The Group of 20 can join in a minimum corporate tax cartel. That won’t prevent Big Tech giants from funding cooperative countries willing to host their financial shenanigans.
A global corporate minimum tax however could potentially tie the hands of future administrations trying to lower our corporate tax.
G-20 finance ministers in July had already agreed on a 15% minimum tax. Its formal endorsement at the summit Saturday in Rome of the world’s economic powerhouses was widely expected.
Yellen predicted in a statement that the deal on new international tax rules, with a minimum global tax, “will end the damaging race to the bottom on corporate taxation.”
No, it won’t, but, as usual, it will help the big boys squeeze smaller companies.
The deal did fall short of U.S. President Joe Biden’s original call for a 21% minimum tax.
President Trump sharply cut the tax rate to 21%, but his original proposal had been 15%. But Biden had tried to raise the tax rate to 28% and Democrats are still pushing a 26% rate.
So a 15% minimum corporate tax would still be far lower than where the Democrats want our corporate tax rate to be.
Pushing for a minimum rate doesn’t do much to make America more competitive when Democrats keep trying to raise our rates.