Chair Yellen answers questions at the March 2016 FOMC press conference. March 16, 2016. Photo by Federal Reserve.
Treasury Secretary Janet Yellen recently encouraged a “global minimum corporate tax rate.” This anti-liberty proposal would turn the world’s governments into a globalized extortion cartel like OPEC but with taxes rather than oil.
In her statement, she said, “it’s important to work with other countries to end the pressures of tax competition.” Trump fought this global Marxism, now Biden is encouraging it. Richard Rubin and Kate Davidson report on Yellen’s proposal in The Wall Street Journal (abridged):
Treasury Secretary Janet Yellen argued for a global minimum corporate tax rate Monday, seeking international cooperation that is crucial to funding the administration’s $2.3 trillion infrastructure proposal.
President Biden’s proposal to raise the corporate tax rate to 28% from 21% would push the U.S. from the middle of the pack among major economies to near the top. The Biden plan would also impose a 21% minimum tax on U.S. companies’ foreign income, remove an export incentive and raise taxes on some foreign companies’ U.S. operations.
If the U.S. raises its tax rates and imposes higher burdens on U.S. companies’ foreign profits, a global minimum tax would help prevent companies based in other countries from having a significant potential advantage. That coordination and the ensuing tax revenue—not necessarily the aims of U.S.-based companies—rank high on the administration’s priorities.
Although countries are working together through the international talks, each has its own set of incentives built into their tax systems: generating revenue, protecting domestic industries and attracting foreign investment.
Countries’ efforts to cut rates have slowed in recent years, stabilizing around the mid-20s, where the U.S. is when state taxes are included. International agreements have pushed countries to link activity and taxation, so it is now harder for companies to put profits in low-tax countries like Ireland without having substantial operations there.
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