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Thread: Janet Yellen to call for global minimum corporate tax rate

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    Janet Yellen to call for global minimum corporate tax rate

    Why would other nations agree to this? Many use lower corporate tax rates to boost the domestic economy.


    Janet Yellen to call for global minimum corporate tax rate

    anet Yellen will use her first major address as Treasury secretary to argue for a global minimum corporate tax rate, Axios has learned, as she makes the case for President Biden’s plan to raise U.S. corporate taxes to fund his $2 trillion+ infrastructure plan.Why it matters: Convincing other countries to impose a global minimum tax would reduce the likelihood of companies relocating offshore, as Biden seeks to increase the corporate rate from 21% to 28%.

    • “Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids,” Yellen will say today in a speech to the Chicago Council on Global Affairs, according to an excerpt of her prepared remarks obtained by Axios.
    • "It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government."
    • "We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom."

    The big picture: President Trump lowered the U.S. rate from 35% to 21%, arguing that U.S. companies were at a global disadvantage and were being incentivized to relocate offshore.

    • The average corporate rate in the G7 is 24%, with some nine countries recently lowering their corporate rate, according to the Tax Foundation, a conservative tax group.
    • Biden’s plan would also raise the international minimum rate for foreign profits from U.S. companies from 10.5% to 21%, which would still be lower than the 28% domestic corporate rate.
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    "and that all citizens fairly share the burden of financing government."

    Indeed, we will by paying higher prices for goods and services.
    Tradition is not the worship of ashes, but the preservation of fire. ― Gustav Mahler

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    Why would anyone call for a global anything?

    Who does she think has this authority?

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    Quote Originally Posted by carolina73 View Post
    Why would anyone call for a global anything?

    Who does she think has this authority?
    It won't be a global tax, but a treaty that nations would be bound to enact domestic tax law.
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    Quote Originally Posted by Peter1469 View Post
    It won't be a global tax, but a treaty that nations would be bound to enact domestic tax law.
    The end would be the same - getting gyped by the government.
    "For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places."

    Ephesians 6:12

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    In other words, we can't flat-out compete with them (or don't want to) so DC wants to rig the system so that all governments get paid the same corporate tax. If I was King, I'd say "screw you, USA, we're going to steal your businesses by undercutting you on taxes" ( like the cities and states of the USA do to each other)
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    Quote Originally Posted by DGUtley View Post
    In other words, we can't flat-out compete with them (or don't want to) so DC wants to rig the system so that all governments get paid the same corporate tax. If I was King, I'd say "screw you, USA, we're going to steal your businesses by undercutting you on taxes" ( like the cities and states of the USA do to each other)
    That is what I expect too.
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    Given that big global corporations are in cahoots with Biden and the Democrats, I wonder what effect this proposal will have. Like don't bite the hand that feeds you.
    Tradition is not the worship of ashes, but the preservation of fire. ― Gustav Mahler

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    Quote Originally Posted by Chris View Post
    Given that big global corporations are in cahoots with Biden and the Democrats, I wonder what effect this proposal will have. Like don't bite the hand that feeds you.
    Do the corporations care? They don't pay corporate income taxes. Consumers do.
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    The Global Minimum Corporate Tax Is a Form of Denial


    The Biden Administration has cast its recent push for a global minimum corporate tax rate as a principled stand, an exercise in using multilateral agreements to coordinate a reshaping of the global corporate tax landscape. Ultimately, however, these appeals to a higher tax policy purpose are a load of bunk — the overriding goal is extracting as much money as possible.

    In announcing the United States’ interest in establishing a global minimum corporate tax of 21 percent, Treasury Secretary Janet Yellen described her intent to halt a “race to the bottom” in which countries had to compete with one another through their tax code to attract business. But a race to the bottom in corporate taxes really only harms countries’ revenue collections.



    After all, corporate taxes are one of the most economically harmful forms of tax collection. Not only does the incidence of the tax generally fall on labor, which bears 70 percent or moreof the burden of corporate taxes through reduced wages, but corporate taxes also hamper economic growth by reducing investment. Broadly speaking, competition between countries that pushes corporate tax rates down is a good thing.


    Rather, countries falling in behind the United States on global minimum taxes want to be able to raise taxes with impunity. The appeal of a global minimum tax to countries like France (and, until the 2017 tax reform law, the United States) that assessed high corporate tax rates is the opportunity to have their cake and eat it too. With an effective minimum tax in place, high-tax countries could keep their high corporate tax rates in place and while at the same time making it difficult or impossible for companies to lower their tax costs by moving operations to another developed country.


    The irony is that these self-interested motives are exactly why efforts at a multilateral agreement establishing a global minimum tax rate are doomed to fail. As Joseph W. Sullivan argues, the incentives in any such agreement are the opposite of those in a multilateral trade deal.


    When a single country is deciding whether to join a regional trade agreement, for example, the incentives all align to push that country towards joining, especially as more of its neighbors do. Should that single country not do so, its economic competitiveness would be harmed to a far greater extent than the other members of the trade agreement.



    On the other hand, when it comes to a multilateral agreement to respect a global minimum corporate tax rate, holdout states only benefit more as other countries join.


    Read the rest of the article at the link.





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