Minimum Tax, Maximum Governance
Minimum Tax, Maximum Governance

Summary/Abstract: The OECD's Pillar Two project aimed to establish a global minimum tax for large multinationals, but its most enduring impact will likely be its role in ushering in an indefinite period of maximum governance with an increasingly complex and fragmented transnational tax order that is only exacerbated by the recent political shift in the United States. As non-OECD member countries seek to expand their influence on global tax relations through the UN while continuing to engage with the OECD, a proliferation of committees, meetings, negotiations, and collaboration among governmental and nongovernmental organizations will amplify the already intricate politics of global tax policymaking. The Trump administration's 'America First' trade policy and its stance on international cooperation have further complicated these dynamics, highlighting the challenges of achieving a cohesive global tax framework. Whether this next period of global tax relations will eventually result in better, more equitable policies cannot be foretold. What is clear is that, beyond any substantive policy reforms it may bring, Pillar Two is part of a cycle of institution-building arising from widespread dissatisfaction with past governance models, raising critical questions about the future of international tax relations and the value of a decentralized, if more resource-intensive, process.

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