US Treasury Secretary Janet Yellen advocated a global minimum corporate tax rate in order to stop multinational corporations from seeking tax havens.
The BlackRock controlled treasury secretary revealed that US administration officials are working with G20 nations to agree to a global minimum corporate tax plan.
Yellen’s remarks come ahead of the semiannual meetings of the International Monetary Fund (IMF) and World Bank set for this week.
There’s good reason to impose uniform taxes around the world to stop companies doing tax evasion, which throws the burden of taxation on the working class and the middle class. So that’s in its own right.
That is to be applauded,” says Steve Keen, honorary professor of economics at University College of London and author of “Debunking Economics.
If implemented, the plan could help address the system in which the wealthy “basically evade tax and leave it to the lower classes to pay for the state,” he suggests.
So something like this, which stopped corporations also using tax advantages to go offshore, maybe bring some corporations back onshore because it makes more sense to be as close as you can to a larger market that might well help boost America’s competitiveness with the rest of the world.
Obviously, the global minimum tax idea will be opposed by multinational corporations, according to the professor: “They’ll be outraged to begin with,” he says. “But they’ve always been champions of creative accounting.
The average corporate rate in the G7 is 24%, while nine countries are recently reducing their corporate rate, according to the Tax Foundation.
Meanwhile, two European industrialized nations, Ireland and Hungary, are known for their low 12.5% and 9% rates, respectively.
The tax group summarizes that 100 of the 223 separate jurisdictions surveyed for the year 2020 have corporate tax rates below 25%, while 117 have tax rates above 20% and at or below 30%.
It’s about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises.
Still, Keen remains skeptical over the US administration’s ability to convince global governments to adjust their working tax systems to the US needs.
Americans often think that imposing their rules on the rest of the world is the best thing that can happen to the rest of the world.
Most of the time, the rest of the world disagrees. So I think she can try as much as she likes, but there’s no way to enforce something like this.
The best Yellen can hope for is getting countries to reduce the number of tax havens or to penalize corporations that use them, the professor believes.
Sputnik / ABC Flash Point News 2021.