Global corporate minimum tax rate

[gounion]

Fifteen percent:

President Biden and the other national leaders gathered for the Group of 20 summit formally endorsed a new global minimum tax on Saturday, capping months of negotiations over the groundbreaking tax accord.

The new global minimum tax of 15 percent aims to reverse the decades-long decline in tax rates on corporations across the world, a trend experts say has deprived governments of revenue to fund social spending programs. The deal is a key achievement for Treasury Secretary Janet Yellen, who made an international floor on corporate taxes among the top priorities of her tenure and pushed forcefully for swift action on a deal.

The plan was already endorsed by the finance ministers of each country, but its official approval by the heads of state puts added pressure on the difficult task of turning what remains an aspirational agreement into legislation.

Nearly 140 countries representing more than 90 percent of total global economic output have endorsed the deal

Simple fairness.

[Libertas]

Fifteen percent:



Simple fairness.

The "stupids" think that as long as the rich stay very very rich and are not asked to contribute, they will be fine and we will be pissed off. It is that simple I think, for them.

[ProfX]

It's a problem requiring a global solution.

After all, if I have a 5% or zero corporate tax rate, and other countries have a 15% one, corporations will continue to relocate in the outsourcing game, seeking the lowest point. But if there's a global floor ... of course, this agreement is between 140 countries, and I think there's around ~220 in the world.

A good start though.

[Bludogdem]

I have doubts as to the likely effectiveness of a global minimum tax. This will be nothing more than lip service with planetary sized loopholes.

[gounion]

I have doubts as to the likely effectiveness of a global minimum tax. This will be nothing more than lip service with planetary sized loopholes.

Let the global corporations rule the world, eh? Don't even PRETEND to make them pay any taxes!

[ProfX]

The question is who enforces it.

International law enforcement is a tricky question right now on the planet. The UN can decree a lot of things, but they don't really have the ability to enforce them.

Oddly enough, one of the few agencies globally that seems to have some real teeth and power is the WTO.

This looks like an agreement that basically all comes down to all 140 signatory nations saying "we'll do it". It is better than nothing, but what happens if they don't live up to their word. Like with climate agreements.

[Number6]

The question is who enforces it.

International law enforcement is a tricky question right now on the planet. The UN can decree a lot of things, but they don't really have the ability to enforce them.

Oddly enough, one of the few agencies globally that seems to have some real teeth and power is the WTO.

This looks like an agreement that basically all comes down to all 140 signatory nations saying "we'll do it". It is better than nothing, but what happens if they don't live up to their word. Like with climate agreements.

I think when it comes time for the corporation to pay their taxes they'll have to declare which country they are incorporated/headquartered in and pay taxes to that company. For example, if they're incorporated/headquartered an a country that's a signatory of the agreement then that information would most likely be shared with the other signatories. For example, if Corporation X is incorporated/headquartered in country A they couldn't claim being incorporated/headquartered in country B to avoid paying taxes in country A because country B would tell the other countries Corporation X isn't incorporated/headquartered in country B.

[gounion]

I think when it comes time for the corporation to pay their taxes they'll have to declare which country they are incorporated/headquartered in and pay taxes to that company. For example, if they're incorporated/headquartered an a country that's a signatory of the agreement then that information would most likely be shared with the other signatories. For example, if Corporation X is incorporated/headquartered in country A they couldn't claim being incorporated/headquartered in country B to avoid paying taxes in country A because country B would tell the other countries Corporation X isn't incorporated/headquartered in country B.

They play countries against each other exactly like they play states against each other.

What they do in the states used to be extortion and bribery. Now it's all legal.

[Number6]

They play countries against each other exactly like they play states against each other.

What they do in the states used to be extortion and bribery. Now it's all legal.

Conservatives "American Exceptionalism" at its finest.

[JoeMemphis]

I think when it comes time for the corporation to pay their taxes they'll have to declare which country they are incorporated/headquartered in and pay taxes to that company. For example, if they're incorporated/headquartered an a country that's a signatory of the agreement then that information would most likely be shared with the other signatories. For example, if Corporation X is incorporated/headquartered in country A they couldn't claim being incorporated/headquartered in country B to avoid paying taxes in country A because country B would tell the other countries Corporation X isn't incorporated/headquartered in country B.

Right now this is all just talk. However if somehow it becomes some kind of international treaty/obligation properly ratified, the enforcement mechanism will be key. If you cannot enforce it then what have you accomplished? Finally, does anyone wonder if one of the effects might be to drive higher corporate rates down to around 15%?

[Number6]

Right now this is all just talk. However if somehow it becomes some kind of international treaty/obligation properly ratified, the enforcement mechanism will be key. If you cannot enforce it then what have you accomplished? Finally, does anyone wonder if one of the effects might be to drive higher corporate rates down to around 15%?

And what effects might those be and please show us you support.

[JoeMemphis]

And what effects might those be and please show us you support.

Support for what? It’s a discussion board. It’s an opinion accompanied by a question. I don’t recall seeing a bunch of support for your post.

[Number6]

Support for what? It’s a discussion board. It’s an opinion accompanied by a question. I don’t recall seeing a bunch of support for your post.

Ooookay, so it's just your opinion so that tells me what you think.

[JoeMemphis]

Ooookay, so it's just your opinion so that tells me what you think.

It’s a discussion board full of opinions.

[ProfX]

I frankly think if it does end up working, since there are around 60 or more countries who are not signatories, multinational corporations will start relocating their HQs and operations to those places.

Just as in the U.S., they will relocate operations to low-tax states, globally, they outsource to low-tax countries. We can debate whether this was the best way to do it, but the problem of global outsourcing requires global cooperation.

I sure look forward to a day where globally something is enforced besides just free trade agreements by the WTO. Weird how it seems to be the only global agency with some real 'teeth' - well, them and the World Bank/IMF, see structural adjustment programs.

We can debate what the WHO got right or wrong in the pandemic, but they don't have much power to force any country to do anything. Starting, yes, with China.

[gounion]

Won't matter too much to China, they don't let foreign corporations to operate there. No multinational manufactures there. They have to hire Chinese companies to do it for them. That's why suddenly we couldn't get any masks or other PPE at the start of COVID, because the Chinese made most of them, and kept them for themselves. Hell, if China decided to withhold manufacture of our prescription drugs, people would drop dead all over, because it would take months to ramp up production to replace what they make.

Let alone our military would be in trouble because of all that is made there for them.

But guys like GrennGrass and Joe thinks this is great!

[ProfX]

Won't matter too much to China, they don't let foreign corporations to operate there.

They do the next best thing. They set up "domestic" operations like Foxconn which basically contracts out Chinese workers to do serf-like work for all of silly-conned valley, including Apple, Dell, Samsung, Toshiba, and all the rest.

Complete with suicide nets to catch those who are so horrified by the work conditions they jump off the roof of the factory.

China is just a country that calls itself Communist at this point, but I would call it state authoritarian capitalism, complete with them continuing to make sure foreign corporations have Chinese serf labor to take advantage of.

My real main point, the WHO aside, is I would love the ILO (International Labor organization) to have the same power to enforce global labor rights, as the WTO has to enforce global trade agreements on behalf of MNCs or the IMF has to take charge of countries' economic policies when they have debt due to SAPs. But he who has the gold makes the rules.

Had you heard of the ILO? I bet you've heard of the WTO. Well, this may have something to do with why most newspapers have a business section, but no labor section.

[Number6]

It’s a discussion board full of opinions.

So, please give us your opinion of the effect this tax will have.

[JoeMemphis]

So, please give us your opinion of the effect this tax will have.

All I know as of now is that it’s been proposed and certain countries have agreed to the concept. I haven’t seen anything in writing. I haven’t seen anything regarding enforcement. My personal opinion is that it will be difficult to enforce. I also think that companies in high tax countries will continue to organize in low tax countries. It’s all just speculation at the moment.

[gounion]

All I know as of now is that it’s been proposed and certain countries have agreed to the concept. I haven’t seen anything in writing. I haven’t seen anything regarding enforcement. My personal opinion is that it will be difficult to enforce. I also think that companies in high tax countries will continue to organize in low tax countries. It’s all just speculation at the moment.

...and your speculation is not to do it, right?

[Number6]

All I know as of now is that it’s been proposed and certain countries have agreed to the concept. I haven’t seen anything in writing. I haven’t seen anything regarding enforcement. My personal opinion is that it will be difficult to enforce. I also think that companies in high tax countries will continue to organize in low tax countries. It’s all just speculation at the moment.

I disagree. With computer technology it's easier for countries to share information amongst each other than previously. It wouldn't be hard for countries to adopt a standard computer program that would consolidate where corporations are incorporated/headquarter to determine who should be taxing them.

[JoeMemphis]

I disagree. With computer technology it's easier for countries to share information amongst each other than previously. It wouldn't be hard for countries to adopt a standard computer program that would consolidate where corporations are incorporated/headquarter to determine who should be taxing them.

I guess anything is possible. But we don’t consistently employ those kind of tools in this country. Imagine trying to do such a thing globally. Besides, why would corps hide anything? We’ve said it’s okay to go from one country to the next as long as you pay the minimum somewhere. So if the corporate tax rate is the driver, what’s to keep a US based company from moving to another country that has the minimum rate?

[gounion]

I guess anything is possible. But we don’t consistently employ those kind of tools in this country. Imagine trying to do such a thing globally. Besides, why would corps hide anything? We’ve said it’s okay to go from one country to the next as long as you pay the minimum somewhere. So if the corporate tax rate is the driver, what’s to keep a US based company from moving to another country that has the minimum rate?

Why would corps hide anything?

Are you f'ing KIDDING ME? They hide their slave labor, they hide their child labor. They hide the bribes they pay to operate in several countries.

They hide EVERYTHING.

[Number6]

I guess anything is possible. But we don’t consistently employ those kind of tools in this country.

I'm sure business and government have some form of computer programs that interact with each other transferring information back and forth.

Imagine trying to do such a thing globally.

Actually, it's not that difficult. The main problem would choosing the program for every country to use.

Besides, why would corps hide anything?

Really? It's not that obvious?

We’ve said it’s okay to go from one country to the next as long as you pay the minimum somewhere. So if the corporate tax rate is the driver, what’s to keep a US based company from moving to another country that has the minimum rate?

If you remove the tax advantages then about the only advantage to moving overseas is labor and shipping cost. With the international supply chain breakdown that we're now experiencing businesses will be taking into account the increased international shipping cost versus shipping costs within the U.S..

[JoeMemphis]

I'm sure business and government have some form of computer programs that interact with each other transferring information back and forth.


Actually, it's not that difficult. The main problem would choosing the program for every country to use.


Really? It's not that obvious?


If you remove the tax advantages then about the only advantage to moving overseas is labor and shipping cost. With the international supply chain breakdown that we're now experiencing businesses will be taking into account the increased international shipping cost versus shipping costs within the U.S..

If country A has a max tax rate of say 40% and country B has the minimum rate of 15 percent, there is still an incentive to move from country A to country B.