Imposing a minimum global corporate tax has long been a priority of the United States, right to avoid large American multinational corporations from claiming their seat in a low-tax or no-tax haven that costs the Treasury Department billions, maybe trillions. So a win for Treasury Secretary Janet Yellen, who gets the Western G-7 economic powers to agree to a 15% tax floor for these wandering giants. No matter where you are, from New York to London to Frankfurt to Tokyo, you would have to pay.
The minimum tax is one of the two pillars of the plan. The other is to collect taxes where companies operate, rather than just the CEO’s address. Facebook and Apple and Google and Amazon and Microsoft, all with their top bosses who are based on the west coast but do billions of businesses around the world, should make their contribution in these places. This was a goal of Europeans targeting the US tech sector. However, only firms with a profit margin of 10% or more would be liable for it, so some might duck below it.
With all the elbow bumps or handshakes, seven countries are not the whole world. The larger G-20 will take on next, which includes China, a huge trading nation but often a villain worthy of its dictatorial government. Beijing’s undermining of norms and fraud in so many other areas, from tariffs to intellectual property piracy, cannot be tolerated in setting new tax policies.
And for a global tax to work it has to be adopted worldwide, which will take years.
But the concept is correct, because claiming a PO box in Switzerland or a tropical offshore hangout as a legal home base for tax evasion is terribly unfair to those who pay their share without such maneuvers.
Let’s see if anyone tries a moon HQ. Think about it, maybe that’s why Jeff Bezos and Elon Musk are so fixated on space travel.