Global taxation of large corporations: unfair and counterproductive

Global taxation of large corporations: unfair and counterproductive

Comment: The problem of the global tax proposed by the G7 is not just an attack on the big multinationals. Above all, it is the idea that the private sector should pay for the crisis.

Alexander Mosak, associate researcher at the Montreal Economic Institute.

Approved the idea of ​​imposing a minimum tax on large companies led by the G7 and OECD 130 Governments. Even the leaders of some GAFAMs, As Jeff Bezos, Their companies seem to be supportive when they are concerned. of course, Agreement Companies with a turnover of more than 750 million euros are required to pay at least 15% tax in participating countries.

Since this system only affects large multinational companies, one might think that this tax is harmless. However, a more in-depth analysis shows a more hypocritical look. A situation that indicates a worrying trend aimed at victimizing companies.

Governments in rich countries are strengthening their oversight globally

Several aspects show that this agreement was drafted by some rich countries. First of all As mentioned in the plan, “These rules do not apply to public institutions, international organizations, non-profit organizations, pension funds or investment funds.”. Governments and international organizations were careful not to affect the measures they imposed.

In addition, many states with low corporate taxes are often small countries with low GDP: a rate of 12%, like Ireland, 10 years ago, one of the poorest countries in the European Union and able to recover thanks to corporate tax cuts. The same phenomenon with Hungary and its rate is 8%.

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Having an effective tax system was a way for them to attract businesses and grow their economy. Alliance Insurer It estimated that Ireland would lose 2 points of growth and Hungary 1.7 points. By preventing it from falling below the 15% limit, the great forces behind this agreement are punishing other countries.

One wonders if these premieres are the best way to criticize “tax sites”. Do we need to remind you that most of these countries have territories that qualify in this way? The United States is cooperating with Delaware, Andorra with France, the President of the French Republic, China, Macau, Hong Kong or the United Kingdom and several islands under the sovereignty of the crown.

Given the broad freedom of the states to enforce the agreement, there is no doubt that this will be matched by the fact that the above states do not have to pay fines. A deeply unequal agreement that benefits rich countries to hurt others who are poor. Paradoxical to a system presented in the name of justice and fairness.

In many ways, this agreement is a media and political stance that uses multinational corporations as a victim in the face of the economic crisis and rising public spending. However, the underlying rhetoric is vulgar.

The desire to control the private sector is growing

The problem with this global tax is not just an attack on large multinational corporations. Above all, it is the idea that the private sector should pay for the crisis. One of the arguments of those in favor of this tax is to pay the companies that took advantage of the crisis to get rich.

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With the exception of the digital giants, the “physical” businesses are thankful for the restrictions imposed by the government, effectively eliminating most of their competition.

Finally, the idea of ​​raising taxes to get out of the financial crisis should make everyone aware. Of course, this tax will directly affect the big companies, but nothing says that tomorrow the rest of the population will not be affected by the increase or new taxes directly or indirectly.

In addition, corporate tax increases will motivate companies to make up for their losses through low investment and / or low recruitment: two factors, however, are the rapid recovery of the economy.

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