The Biden-Harris-Yellen administration wants to raise taxes on global taxes and finance its massive public spending program. Opposition by Lorenzo Montanari, vPresident Dell Americans for Tax Reform Foundation
The G20 finance ministers’ meeting in Venice the next day will go down in history as a tax summit. The G20 was unanimously approved Global Minimum Tax 15% prepared by OECD, supported by G7, signed by Ben 130 countries It represents 90% of world GDP. A proposal strongly supported by the Biden administration in the person of Treasury Secretary Janet Yellen Global Minimum Tax The economic potential for a change in Trump’s 2017 tax reform. The Venice Agreement envisages a new economic cartel against tax competition between OPEC or the states. Came into force in 2023 subject to the approval of individual parliaments
Reform plan OECD Contains two so-called Pillars. The first focuses on how states can expand and distribute revenue and taxes across the country to multinational corporations and corporations. Digital companies. This is a pillar that does not take into account the principle of the tax office, which is expected to generate more than $ 100 billion in revenue. The so-called second Pillar Defines guidelines for Global Minimum Tax It will have a minimum limit of 15%. In this case, the annual revenue is expected to exceed $ 150 billion.
The main reason the Biden-Harris-Yellen administration wants Global Minimum Tax The idea is to be able to raise taxes and finance a disproportionate amount of public spending without losing tax revenue from a regime of pure tax competition. Biden has proposed a package of 30 taxes at a cost of $ 2.9 trillion over the next ten years, which will primarily apply to American households and businesses.
One of these 30 taxes is an increase in Trump’s minimum tax on foreign gains (so-called foreign) from property rights. Valid) 10.5 to 21%, and an increase Corporate tax 21% to 28%, which added to the average Corporate tax 32% of any U.S. country ($ 857 billion increase) is above the OECD average of 23% and 25% above Communist China. Correct up to 21% of Corporate tax, The main pillar of Trump’s tax reform in 2107 is that he will go against it Trend Over the past 40 years, there has been a steady decline Corporate tax From around the world a Media In the 1980s it increased by 40% and the current average is 23.85%, or 41% less.
For the Biden-OECD reform to work, it must be approved by all countries, but above all it has the great recognition of the earth. United States, European Union, China. Even if it is accepted for political and diplomatic reasons, no competitive gain will be lost, thanks to the latest reforms approved by the National People’s Congress, the highest Chinese state authority to provide 200 percent tax relief. All costs associated with research and development. This means that 50% of the cost of research and innovation will be borne by the Chinese government, otherwise it will be borne by the companies.
The Biden-OECD reform package is the latest setback for the Niconesian wave, with Biden-Harris returning to the White House with the administration wanting to bury it. Is short Four years Distribute Side Economics Of Trump and his ideological economist Arthur Lafarge. It would be meaningless if the principle of tax competition is not completely abolished from this reform, because countries with small economies cannot impose subsidized taxes to attract foreign investment.
It does not say the final word, as all signatories have to submit to parliamentary approval (except for dictatorships such as China). With Republicans seen as wartime and the Senate split in half, Biden himself will not have an easy life at home, where reform will never pass without a 2/3 vote, a situation that is now impractical. The only positive note was that Yellen had requested the European Union to suspend the implementation of the much-criticized. Digital service tax This could affect US multinationals such as Google, Amazon, Facebook and Microsoft.
For this reason multinational companies have not expressed real opposition Global Minimum Tax. On the contrary, they may even find some competitive advantage at the expense of small businesses. Now the real rivals are Ireland, Estonia and Hungary: all countries with tax rates are below 15 percent. Thanks to the smooth and competitive tax boom in countries that have helped expand domestic economic independence and thus create economic development.
Orban’s Hungary, 9% of it, praises one Corporate tax At the lowest in the union. Without a 12.5% tax rate, Ireland would never be able to lift itself out of poverty and create economic growth. A tax system that has attracted billions of foreign direct investment and transformed Ireland from a country of potato “producers” to a country of microchip manufacturers. Accordingly American Chamber of Commerce In a country of $ 4.5 billion in US direct investment, more than 800 stars and stripe companies have created more than 180,000 jobs.
The Irish opposition is led by current Finance Minister Pascal Donohue, who also holds the position of president of the Eurogroup. We need to find an agreement that guarantees competition and financial sovereignty. According to Donohue, small countries like Ireland “can only compete with the world’s largest economies through competitive taxes, surpassing those of small economies”. Not to mention Estonia l ‘International Tax Competition Index 2020 It measures the financial competitiveness of 34 OECD countries and is considered to be the most competitive country in the world Corporate tax 20% however applies only to the company’s dividend and do not reinvest the profit.
“Economic freedom is a necessary condition for political freedom,” said Luigi Inadi, a former president and liberal economist. Exactly thisAppeal Signed 76 International Liberal Think Tanks including World Taxpayers Association It seeks to respect the financial independence, competition, and financial sovereignty of individual states, which “should be free to make their own tax laws in relation to their local economy, and should not be forced to sell parts of financial sovereignty to groups or institutions. It should not always be in their best interests.”
The G20 in Rome at the end of October will definitely be another great opportunity to reform the discussion Global Minimum Tax, Unfortunately it is not to be questioned, but to be enforced. On the other hand, as Karl Marx reminded us, “there is only one way to kill capitalism – taxes and taxes and more taxes.”
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