Axios reports that Janet Yellen has a modest proposal:
Janet Yellen will use her first major address as Treasury secretary to argue for a global minimum corporate tax rate, Axios has learned, as she makes the case for President Biden’s plan to raise U.S. corporate taxes to fund his $2 trillion+ infrastructure plan.
Why it matters: Convincing other countries to impose a global minimum tax would reduce the likelihood of companies relocating offshore, as Biden seeks to increase the corporate rate from 21% to 28%.
Perhaps. But so long as the corporate model for organizing capitalist enterprises hold firm, businesses will, like water, seek the lowest cost points in hopes of maximizing profit. They will seek to externalize costs and internalize profits. Ask Walmart.
That’s not to say trying to tame the beasts is not worth the attempt, but manage your expectations.
The bottom line: By trying to convince other countries to impose a global minimum tax, Yellen is acknowledging the risks to the American economy if it acts alone in raising corporate rates.
● “Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity,” she will say.
Sure. But successful (for some) as it is, corporate capitalism itself still needs an upgrade. It will lean toward a Tom Sawyer model until that’s no longer part of its DNA. The beasties won’t be satisfied until we are paying them to work for them.