TAXING TECH: THE FUTURE OF DIGITAL TAXATION Lilian V. Faulhaber* In recent months, France and the United Kingdom have announced new taxes that are designed to target large multinational tech companies. In response, the United States has threatened trade sanctions. This article introduces the larger context of this controversy. The French and UK taxes are merely two examples of a much larger trend that has been taking place over the last several years, with countries around the world designing tax measures to target the so-called digital economy without ever determining what the digital economy is or how it digfers from the rest of the economy. This article argues that, despite the many differences between the dozens of digital tax measures proposed or implemented over the past decade, two fundamental similarities link them together. First, all of these measures illustrate that countries believe that the current international tax system, which was designed in the 1920s under the auspices ofthe League ofNations, is outdated and needs to be reformed. Second, these digital tax measures focus on three elements of the existing system that countries believe need to be reformed: the physical presence requirement, the low tax rates available in some countries, and the ability of multinationals in particular to earn income without having a physical presence or to shift income to low-tax jurisdictions. Given these areas of agreement, this article considers the likelihood of countries reaching an international solution. This article acknowledges that an effective international solution-where countries agree to the necessary technical details and not just to high-level principles-faces serious challenges given that many countries now benefit from the current system. This article concludes that, if countries cannot agree to real international reform, then the international tax system will face many more years of countries imposing a cascade of inconsistent and overlapping digital tax measures on tech companies. Professor of Law, Georgetown University Law Center. From September 2013 through August 2015, 1 worked at the Organisation for Economic Co-operation and Development (OECD), and I continued to work as a consultant to the OECD until December 2018. The views and opinions expressed in this article are mine alone and do not reflect the official policy or position of the OECD. All discussions and arguments in this article are based on publicly available information. Thank you to the participants in the 2018 AMT Conference sponsored by Georgetown University Law Center, the 2018 National Tax Association Annual Meeting, and the University of Pennsylvania Tax Law and Policy Workshop for comments on earlier versions of this article. All errors remain my own. 145