As long as corporate taxes exist, there will be controversy over what is fair, competitive, and how to avoid a “race to the bottom” (“US Goals for a Global Minimum Corporate Tax Rate,” p. 1, April 6). Unfortunately, there is a simple solution: set the rate to zero.
Corporate taxes only support about 10% of federal revenue, a number that could easily be covered by increases in other taxes. Economists are already debating whether companies really pay taxes or just pass them on inefficiently and, yes, unfairly. Clever tricks such as domicile relocations and inversions are relegated to the scrap yard of company history. And if none of that works, deficit spending is all the rage anyway. There is not the slightest claim to budgetary discipline near the capital of our nation.
The Biden government’s call for a global corporate tax rate is an American initiative to suppress economic competition between nations. The bottom line is that it is based on the idea that the people in government are wise and that government structures and bureaucracies are efficient. Who thinks that?