Corporations (artificial persons) have been holding humans’ leashes when they should be wearing the collars. It seems people are finally stirring in their sleep about that, if not fully awake yet:
London (CNN) — Finance ministers from the Group of Seven (G7) nations have put their support behind the Biden administration’s ambitious plan to overhaul the global tax system, backing a minimum tax of at least 15% on corporate earnings.
UK finance minister Rishi Sunak announced the agreement in a video posted on Twitter Saturday, saying G7 finance ministers — hailing from Canada, France, Germany, Italy, Japan, the UK and the US — had”reached a historic agreement to reform the global tax system to make it fit for the global digital age and, crucially, to make sure that it’s fair so that the right companies pay the right tax in the right places.”
The agreement was made during a G7 meeting of finance ministers in London, attended by US Treasury Secretary Janet Yellen, where she sought backing for the administration’s efforts to rewrite international tax rules and discourage American companies from booking earnings abroad.
Yellen said Saturday that the agreement was a “significant, unprecedented commitment,” from the world’s richest economies aimed at preventing companies from avoiding taxes by shifting profits overseas.
Stick an ear out your window and listen for corporate howls. Look for smaller economies to exploit the situation. Bribes will be paid. “It’s not personal. It’s strictly business” isn’t just a line from a Coppola film.
Biden plans to use the increased tax receipts at home to offset the cost of his ambitious infrastructure plan (yet to pass Congress). Eliminating offshore tax havens — there will always be some — should help discourage companies from relocating operations from the U.S. Coprorations with global reach will also factor labor and shipping costs into such decisions, so the 15% minimum tax among the G7 will be no panacea for job displacement.
But it’s a start.