Extremist American politicians aid and abet the Hungarian autocratic regime
On July 1, 2022, The Washington Post reported that a number of Republican lawmakers were actively working with the authoritarian regime of Hungarian Prime Minister Viktor Orbán to undermine US diplomatic efforts to end corporate tax avoidance. It’s part of a far-right pattern in the United States that openly supports authoritarian regimes whose interests run counter to those of America and its allies.
In this case, however, these lawmakers went further than simply expressing support for or celebrating the Orbán regime; they reportedly gave direct strategic advice to the Hungarian government on how to thwart the diplomatic efforts of the United States and its allies. These diplomatic efforts are aimed at promoting a agreement signed by more than 130 countries ensure that large multinational corporations pay at least a minimum level of tax in the countries where they operate. In June, Hungary suddenly announced that it would oppose the adoption of the agreement by the European Union. While European leaders promised that “the global minimum tax will be implemented in the coming months with or without Hungary’s agreement”, Budapest’s obstruction will at least delay the EU’s approval, which was expected to be unanimous.
It’s one thing for Republican lawmakers to oppose companies that pay a minimum tax. It is quite another for them to ally themselves with the most authoritarian regime in Europe, and an ally of Russian President Vladimir Putin, in an attempt to block it.
It is high time to hold accountable American elected officials who blatantly associate themselves with illiberal regimes in an attempt to block or undermine broadly popular policies in their own country.
In May, a month before these lawmakers’ attempts to influence US policy through their endorsement of Orbán, the EU, with US backing, demanded a strict ban on oil imports against Russia in an effort to end his barbaric invasion of Ukraine. Hungary was vocally resisting and MAGA extremists were celebrating the Hungarian dictatorial regime in Budapest. Notably, Orbán returned to power in 2010 with a two-thirds supermajority. Since then, his Fidesz party has overhauled the Hungarian constitution, “undermined the independence of the judiciary, gutted the media, targeted minorities and embezzled European Union funds.”
Cooperation between the American and Hungarian right includes:
Collusion to obstruct the corporate tax deal that has long been a diplomatic priority of the United States and its allies
- In October 2021, more than 130 countries agreed on a framework “reform international tax rules and ensure that multinational companies pay a fair share of taxes, wherever they operate”. The Framework Agreement was the culmination of diplomatic efforts by the United States and its allies over many years, including the Bidens and Asset administrative. He reflected that countries around the world have a common interest in ensuring that the largest corporations cannot avoid paying at least a minimum level of tax on their profits so that countries can make the necessary investments in their population and their economies to stimulate economic growth. Global cooperation is necessary because corporations have proven very adept at artificially allocating their profits to low-tax or zero-tax jurisdictions, even when the economic activity that generated the income took place elsewhere.
- Last month, the European Union was about to unanimously adopt the agreement for its 27 Member States. Adoption by the EU would have been a major step forward for the overall agreement. But at the last minute, Hungary raised brand new objections and prevented the EU from moving forward.
- Given the obstructionism of Budapest, the US Treasury Department decided on July 9 to terminate the existing tax treaty between the United States and Hungary.
- As the United States and its allies work to push forward the multilateral tax deal, leading congressional Republicans are actively undermining them.
- The United States was considering implementing the 15% foreign corporate minimum tax in the pending fiscal reconciliation bill when it led Republicans in two House Ways and Means subcommittees. wrote in the direction of Hungary. They explicitly backed Hungary’s opposition to the EU’s adoption of a 15% minimum corporate tax, provisions that match what US Treasury Secretary Janet Yellen has been working with US lawmakers. to go forward. These leading House Republicans also directly criticized US Treasury negotiators for pursuing the positions the EU sought to take.
- Pat Toomey (R-PA), a Senate Finance Committee chief, likewise bliss Hungary’s action and said, “It would be a grave mistake for the United States to adopt this tax increase globally.
- The Washington Job reported that some Republican lawmakers have also been working behind the scenes to provide strategic advice to Hungary as it obstructs US diplomatic goals. Hungarian foreign minister said in a recent interview“We constantly consult the Republicans. There is ongoing professional consultation on this issue.
- Given Hungary’s obstruction of the OECD agreement, the US Treasury Department announcement on July 9 that he would terminate the US-Hungarian tax treaty, noting that “the benefits [of the treaty] are no longer reciprocal. Members of the Republican committee responded by expressing their support for Hungary against what they called bully[ing]by the United States.
Supporting Budapest as it thwarts EU efforts to end Russia’s war in Ukraine
- Since the beginning of May, the European Union, in collaboration with the United States, has been struggling to pursue embargo on Russian oil imports to deprive Putin of a revenue stream that fuels his barbaric invasion into Ukraine.
- On May 18, the Conservative Political Action Committee (CPAC) presented its first conference in Budapest amid EU tussles with Hungary over oil sanctions. CPAC, along with President Donald Trump, glorified Hungarian dictator Orbán, whose rule in Hungary is modeled on the MAGA model. At CPAC, Orbán call for the right on both sides of the Atlantic to “coordinate the movement of our troops…in the battle waged for Western civilization”. This week, CPAC announced that he will welcome Orbán as the keynote speaker at its August 4 conference in Dallas.
- Orban has Hungary’s increased dependence on Russian energy strategically since returning to power in 2010.
- In late May, EU leaders agreed to a crude oil import ban, which aims to halt 90% of Russia’s crude imports into the 27-nation bloc by the end of the year. They only did it in exempting Hungary.
- On May 31, when an agreement was reached without Hungary, German Chancellor Olaf Scholz said“The sanctions have a clear objective: to induce Russia to end this war, withdraw its troops and agree to a reasonable and just peace with Ukraine.”
Even as these Republican radicals accompany, advise and guide their Hungarian counterparts in the service of subverting American policies they disagree with — like making sure all companies pay their fair share and pushing Russia to end to his invasion of Ukraine – they shamelessly accuse their own country of “tyrant[ing] Hungary … and interfere[ing] in a process of drawing up the internal policies of the European Union. It is high time to hold accountable elected Americans who blatantly associate themselves with illiberal regimes in an attempt to block or undermine very popular policies in their own country.