Yellen calls for minimum global corporate income tax

Whatever the corporate tax rate, the big players will continue to find legal ways to avoid paying it. And how many US cities bend over backwards to offer freebies to large corporates in the hope that they will build facilities there.

This policy may simply be used to build tax borders, blocking foreign companies because foreign nations charge them lower taxes. It's already happening in the UK, where demands that online traders comply with UK tax systems for sales tax has seen an increasing number of companies ban UK customers from buying from them. The UK is becoming more North Korean every day with these indirect borders. Wherever you are, you will be getting more of them soon too.

Makes no sense.

America is sanctioning 6 countries for taxing Big Tech.

What has happened to Yellen?

offset any disadvantages that might arise from the Biden administration's proposed increase in the U.S. corporate tax rate. 

That’s right, hiking corporate tax rates has disadvantages - lower tax revenues for one, and less business investment and therefore lower wages.

Even the OECD has done studies that funds that corporate tax is one of the most harmful taxes.

If it is a tax on fossil fuel or tobacco people understand that the effect of the tax is to get less fossil fuel and tobacco consumption, higher corporate tax rates have the same problem for job creating businesses.

Citing a “30-year race to the bottom” in which countries have slashed corporate tax rates in an effort to attract multinational businesses

That’s a race to the top! The corporate tax is a bad tax, so it being cut leads to inverse results. You go up by cutting it, not by hiking it. Hiking tax is a race to the bottom, not the other way around.

Yellen said the Biden administration would work with other advanced economies in the Group of 20 to set a minimum. 

Good luck getting the G20 to lose their minds, and if they did, then what?

The G20 would lose competitiveness with those countries outside of the G20. The G20 would race to the bottom against the rest of the world.

What happened to Yellen? Why did she go crazy? I guess she just has to toe the party line now that she has a job in the govt, it happens to good people...

“It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods.”

Insane attempt at justification.

When the economy is terrible the corporate tax does not raise stable revenues. So just when stable revenues are needed, they aren’t there.

Sweden, France - countries like that are cutting their corporate tax rates. US with higher corporate tax rates than France? Huh?

Go France!!

Finally, look at US tax revenues 2 years after the 2017 tax reforms - back to where they were before the tax cuts. Higher tax rates won’t likely lead to higher revenues.

“The problem for a very long time has been inflation that’s too low, not inflation that’s too high.”

Inflation itself is another tax, a regressive one. Anyone craving inflation needs to explain to the poor people living in the fringe why they should be happy to pay more for stuff while their wages lag - or worse - they lose their jobs.

And the US can tell this to the other counties and they will obey because?

Good idea.

And the US can tell this to the other counties and they will obey because?

Because the US Administration thinks it is the federal government of the entire world now, rather than just 50 US states?

I don’t think the rest of the world agrees to such a slippery slope and more fool those who make the mistake of doing so. It’s a daft idea that wouldn’t have staying power either. Future US administrations would not stick with such a notion.

2.3 trillion here, 1.9 trillion there, pepper in 650 billion and pretty soon you are talking real money.

They better work to shut out crypto currency, with that option open, the dollar don't look so hot.

The official published corporate tax rate is immaterial. It is a number that has virtually no effect on the amount of taxes US corporations pay. The proportion of US Federal revenues derived from corporate taxes is around 1% and has never in history been more than 2% of Federal revenues.

Rather than a corporate minimum income tax the US should craft a tax on corporations to support the expense of the vast armed forces that protect their ability to conduct global trade.  Such a tax should not be based on net income but rather on the value or some other measure of raw materials and finished goods imported from abroad. The more a corporation imports the more they pay. The rate should be set each year to cover a fixed proportion of the US defense budget, say 1/2 or 2/3 the total cost. The tax would apply to all corporations, foreign and domestic, that operate in the US.