Global Corporate Tax
136 Countries Agree to Implement 15% Global Corporate Tax
The concept of a global corporate tax rate took a major step Friday. 136 countries agreed to implement a minimum 15% global corporate tax.
The tax measure aims to address the lack of stronger tax measures against the largest tech companies. This accord is the result of more than six years of negotiations among members.
RELATED: G7 Nations Agree To 15% Minimum Corporate Tax
Global Corporate Tax Rate Covers Countries Responsible for 90% of World Output
The Organization for Economic Cooperation and Development (OECD) announced the agreement to implement a 15% global corporate tax rate. Specifically, the countries that agreed to the policy accounted for more than 90% of the world’s output.
In addition, countries that famously offered low corporate tax rates such as Ireland, Estonia, and Hungary also signed into the accord. They joined all member countries of the Group of 20 and the OECD.
As a result, US Treasury Secretary Janet Yellen, who spearheaded negotiations, hailed the landmark agreement. “Virtually the entire global economy has decided to end the race to the bottom on corporate taxation.
Rather than competing on our ability to offer low corporate rates, America will now compete on the skills of our workers and our capacity to innovate, which is a race we can win,” she said.
US Congress Needs to Ratify Agreement
In particular, the global corporate tax agreement can potentially serve as the most impactful policy in how nations impose taxes on multinational corporations. It updates the initial agreement signed in July that 130 countries agreed to.
However, individual signatory countries still need the agreement ratified by their respective legislatures. This includes the United States.
Last Sunday, Yellen said she is confident the US Congress won’t say no to the global corporate tax rate agreement. She said that the actions to involve the United States in compliance will likely be part of the reconciliation budget in Congress.
“Yes. I am confident that what we need to do to come into compliance with the minimum tax will be included in a reconciliation package. I hope that we, that it will be passed and we will be able to reassure the world that the United States will do its part,” Yellen said.
Deal Promises ‘Decades of Prosperity’
Once Congress passes the agreement, Yellen said that the global corporate tax rate will deliver “decades of prosperity” to Americans. The multilateral approach in seeking global economic fairness is a paradigm shift made by President Joe Biden.
It contrasts sharply with the previous administration of former President Donald Trump. In fact, the previous White House occupant preferred unilateral trade measures. By rewriting the rules of global taxation, it removes the previous tilt that favors the needs of corporations over communities.
Meanwhile, Yellen says Americans will find their place in the global economy. “The arcane language of today’s agreement belies how simple and sweeping the stakes are: When this deal is enacted, Americans will find the global economy a much easier place to land a job, earn a living or scale a business.
President Biden often talks about a ‘foreign policy for the middle class.’ Today is what foreign policymaking for the middle class looks like in practice.”
Watch the Bloomberg Markets and Finance video reporting that OECD says 136 nations agree to global corporate tax accord:
Do you agree that corporations should pay a minimum global corporate tax rate of 15%? In addition, do you think this measure will help address the problem where corporations move headquarters to countries with lower tax rates?
Tell us what you think of this proposal. Share your comments in the comments section below.
This is just a way for government’s to take more money and waste it on things that benefit them not the people that really need help look at the United State’s all the money this government takes in on taxes still have homeless hunger a deficit out of control open borders politicians can’t do anything correct except give them self raises so they live great while everyone else can’t save money because of taxes and prices of everything rising
This is a very good idea, but it needs to be a FLAT TAX! No more write offs or loopholes that allow large corporation to pay NOTHING in taxes. I say do this, and incorporate a 10% Family Tax Rate, no matter where you “earn” your money. NO write offs, no Tax Forms. Do away with SS, and allow individuals to bank their own money for retirement. If they do not…..OH WELL, work till your dead instead!
If Yellin and Biden are for it, can it be a good thing, or just another money grab?
The 21% US tax rate is Sufficient enough – if other countries want to offer a lower rate to induce movement to their country, it is basically an issue of how capitalism works – it’s all in the “mark up” (tax rate)
Open yer eyes people history shows that corporate tax hikes are ALWAYS passed on to the working class and CEO’s will move their business to countries with a lower corporate tax rate(China)! Which In turn leads to less jobs in the USA !
Capital goes where it’s treated best. Having a minimum international corporate tax rate is just an attempt by the profligate governments of the world to keep capital from fleeing their greedy fingers. The more they tighten their grip, the more money slips through their fingers. Governments don’t produce capital, they consume it. P.S. Tesla moving to Texas from CA is a fine example of capital going somewhere where it’s treated better.
US Corporate tax rate will soon climb to 28% minimum. Now add that 15% to that and see where it will end up. Most countries agree with the idea but getting them to actually pay the tax will be next to impossible. Western countries will be paying everyone’s tax bill.