cuts since the late 1990s have reduced US revenue, turning back the clock on tax provisions is the wrong way to improve the federal government’s finances.
Global Insights
BDO’s Paul Falvey takes stock of key proposals in the recent Autumn Statement, one of two financial announcements given each financial year in the UK, and assesses whether they will have a significant impact for businesses.
Columnist Corner
The IRS’s delay in reducing the Form 1099-K reporting threshold doesn’t address the issue of taxpayer confusion, says Andrew Leahey in his Technically Speaking column. To improve tax literacy among the public, Leahey argues that the IRS should produce more engaging educational resources and provide schools with age-appropriate curricula on tax revenue and compliance.
Career Moves
PwC said that its global advisory leader Mohamed Kande would become the audit and advisory network’s new chair after being approved by its member firms in 151 countries.
Michelle Porter has been named co-managing director at Goulston & Storrs, effective April 1.
Jennifer Morgan has rejoined Winston & Strawn as a partner in the transactions department and member of the tax practice in Los Angeles.
Noel A. Fleming and Kayci D. Petenko have joined Archer & Greiner as partners with the Philadelphia office.
David Gillespie has joined Greenberg Traurig as a shareholder with the energy and natural resources practice in New York.
Michael J. Burwick has joined Becker & Poliakoff as a shareholder in the corporate practice in New York.
Al-Nawaz Nanji has joined McCarthy Tétrault as a partner in the national tax group in Toronto.
Colin Bolger has joined William Fry as a partner in the tax department.
Amy Liu has joined Colin Biggers & Paisley as a special counsel with the corporate and commercial team in Sydney.
David Harwood has joined FORVIS as an audit partner in the Dallas market.
Jason J. Port has joined McLane Middleton as of counsel with the trusts and estates group.
If you’re changing jobs or being promoted, email your submission to TaxMoves@bloombergindustry.com for consideration.
News Roundup
It’s been another busy week in tax news from state capitals to Washington. Here are some stories you might have missed from our Bloomberg Tax news team (login required).
- Argentina implemented a new advance income tax rate of 15% for oil and gas companies.
- Green energy developers and facilities filed more than 46,000 applications for tax credits through the Inflation Reduction Act’s Low-Income Communities Bonus Credit Program, according to a release by the Treasury Department, IRS, and Department of Energy.
- Sen. Elizabeth Warren (D-Mass.) alleged last week that KPMG LLP engaged in an “egregious” plan to help Microsoft Corp. shield almost $29 billion in taxes—a charge that raises disagreements in the tax community.
- The recreational marijuana legalization program that Ohio voters approved Nov. 7 is undergoing changes in the state Legislature, with amendments including a higher sales tax rate and a lower allowed number of home-grown plants.
Tax Journals
(Bloomberg Tax login required)
Tax Management International Journal
Harold McClure contrasts the OECD’s Pillar One Amount B approach with economic models based on distribution affiliates’ functions and assets and discusses the tax authorities’ approaches regarding Microsoft Corp.’s affiliates and litigation.
Tax Management Memorandum
Spencer Heywood of FORVIS comments on several prominent temporary provisions of the 2017 Tax Cuts and Jobs Act that are scheduled to expire on Dec. 31, 2025.
Student Writing Competition
The winner of the Bloomberg Law and Bloomberg Tax student writing competition, Clarisa Russenberger, explains how limited data in automated decision-making systems that are used by refugee resettlement agencies can lead to biased results.
Our Wish List
For December, we’re looking ahead to 2024. What should tax professionals do now to prepare for next tax season, and what will they be talking about in the regulatory space? We’re looking for a thoughtful take that will get tax professionals talking about next year—even before the calendar flips over.
If you have an interesting, never-published article for publication, contact the Insights team at TaxInsights@bloombergindustry.com.
Our Team
We talk about tax a lot. But you would hear much more if you popped into one of our Teams meetings. Here’s a quick look at what some of us are watching, reading, and listening to this week.
Watching
Melanie Cohen (Content Editor): “Perfect Marriage Revenge,” a soapy drama about a woman whose scheming adoptive mother inadvertently causes her to get into a car accident, die, and then wake up a year earlier. Havoc ensues as she takes revenge on the people who wronged her.
Reading
Andrew Leahey (Columnist): “Little Lindy Is Kidnapped: How the Media Covered the Crime of the Century,” by Thomas Doherty—a fascinating account of New Jersey’s most famous crime!
Listening
Daniel Xu (Content Editor): I try to explore holiday music recordings that are new to me at the end of every year, so lately I’ve been listening to Norah Jones’ “I Dream of Christmas” album.
Stay Connected
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