U.S. Backs 15% Global Minimum Tax to Curb Profit Shifting Overseas

Pretty hype about this TBH. There is a long history of companies domiciling in say, Monaco, The Cayman Island, Panama etc to avoid taxes and regulations where they mainly operate. My understanding is that the current process in vogue for the mega cap companies is the &quot;double irish dutch sandwich&quot; <a href="https:&#x2F;&#x2F;www.investopedia.com&#x2F;terms&#x2F;d&#x2F;double-irish-with-a-dutch-sandwich.asp" rel="nofollow">https:&#x2F;&#x2F;www.investopedia.com&#x2F;terms&#x2F;d&#x2F;double-irish-with-a-dut...</a><p>No one, including tax lawyers, will tell you with a straight face that this is the way things were expected&#x2F;designed to work. All of these tax avoidance strategies are emergent properties of complex systems that are the result of uncoordinated action amongst individual actors that cannot be fixed without collective organization. I support this and 15% seems reasonable to me.

If they would just close the loop holes that allow things like having Apple, setup a subsidiary that licenses its own stuff back to itself so it can move profits around the world ... you&#x27;d solve this problem.<p>Make a rule, if you own &gt;50% of a company, you can&#x27;t buy trademarks, patents, whatever from yourself.

I am concerned about two things seldom discussed by people who endorse increasing tax revenues in ways like this.<p>1) I don&#x27;t like unelected, global, IGOs who have powers over citizens without citizens&#x27; consent, such as forcing a tax increase in tax havens which crushes local autonomy in those places. The US can do this by embargoing a tax haven.<p>Imagine if you are a resident and business owner in Monaco, etc., who is now facing an increase in corporate tax that is only necessary because the US decided to threaten sanctions against your country to make it less attractive to (ostensibly) US corporations. You could make a moral argument about what tax revenue should be but I don&#x27;t think it&#x27;s moralistic because of my next point.<p>2) No one ever discusses fiscal responsibility or whether tax revenue is well spent. The solution is always to increase taxes or to increase the power to collect taxes.

The fact that everyone views it as normal for the US to endorse global tax laws is pretty frightening

While I have never looked deeply into the topic of big business corporate taxes, I do share a strong suspicion that the corporate tax system is flawed, and would be supportive of reform in the system. Including international cooperation for solving this.<p>But the way they went about this is disappointing.<p>There should be a way to solve this that would still allow countries to compete in attracting businesses. They talk as if they want everybody to settle for mediocrity.<p>&gt; Treasury Secretary Janet L. Yellen has warned that a global “race to the bottom” has been eating away at government revenues.<p>This literally sounds like something a cartel would say.

It’s interesting to see a multinational standard to set a “standard” for taxation.<p>Seems odd to start with corporate income taxes as it seems pretty efficient to not tax corporations and encourage more distribution to individuals and tax there.<p>I remember in my microeconomics101 course how taxes on corporate profit are easy to squish around with tax deductible benefits that reduce profit (eg, country club dues are an expense, corporate jets are an expense, 5000 square foot offices are an expense). Since it’s hard to police these expenses, it’s more efficient to just push all profits to salary and dividends to individuals and tax there since there are so many fewer individual exemptions.

Countries should get taxes back from a corporation at a ratio equivalent to their contributions of a corporations success&#x2F;profits.<p>US has a good legal system, fairly educated population, market, etc. Most of these corps would not have made it in a country like Russia, or they would&#x27;ve been taken over in China etc. They need to pay their fair share back into the system that allowed them to thrive.

You will never close all the loopholes. It is impossible and the real people in power don&#x27;t want it. High taxes, like in most of current society, will always mostly keep the poor poor and eliminate the middle class; politicians just dress it up as redistributing money from the rich.

I thought I remembered at some point (might have been more than a decade ago) that I heard that most economist thought that corporate income taxes were basically a bad idea? Is this no longer held as a valid belief?<p>Long term, I would almost prefer if we just moved to taxing people&#x27;s assets. Maybe we can force corporations to basically pay out most of their profits to shareholders to avoid having them get too large?

This feels like American politicians trying to force countries like Ireland must pay for US fiscal mismanagement

Why would smaller countries who are looking for a competitive edge to attract business ever agree to this? It seems like this is really just in the interest of the US and other big incumbents that rely on large tax revenue already. But even within that group, enforcing such a minimum really has the effect of cementing the incumbents&#x27; hold on economic power. So why would any nations other than the US agree to this, when others stand to benefit by gaining economically at the cost of the US? Personally I also find the notion of a global order that prevents flight (of companies, capital, etc.) to be a bit dystopian. I don&#x27;t want any power (a nation, or a coalition of nations) to have that kind of influence or authority, and this proposal doesn&#x27;t give me good vibes.

Tax complexity is a function of rates. The higher rates go the more value any particular additional complexity has. Maybe this is a good idea and maybe it&#x27;s not but to the extent rates are high it&#x27;s going to be a disappointment as a way to increase revenue.

This is a central planning band-aid on the gashing flesh wound of an overly complex tax system.

This article is very sparse on the actual technical details. How would the tax be distributed? What happens if one or a few countries get disillusioned and just stops participating? Isn&#x27;t that somewhat the plot of the Star Wars prequels?

Is this similar to how the EU has minimum tax rates on businesses? Without recalling too many details, I recall Apple and Ireland being sued by the EU government for a sweetheart tax deal they put in place.

It’s not about a level, it’s about the rule. To everyone who says “15% is fair,” consider what you’ll feel like at 70% marginal.<p>Literal global rule. Some would call that overreach.

It would be interesting if they took it a step further and redistributed that 15% equally across every nation in the world

Does humanity really want an authority powerful enough to claim dominion over the entire planet?

This will eliminate competition for low taxes. A pretty scary proposal.

we need jurisdictions to compete on how much they can provide in return for as little as possible in collected taxes.

Just watch, the next step is to apply this concept to US Sates. Require a minimum 5% state income tax and if less, have the IRS take the difference.

Thank God the US is taking charge of the GLOBAL finances. What could go wrong!?<p>This is ladder pulling. Who needs smaller countries competing on fiscal rates when all tech should be registered in Dellaware?<p>Note how it&#x27;s a small 15% to start with. If this goes through and all the treaties are in place moving it to 25% should be much easier.<p>Maybe the US should investigate all the creative ways US corporations pay so little tax anywhere. It&#x27;s a problem caused by US and US corporation and now they come to provide a solution.

So move it to countries not so authoritarian and interested in actually competing. Problem solved.

Good news. Good luck getting tax havens to agree.<p>Of course they&#x27;ll need to close the US&#x2F;UK buy back loophole...

They&#x27;re fumbling around trying to find any way to get out of the messes they keep creating. Yet, no one dares to talk about the true underlying causes.