If you want to stick it to big corporations and rein in their real or perceived abuses, use your political prowess and the laws of your own sovereign country to do it. Instead, the Biden administration wants to sidestep this responsibility and cede U.S. corporate tax policy to create a new global corporate tax rate. Price-fixing tax rates, if you will, would make it harder for companies to jump to cheaper countries to do business. Instead of competition, this group of nations seeks to make businesses their captives.
This is not tax policy, it’s the establishment of a cartel.
It’s not lessening income inequality—one of the reasons given for this socialistic move toward, dare I say it, a global government—it’s intended to enrich government.
This one-world tax plan would kill competition and make the 130 countries that have so far signed on—there are only 169 recognized countries in the world—a one-world-ish cartel where individual liberty would take a back seat to corporate liabilities.
Ironically, The Washington Post, whose owner is one of the biggest oligarchs in the world, sounds positively giddy about the plan.
President Biden on Thursday celebrated a victory in his drive to make corporations pay a larger share of the cost of government, as 130 countries endorsed a blueprint for a global minimum tax on giant businesses and pledged to work for final approval by the end of October.
The agreement announced by the Organization for Economic Cooperation and Development (OECD) in Paris showcased the president’s preference for patient diplomacy rather than the unilateral moves favored by his predecessor.
And this is my favorite part. WaPo is excited about this new global-tax-plan money-grab because… COVID.
Potentially the most significant change in global tax rules in 100 years, the accord is designed to stop countries from competing to lure corporations by offering lower tax rates and to help governments fund their operations at a time of soaring pandemic-related expenses. Biden administration officials also describe the tax plan as a partial remedy for the offshoring of manufacturing jobs that have hollowed out American factory towns and fueled populist resentments.
See? The money is destined for government spending.
And the paper explicitly states that the plan is intended to kill competition. It’s “designed to stop countries from competing to lure corporations” with lower corporate tax rates. Ireland, which has the lowest tax rate in the world at 12.5%, is not signing on to membership in this unholy cartel.
Treasury Secretary Janet Yellen says lowering tax rates to make a country more competitive is not good pricing, it’s a “race to the bottom,” therefore, we need a new global tax.
Today is an historic day for economic diplomacy. For decades, the United States has participated in a self-defeating international tax competition, lowering our corporate tax rates only to watch other nations lower theirs in response.
The result was a global race to the bottom:
— Secretary Janet Yellen (@SecYellen) July 1, 2021
This “race to the bottom” is so “bad” for Ireland that it refuses to become a part of this tax cartel because business is so good. When Trump lowered the U.S. corporate tax rate, nearly a trillion dollars was repatriated to the U.S. in 2018, which heretofore had been parked in lower-tax countries.
As it is, Joe Biden and Yellen want to wrap up this global tax entity by October. Gee, guys, what’s the hurry? They also want to raise the U.S. corporate tax rate, reduced by President Trump from 35% to 21%, back up to 25%.
Apparently, Biden needs the political cover to raise taxes on U.S. companies.
But things get even worse. Biden and the OECD cartel would also begin the process of collecting the taxes of internet companies by skimming $100 billion or more and spreading the largesse around to other countries—where these companies make money but don’t have an official presence.
That’s not all. It appears the GOP wants to help. A communique put out by the ranking member of the House Ways and Means Committee, Kevin Brady, and the Senate Finance Committee ranking member, Mike Crapo, reveals they’re buying into the concept of the global tax cartel and looking for leadership on a “digitalization of the economy.” But they want to rearrange the deck chairs by stating that the new one-world tax rate had better be nice to American workers.
The lawmakers stress three key areas where the Administration must take a strong position in favor of American interests:
The global minimum tax must be fair to American workers and companies – any special rates or exemptions offered to foreign competition must be available to Americans.
The global profit allocation formula, including any carve-outs and special inclusions, must not disproportionately affect Americans.
The targeting of American workers and companies by foreign governments must end immediately.
Accepting the premise of a global corporate tax cartel was their first mistake. An email seeking comment from their media representatives went unanswered all day Friday.
And one more thing: You don’t think this tax cartel of nations, if it’s established in October, will stop at corporate tax rates, do you?
The die would be cast for forever global taxation.