Topic: Janet Yellen to call for unified global corporate tax rate (Read 672 times)

If that is true, then I am wrong and sorry for that. The 1 billion per year sale still represents only around 0.5% of his net wealth. And in case the tax is increased, there is a good chance that he will postpone his plans to sell these stocks.

Now another proposal that has been suggested by some of the Pacific Coast Democrats is to tax unrealized capital gains. They say that this will prevent people like Bezos sitting on top of $200 billion worth of stock and still paying zero tax on it. But now comes the important question. Perhaps you are implementing a tax on unrealized capital gains of let's say 4%. Bezos need to pay $8 billion as tax. But there are a lot of people who have unrealized losses. If the government is taxing unrealized gains, then they need to reimburse (a part of) the capital losses as well.

Bezos has given plenty of shares to his ex wife (not by choice) and also sells stock every year to fund Blue Origin, his rocket company, to the tune of 1 billion a year.

Stocks go up but bond yields don't, US pensioners usually rely on bonds not stocks.

The majority of the stock market is owned by pension funds and mutual funds and therefore any decline in the stock prices will disproportionately impact the pensioners and the middle class. Obviously billionaires own a large share of the stocks, but they hardly sell them in unfavorable circumstances (so there is no question of capital gains tax). For example, Jeff Bezos own around 10% of the Amazon shares and he hasn't sold any of his stocks for the last two decades. They can afford to wait, until a Republican president is elected to power. But the middle class and pensioners can't afford to wait more than 4-5 years.

Each country acts by virtue of its own principles and its own capabilities, and if the capabilities and principles allow, then it is possible to reduce the corporate tax. Another question is that the current multinational corporations are a very complex phenomenon and a simple reduction in corporate tax does not mean the transfer of the parent corporation to your jurisdiction along with all the staff. The question is very complex and ambiguous, because let's say the same Facebook just opens a nominal office with a minimum of staff for the sake of paying taxes, and the main activity will still be conducted in a convenient country.

Sithara007 : first of all this new corporate tax rate is only for people earning more than 1 million dollars a year. Granted, these people are the ones who own the majority of the stock market, but that's precisely a problem they also want to fix. You can't look at the stock market going up and up and up and conclude the economy is doing great, if most people don't benefit at all from that rise.

Considering what Biden wants to pay with the money raised, it's possible a state like California could end up lowering its own tax, since the federal government would now pay for things that California used to spend money on.

Some countries will always have a lower corporate tax just to get companies interested, not everyone is USA and have enough money to print trillions of dollars worth of money and end up being in the profit anyway, so many nations drop the corporate tax to minimum, even zero at times to attract money from other places. Hell if I had Facebook in my nation, I would charge them zero money for being here, even help them pay for some stuff, why? Because that would mean there would be a company worth hundreds of billions of dollars in my nation and that profit comes into my nation from outside, and they are hiring tens of thousands of workers, and they are getting headquarters, basically there are tons of things I can list that the nation would benefit from.

Long story short corporate tax can never be the same in every nation, some poor nations will try to attract rich companies one way or another.

The thing is Janet Yallen is bought by companies as much as any politician, however Biden administration has provided time and time again the fact that they are moving a bit more further left, there is nothing else to do but to charge companies a bit more tax otherwise regular folk will not even have money to keep those companies alive anymore. You think amazon could continue operations perfectly making tens of billions of dollars forever?

If things are not looking good for regular folk that means they will stop buying stuff from Amazon as well, which means profits down for them, this is just an example for one company, it is true for all the companies in the nation. Politicians from both parties are still bought by companies, but the world can't continue to operate like this for a long time, it is just not possible and that is why things are moving with higher taxes nowadays.

For the governments, it is a very difficult decision to make. Here in India, the corporate taxes used to be around 35%-40% a few years ago. After the right-wing government came to power, it was reduced to 25%. Obviously this resulted in a lot of companies shifting their manufacturing units from China to India and the creation of a large number of employment opportunities. But still, reducing corporate tax alone is not enough. Foreign investors claim that the issue of corruption/red-tape is much worse in India when compared to the situation in China.

The reason for banning corporate rates is that it is difficult to attract investment if corporate rates are high. Entrepreneurs in this country have to pay a large part of their income as tax however the rate at which middle-income countries have reduced corporate taxes over the past three decades has made it easier to do business but here corporate tax is used to increase revenue. So even though there is talk of reducing corporate taxes before the budget every year the national board of revenue backs down every time.

The latest proposal from Biden is to rise the long-term capital gains tax and make it on par with the income tax. And someone has already pointed out that if this stupid plan is implemented, then in some of the cities those who fall in the top-slab will be paying close to 60% of their capital gains as tax.

https://twitter.com/JaredWalczak/status/1385315212081963010

Now what is going to be the next demand? I guess Yellen will ask for a unified global capital gains tax as well? In most of the sane countries, capital gains tax are in the 10%-20% range. Here in India, it ranges from 0% to 10%. I know a lot of people want to make capital gains tax on par with income tax. IMO, it is never practical, because if the government want to do that then they should reimburse the capital losses (the option of carrying forward the losses is useless).  

That's impossible, a politician that isn't lobbied by corporations so they can continue to exploit the working class. I don't think that companies are going to like the idea of moving out of a country because of the tax laws in place, getting out of that country is going to hurt them real bad.

Google and Facebook are banned in China, as the local competitors (Baidu and WeChat) have a complete monopoly. As far as I know, Amazon isn't blocked in China, but they geo-restricts users from that country. So here you are right. But China remains one of the largest markets for Apple (and one of the fastest growing markets as well). And it won't be fair to ask Apple to pay taxes in US, for their revenues in China. And let's not forget that most of the components for the manufacturing of iPhone, iPad.etc comes from the Chinese manufacturing units. 

Theses companies (Amazon, Google, Facebook, etc.) are already banned from China, so that wouldn't change much for them. There is Apple, but they can afford to pay the tax.

Indeed, the risk is very clear if the US is so strict in this tax policy, the risk is a warm opportunity for competing countries, especially China, which is indeed a trade rival for the US.  This should be very concerned about, because during Biden's leadership several policies focused directly on taxes.  The rich tax even the corporate tax.  This is a policy that has been stalled for a long time but has only just been executed.

LOL.. I don't think that the American government would be stupid enough to take such a step. For many of the American companies, a large part of the revenue comes from global markets. If they are not allowed in the global markets, then Chinese or Japanese companies will fill the vacuum. No one is having any issue with the American government taxing American companies. The problem arises when the American government want to dictate how foreign governments tax foreign companies.

What Yellen is mainly concerned about is that US companies pay their fair share of tax. If some countries don't implement the minimum corporate tax, it's not a problem, the US can declare that no US company has the right to have a presence in such a country.

It every possible for a number one country to find a solution for all the G20 and it will hard for any the countries in the G20 to disagree if 18-19 have already agreed to the new bill. As you said the best opinion is to simplify the tax law which I think is what they will all later arranged on.

To be fair, Janet Yellen sounds too grumpy and frustrated. Ever since taking office, she has made two statements which make no sense. First one related to "controlling" cryptocurrency and the second one demanding a global minimum level of corporate tax. Both the suggestions can't be implemented in reality. Former president Trump sounded insane at times, and was widely ridiculed by the media. But he kept these lunatic people out of office for four years and I need to give him credit for that.

You guys have to remember, these are people who are in for regulations and they like it, that is why they are trying to put regulations on crypto, but there is no ban, there will never be a ban, look at Coinbase, they had their IPO just recently, you think there could be a ban on that?

Bitcoin will always be free and legal in USA, there will be stricter laws to purchase or use it that is for sure, but KYC is for that exact reason as well, which means at the very worst case Janet will do something that will add one more picture to KYC, or another document, like maybe required social security number or something, in order to prevent it, and everyone who uses coinbase (or similar places) to be sharing their information to a super high level, and all of their movements will be tracked by coinbase and notified to SEC or some place I suppose (could be IRS, or different) and that is understandable because they want the same for everything, so not a shock they would want that for BTC.

Dude, you have no idea what you are talking about. If that is the case, then let me ask you what do the United States bring to the world, apart from invading and bombing third world nations? Since they spent $1 trillion to bomb Afghanistan, $2 trillion plus to bomb Iraq, and an unknown amount to bomb Syria, what is the guarantee that this increased tax revenue won't be used to bomb some third world nation? And since when the Nobel Peace Prize (which was given to politicians like Barack Obama and Al Gore) became a measurement to productive contribution? The question is not about Nobel Peace Prize, but about the corporate tax.

What do Bahrain, Qatar or Kuwait bring to the world ? Do they make Nobel peace prize scientists ? Do they advance peace ? Do they even treat people living in these countries well ?

These countries can't exist and can't function without real countries doing the real work. Hence, freeloaders.

Mauser : of course money knows borders. If things escalate, money can stop flowing. It didn't flow that well until the 80's. Plenty of countries today have capital controls, ban foreign ownership of companies and real estate, etc.

Even if all the G20 nations agree on a uniform tax rate, it will not resolve the issue. Currently there are 193 nations that have United Nations membership. On top of this, we have dozens of unrecognized countries and territories which have their own tax structure. The US have no right to decide on the tax structure of foreign countries. If they are unable to compete with the other countries, then they should cancel their membership to the World Trade Organization (WTO) and ban the imports of foreign produce to their territory. The demand that other countries should adjust their tax structure with the US is laughable at the best. And let's not forget the fact that the demand came after US increased the tax rate from 21% to 28%. Previously they had no issue with this. Yellen is wrong if she thinks that the other countries will dance to her whims and fancies.

I don't think it's possible to find a solution for all the G20, even if 18 or 19 countries agree then there are a lot of advantages for one country to disagree. Money doesn't know borders and will always relocate to the most attractive countries. There are so many loopholes in tax laws which is why the big tax consultantancies are making so much money. In my opinion the best approach would be to simplify the tax laws tremendously. But this seems utopic at the moment.

President Trump makes a wonderful decision by reducing the corporate tax to 21% and in the season when the pandemic has caused alot of damage there's a need for an increase of corporate tax but the 28% seems too big and I think 25% will still be fair.

I don't understand the rules and regulations the G20 nation use to operate but countries like Puerto Rico will suffer if they comply with the plan to increase global corporate tax and I don't think it will fair to them if they are forced to comply.

LOL.. this is one of the funniest posts I ever saw in the Economics section of this forum. Dude.. this is a free world. People and companies are free to move anywhere of their liking. There are countries in the world where there is no corporate tax or income tax. I am talking about countries such as Bahrain, Qatar and Kuwait. And countries such as Qatar are among the richest countries in the world, and they don't really need to attract anyone. Once again, crying about your tax revenue going down is not going to help. On one hand, you elect socialists such as Kamala Harris and Janet Yellen to power and then you complain that the companies are moving out.

First of all a country should have companies that serve the population and other companies of that country. International competition comes later and shouldn't be a major part of any economy. If a country lives from attracting foreign companies, that country is a freeloader, making tax revenue go down everywhere. To the benefit of very few people.

I read a few days back that the American intervention in Afghanistan cost the tax payers more than $1 trillion. And a few years back, it was being said that the bill for Iraq intervention has passed $2 trillion level (now it must be even higher). And then there are additional bills to be paid from countries such as Libya, Syria and Kosovo. Without all these foreign interventions, I assume that the American federal debt would have been at least 50% lower. But then it would be bad for private corporations such as Raytheon and Boeing, whose revenues depend on these military interventions.

The problem is not democrat party or republican party, that has been established long time ago, it is known for the past 30 years, USA is a nation with "2" parties but the reality is that they are basically the same and nothing changes. Why? Because both of them use the tax income wrongfully and they do not use it directly helping the people. Look at the military budget, Bush increased it, then Obama got elected and increased it, then Trump got elected and increased it, then Biden got elected and increased it, now it is nearly getting to 800 billion dollars a year, do you know what you can do with that?

You can solve almost every problem in all of USA if you used that directly helping to people, it would seriously be enough to cover half of all universal health care and also if you cap pharma companies charging idiotic prices that would be enough to cover every single person who got sick, from flu to end level cancer. This is not democratic or republican, it is problem with politicians.

Agreed. Although I don't think that individuals in large numbers will move from one country to another due to high tax rates, in the long term it will only make the employees unproductive. Also, before Yellen talks about a unified global tax rate, she should look towards unifying income tax within the United States. Because it differs from state to state. In states like California, the combined state+federal income tax is >50% for the top most group, while in Republican states such as Texas and Wyoming, it is 37%.

And the irony is that California is bankrupt, due to incompetent and corrupt handling of the tax revenue, while TX is in a relatively better position.

https://www.paloaltoonline.com/news/2020/05/10/california-just-revealed-a-543-billion-deficit--signaling-deep-cuts-ahead

How to unify corporate tax globally. Each country has an economic structure, a different economic environment, the application of corporate tax affects other issues in the overall national policy. Not to mention that each country has different geographical locations, so the tax rates between countries must be different to ensure that countries have competition in attracting businesses.

It will never happen. Only chance for her to make it happen is to send tanks enforce it. Countries will keep compete with taxes as they do right now. That is how capitalism work.  Let her rather call fro unified demolishing of all nuclear weapons. It would have the same result.

While I think that a global corporate tax is a good idea, because it's fairer and will prevent companies from doing business in other countries, where it's cheaper, I doubt that many will agree to that. Like you said, it's an economical advantage for them, why should they lose this opportunity, so that the US can make more money? I fear that Biden's decision to impose higher taxes may turn out bad and scare away corporations. 

100% this.  If the economy is in a bad shape, it's because the wealthiest people are sitting on more money than they could spend in a lifetime.  The money doesn't flow.  Those who would spend their money back into the economy (assuming they had any) barely have enough to live on.  Many people can hardly afford the bare essentials, let alone any luxuries they might crave.  I live in a nation that is supposedly a first world country, but they fudge the employment figures with zero-hour contracts.  People aren't really working to the extent the government like to pretend they are, but everyone plays along for reasons I still can't fathom.  Then they pretend inflation is only a few percent, but they conveniently ignore half the things people need to buy in order to live because, if they include those things, inflation would be a number that makes the government look as though they're handling the economy poorly.  Obviously we can't have that, so fudge those numbers too.  All the while, they're doing deals to sell public assets, to private companies (which they just so happen to have a connection with) and pocket the difference.  All in the name of capitalism.  Except it isn't anything remotely like capitalism anymore.  It's just corruption and thievery.  A crime syndicate in all but name.  

But yes, all the brainwashed people in this topic can keep bleating about a tax increase that's still lower overall than what many other nations already have.  Hell, back in the '80s, most places had a ~40% corporate tax.  I'm sure all these prognostications of mass corporate exodus are a little far-fetched if the US raise it to 28%.  

There are more rich people than ever, and they're richer than ever, new billionaires every day, but taxes are too high ? Are you using some drug when writing this ?

You are talking about the Laffer curve, the concept is accepted as true but economists are always arguing about what is its actual shape, governments seem to think that they can push taxes higher and higher and that they are going to get more revenue, but as you said it comes to a point in which people begin to think about whether it is worth for them to keep working so hard when they are getting so little out of it, in that case it is better to do something else that you enjoy and not work as hard, very high taxes like the ones we are seeing today are one of the reasons why the economy is in such a bad shape.

May not be easy. But definitely not impossible. Why do you think that reptilian overlord Yellen made such a statement? Being one of the most authoritarian individuals in the US government right now, if it was possible then she would have prohibited the companies from using this loophole. But it is not practical. The world is becoming smaller and smaller and the companies are finding it easier to relocate. Now it is up to the regimes to attract them by lowering the tax rate.

It isn't that easy to move your base of operations,that is why they are doing this because they know that it will be difficult for companies to get out and the only way that they can prevent this kind of thing from happening is when they lobby the Senators and the right people to protect their interest.

This doesn't make sense to me at all, I mean if you are actually rising it to a level where corporations are leaving the nation, then charge them even more if they ever want to work with USA people, simple as that. Let's say you start to charge Google a lot more money, and then they decide to relocate to Ireland, if google ever wants to make money from USA citizens, they will have to pay 50% for all the USA based income, simple as that.

If you do that, you are going to either collect more taxes that way, or they will decide not to leave and you get your raise without them leaving. These companies relocate to other nations a lot and they get away with it because they are based on other nations, a very high foreign company policy would solve all of these problems but unfortunately politicians gets bribed and that notion gets deleted right away.

Here in India, the top most slab (43%) kicks in if you earn more than $665,000. But very few people will come under that category. And here only around 2% of the population pays any income tax. Agricultural income is exempt from income tax, and more than half of the population is consisted of farmers. Those who earn less than $6,700 per year don't have to pay any income tax (that amounts to more than 90% of the population). If you take a home loan and go for 80C and reimbursements, then you can avoid income tax even if you earn around $12,000 per year. 

Actually, if talking only about money, a person's motivation for life is a relative reason and even he is not the only one like that.  There are many people who don't use their idle time as lazy and unproductive time.  Likewise those of you who fill your time with a lot of positive things even though they don't make money, and this is also not wrong.  I see both sides that cannot be blamed on each other.  It goes back to their respective choices.  But here the problem is that taxes are so high that people become demotivated to earn more.  The higher the income, the higher the tax issued.  Even though people have worked very hard to produce that high income.  The government with its various agendas regulates unilateral policies on behalf of government programs.  And the most annoying thing is that even the matters of private assets become interference by the government.  This is the weakness of a centralized economy.

Why do you equate time not spent getting paid with being "unproductive"?  There are plenty of worthwhile things you can do with your time that don't involve making yourself financially wealthier.  Is money really the only thing you care about?  Are there no other motivations to spur you on?  Consider re-evaluating what's actually important to you.  For some people, time is the far more valuable commodity.  Imagine what you could do with all that extra time.

Also, I'm not sure what you were trying to achieve with that example.  It's difficult to feel sympathy for someone who can earn $200,000 working just 20 hours a week and acts like they're somehow in a difficult position.  Maybe stop pretending you're going to win sob-story of the year with that one, yeah?

In cities such as Los Angeles and San Francisco, 200K is not a big amount (that's what they get after the tax cut). And earning 400K in a city such as LA or SF can be much different from earning the same amount in a smaller and more affordable city such as Omaha or Memphis. If you further increase the taxes to 70% or 80%, then what is the point in working so hard? Instead of working for 40 hours a week and earning $400,000, I can opt to work for 20 hours a week and earn $200,000. These sort of insane taxes will only encourage unproductive activity.

At 400K in the US you're in the top 2%, close to the 1%. That's not middle class.

As usual, Democrats resorting to outright lying. Not a surprise, really.

First of all, the proposal was not to increase income tax for those who earn more than $10 million per year. The proposal was to increase income tax for anyone who earn more than $400,000 per year.

https://www.bloomberg.com/news/articles/2021-03-15/biden-eyes-first-major-tax-hike-since-1993-in-next-economic-plan

A couple of years back, I would have asked you whether you don't have any shame. But now I understand that this is one of the basic traits for Democrat supporters.

Now I will tell you why this is a bad idea. If you are living in the state of California, there is an additional state income tax (up to 13.3%). The top most slab of federal income tax stands at 37%. So even now, upper middle class is paying upwards of 50% as income tax. Obviously Democrats would like to increase it further. So on paper, you may be earning $400,000. And in reality you will receive half of that amount in your bank account.

Raising taxes for the rich is a popular speech for those that are ignorant about how the economy really works, the rich are going to do everything that they can to avoid paying taxes and personally I do not judge them for that because I know that if I had that kind of power I will do the same, so most of the time when governments say something like this it is nothing more but a PR campaign to try to keep the people happy about the taxes that now they will have to pay thinking that the rich are paying even more when that is not true.

Many people here seem to think a race to the bottom is a good thing. For people who live in developed countries, with good salaries, etc., higher taxes come with it. It's part of why living there is good, and poor people dream of living in these rich countries. Not many people leave these countries to live in poor countries to get low taxes !

What Yellen is saying is only for developed countries, poor countries will be left alone, don't worry.

Of course some tax paradises are in the crosshairs.

You do not have to be republican, all you have to be is a person who hates left and you would be supporting republicans in USA, that's all it takes. How do I know you are a person who hates leftists in anywhere in the world? Simple, you say that Democrats are increasing taxes left right and center, whereas they have not increased taxes yet and only proposition was to increase taxes on people who earn over 10 million dollars a year.

Do you think that's bad? In a world where economy is horrible because of pandemic, increasing taxes for people who profit more than 10 million dollars should not pay a bit more taxes?

Any person who sees "tax increase" and think that leftists are ruining economy are the reason why we do not have a proper world. We have 300+ million people who are making under 200k dollars a year, and over half of that makes less than 70k per year, and all we need is people with 10+ million profits per year to pay a bit more taxes so we can make the world better place for everyone, why is that so bad?

I am not an American, but still I would say that Republicans are much better for the economy than the Democrats. How can you claim that Democrats are in favor of economic growth, when they are increasing taxes left, right and the center? All they have done ever since they came to power is to distribute some $400 billion in cash mostly to individuals who don't need them and to spend another $1.5 trillion to failed cities and unions. If this is your idea for economic growth, then I would disagree. Public services were fully functioning when Trump was the president, and for that he didn't raised the tax levels.

Whites belong to the Republic, but do you realize they are currently in opposition to the policies of the elected president.  Republican party members also considered Biden's infrastructure development plans too expensive, rushed and lacked proper planning.  They do not support this policy at all. Even the Democrats will carry out this law with their own party without the support of the Republic.  As was the case before, Biden's policy of pouring tens of thousands of trillions of USD was just for the pandemic.  It seems much better for a president whose tweet is unstable than a president with policies that are burdensome to society.

So we're back to the "Republicans are always good for the economy" trope?  If it isn't already absurd enough that nations chase perpetual economic growth, surely it's even more absurd when they think they can achieve that by cutting their way to growth?  I'll never understand republicans/conservatives.  They don't want to pay for public services, but they still expect them to not only function, but function well.  It's truly baffling.   

Social media platforms were up in arms against Trump, and a lot of suburban voters got swayed by the campaign from corporations such as Twitter, Google and FaceBook. So the choice was between a president who is not liked by the social media and in favor of low taxes, and someone who is the darling of social media and in favor of high taxes. The American voters made their choice and I congratulate them. I hope they are now happy with the tweets that are coming out of the official POTUS handle. Obviously that is a higher priority when compared to taxes, employment and economic growth.

This has made the news, but it is even more interesting the fact that Jeff Bezos, one of the persons who could benefit the most from financial structures around the world, has actually stated that he supports the proposal. Since people rarely want to give away in taxes more money this leads me to think that either he is sure this is simply not happening or that he knows how to avoid it anyway.

Anyway this is not going to happen. Even Delaware, which is actually the home state for Biden himself, is at all effects a tax haven.

White people always vote republican, and they didn't vote for Trump last election cycle. He lost white suburban moms because his twitter use was unstable. I don't think many people were worried about tax increases when they shifted their vote from Trump to Biden. All they wanted was normalcy, aka a guy without a compulsive twitter addiction.

Yup.

We don't live in la-la land. From a pragmatic standpoint anyway, does Yellen really think that jawboning alone would work on foreign countries in which affording TNCs an attractive tax rate is the only source of government income?

Be realistic here. If talent and capital retention is the name of the game, then the U.S. Treasury and Fed have to do something proactively. Jawboning and asking other  is neither morally right nor practically doable.

What I do know is :
It is completely unreasonable to increase the tax rates during pandemic. What is their thinking ? They do want to increase the tax of the people who have lost their jobs and if they think this would help their country to prosper this is very wrong. What they can do is , to increase the tax rates of a particular section of the society. The people who are very well off and more like the bulls of the economy they should be the one's paying these unreasonable taxes if the situation is so dire. First the Government of the US is taking loads of money from other countries, then they expect to pay it using people without jobs ? How about the Government finally tries to understand the situation of unemployment.

Honestly I did not expect this from Biden.. "Unified Global Tax Rate" is honestly so stupid. This would not work and also their application would be even more harder to do in practical rather in papers.

A little quote from a website :

https://news.bloombergtax.com/daily-tax-report/the-corporate-tax-revolution-is-coming-are-we-ready

But what is quite surprising about this policy is the support of the world's richest man Jeff Bezos for tax increases. Even though in 2016, this issue had developed, but Bezos opposed the policy and was a little hostile to Biden at this time. I'm a little surprised why now Bezos even fully supports this too forced plan? Is Bezos' support just a subtle hint at Biden for his pretty tense past regarding Amazon's corporate taxes?

It does make sense to have a minimum corporation tax enforced across all countries because the super rich are basically taking advantage of every single hard working person when they move their money around. There are so many legally acceptable but morally fraudulent schemes going around that ends up in them paying tiny amounts of tax in many cases. For example creating a company in a zero tax country and using that to charge a "brand usage" fee to companies in countries where they actually make all their income, in effect making all profits disappear through some lame scheme that only exists to benefit the few. The rich get to take advantage of well functioning societies while paying almost nothing back into them and it is a form of abuse, a minimum tax rate would go a long way to stopping it by making tax havens largely redundant.

Global tax and the receiving end would be the bitch alone? This give whore a new meaning.

This is exactly why the white working class voted en masse for Trump, despite his immaturity with some of the issues. They understood that Biden as the president could destroy their jobs. And Biden and his team has not disappointed us. As soon as he took charge as the POTUS, he started increasing taxes. The Republicans are facing a big dilemma now. In the states ruled by them, they have decreased the taxes and thereby created lot of new jobs. I am talking about states such as Texas, Georgia and Florida. But this job creation in turn attracts the jobless Democrat supporters from broke states such as California and New York, and eventually makes these states Democrat leaning. This is exactly what happened in states such as Arizona and Georgia during the 2020 elections.

I also see that, some of Biden's policies seem too hasty without visionary thinking.  To be honest about this tax, it will definitely be burdensome for many entrepreneurs in the USA and good news for its rival countries.  As long as Trump became president he continued to carry out policies until a trade war broke out.  China is the country that has benefited the most from this.  The Chinese businessmen are subsidized by the government, while the USA instead burdens them with taxes.  In the midst of this pandemic, not many relaxation policies for financial ones have been exacerbated by Biden's policy in the name of building infrastructure.  Is this what all the people expect from the elected president?

The rich never pay their tax, because most of their income is in the form of assets that are stored in off-shore tax havens and capital gains. And capital assets are taxed only if they are sold. There is no tax applicable on unrealized capital gains. All these tax increases will have the maximum impact on the middle class, especially those living in high-tax states such as California and New York. The same with corporate tax as well. If they increase the corporate tax, then the companies will move out to Mexico and other low-tax countries and American products will be unable to compete against Chinese products. Also, middle-class and poor Americans will lose their jobs, as the factories close down.

Those who think that the taxes are going to be paid by the rich, when in reality the middle and working classes bear the brunt of the tax burden. Yelen must be desperate. She knows that tax hikes often result in lower revenues, which is why she is making this move. Basically, what they want to do is to continue squandering money and not have any consequences, but they cannot.

Trump is not weird, he was smart actually, his term were focused on taking care of laws that will protect his businesses and its interest and making sure that opposition is going to have a hard time. You don't have to worry about China because they are part of the G20 and right now, Chinese labor is getting expensive, have you heard that Apple is slowly moving towards India.

I don't know what sort of people vote for a party that promises to increase the taxes. And look at the people who are supporting this move. Amazon has evaded taxes for long, using various loopholes. They have welcomed the rise in corporate tax (fully knowing that they will be able to evade paying most of it once again). Those corporations which are honestly paying their taxes such as Tesla have reacted negatively to this news. 

This is called tax harmonization and it has been the dream of US policy makers for decades, but it is never going to happen, countries are not going to go against their own self-interests just because the US wants this to happen, many countries depend on low or no taxes to bring capital to their countries and they are not going to let go of their main form of income just for the US government to be happy, so they will fail on their mission and many businesses are going to leave the US as they are not going to tolerate to pay more taxes especially after a pandemic left them in a difficult economical position.

I don't think even Janet Yellen herself is sure that other countries will support her call. It's just that campaign promises were made to raise corporate taxes if a representative of the Democratic Party wins, and now it's time to show the voters that the work on fulfilling the promises is underway. There is information that the proposed increase in the tax rate can be withdrawn from individual states, which with their reduced rates would not mind attracting corporations to their territory.

This makes that call invalid from inception already. Every country is peculiar and their financial strength are not the same. You can't compare the developed nations to the less developed where the government is corrupt and taxes are even evaded. A unified tax system is not visible because I don't is the proper call now, that is not what the world needs. The world needs good government, economy, employment, low inflation rate, good condition of life and not unified tax structure.

I agree, it's just not feasible to create a global unified tax scheme at the moment. Countries are just to different. Sure the USA is hurting when their companies keep money overseas but there is no real alternative at the moment. I would never expect small countries to change their tax laws to help USA. For example Ireland, a very small country that has no real exports. There is no chance this country could survive on its own. They need their low tax rates so companies stay in Dublin. One address is the home to 10,000+ companies, most of them just shell companies. But still,its very important for these small countries.

I'm not sure if this proposal was part of the promise of the new American president, but I think it's just ordinary populism that could very easily end up as a proposal to increase the minimum working hour to $15, which I don't think has passed. Even if this proposal is accepted by all G20 members, companies will find a way out and outwit the system again, no matter how it was set up.

It seems to me that the US wants to create an awkward situation for itself, and for all G20 members - as you say, there are 170+ more destinations that will be very happy to provide shelter for more favorable taxes.

You can not call for a global unified corporate tax rate when you are not fully aware of the economic state of other countries,  there are many countries who's economic are in a bad state and needs the support of advanced countries like the USA for continuous survival, how do you tell such countries to increase tax rate from 21% to 28%, maybe with the 21% tax most companies already producing at loss, some must have fold up and seek better alternatives elsewhere,
I don't see many countries accepting this call, otherwise that will mean a deliberate economic self destruction. The earlier they forfeit this ridiculous idea the better for everyone.

Completely agreed. Janet Yellen seems to have lost her mental balance and that may be the reason why she is making such absurd statements. Take this - the American government increases the corporate tax in their jurisdiction from 21% to 28% and then orders the other countries to do the same. What do they think they are? The days of colonialism are over, and the other countries don't need to listen to deranged people like Yellen. If the regime is worried that more and more companies may move abroad due to high taxes, then they need to decrease them. On the other hand they have gone for a tax increase when the companies are getting whacked by the pandemic and the biggest tax evader (Jeff Bezos) is supporting the move.

It does make sense, but not in the way that Yellen envisions it.

It is the US and other advanced economies who needs to lower their corporate tax rates in order to converge with the rest of the world. Their cost of doing business is simply too high for any major startups to launch there. Unfortunately the pool of talent in the U.S. means that they can get away with charging these high corporate tax rates, but I suspect not for long until major firms start moving offshore too (already happened with a bunch of them).

Instead of blaming the competition, how about reflecting internally for once and adjusting your policy accordingly?

I believe this is founded upon a wrong premise. There is something terribly wrong with this. There is no race to the bottom among countries here. There is only a race to the bottom between the US and time.

If I may interpret this, I would say the US, more than the rest, is now being seriously threatened that other countries have more to offer in terms of corporate tax incentives and benefits that huge companies are enticed to let go of the US and start operating somewhere overseas.

To me, this is an attempt of the US to stifle global competition between countries at least as far as corporate tax rates are concerned. Why should other countries, especially the much poorer ones, fall for this trap when, in the first place, they are setting low corporate tax rates in order to attract foreign investors?


Last I heard Puerto Rico is still part of the United States.

getting g20 countries to apply a unified corporation tax rate wont change anything

the companies will just have a HQ in one of the other 170 countries
yes they will operate in america and G20 countries but run them as franchises where their 'profit' gets transported to the non G20 countries as 'management fee's'.. thus have no 'profit' within the G20 and thus no corporation tax to pay

its how companies do it already and nothing will change

what needs to happen is to actually do a proper sales tax. where companies have to hand over tax from the sales they make within the country before its syphoned off or diluted by 'hidden costs'

UK has a sales tax(VAT) of 20% .. US has under 8% sales tax.. and thats where the treasury deficit is being hit the most

raising corporation tax solves nothing due to all the tax loopholes
biden should raise the sales tax

and no its not going to cause a large change in product sales prices. as corporations should be paying 20%+ anyway.. but this way they have to pay it. and not be able to syphon/dilute their tax bill using loopholes

Too entitled to propose these types of ideas. I think the best thing to make the economy great again is to enhance financing with better rates, not to increase tax. I find it stupid to increase corporate tax alone, of course making all countries calibrated is much worst. I don’t think this will work.

I highly understand that corporations might be earning more, but the stress, time, and risk they take are somehow different from normal people. If that’s the case, they would choose to be a normal person instead of giving the best out of their businesses.

Yellen seems to have lost her sanity, which is not very surprising given her advanced age. Biden should be careful in selecting these 70 plus and 80 plus people for key posts, as they may not be having mental capability to make important decisions. The demand that other nations should also raise the corporate tax is not just ridiculous, but laughable as well. Why should foreign nations align their tax rates with that of the United States?

Lots of people seem to be stating the obvious here.  Clearly it's not realistic to think that every country will play along.  But think it through.  If the US is going ahead with their own increase regardless, then there are literally no downsides in attempting to convince other countries to do it too.  Every nation that does raise theirs is a bonus.

I swear most of the participants in the thread are simply venting because they despise Biden/Yellen or progressive policies in general.  You can argue the pros and cons of the tax rate itself, but you can't dispute the distinct lack of negatives if they can reach an agreement and work with other countries.

USA cannot influence any country in the world to raise it's corporate tax.This is ridiculous.
I want the major corporations to pay higher taxes,but a global minimum corporate tax isn't the solution.
USA must remove all the "hidden doors" in the tax legislation,so all the big companies should stop legally avoiding tax payments.This would be a way better policy,rather than trying to raise the corporate tax or trying to convince other countries to raise their taxes.

Yes, exactly. There is zero chance of getting an international consensus on this... beyond setting the 'minimum' at some absurdly low level that is absolutely meaningless.
Countries are terrified of a flight of capital if they increase their taxes... this is I believe a myth perpetuated by those companies and individuals that would be affected. "Don't tax us, or we'll leave!" is an empty threat.

This is when they know the limit of the jurisdictions they have in every country, they think they can just dictate something and everyone will follow. And what would they now do if other country doesn't care about this? 

Other countries are purposely making the taxes low to attract investors and making companies establish in their country. China is just one of them. I don't think China will take part in this.

It's his move by the sounds of it.



But every company can already do that, though.  There's a larger incentive for them to do it while other places have lower tax.  If anything, it helps the US if other nations raise their corporation tax.

That's a deadly move and could prove very costly for US. The rate of taxes are different in different countries and that's why many countries choose to open their offices in developing countries like India, China or Philippines. Because where the labor is cheap, companies won't mind paying a little extra corporate taxes to the government. Now if the US government calls for a unified corporate tax rate across the world and if all countries agree to do that, that will be the end of industrialization in US. Every company then inevitably, move to the developing countries like India, China, Philippines or even South Africa because they can enjoy cheap labor (1/4th or even 1/5th of US) and same corporate tax. That will help the companies to save more money and increase their profitability. Us companies will probably have a small office in US as a registered office but the majority of their workforce will work from the developing countries. I am sure Biden will not approve of such move if he is intelligent enough.

The United States of America is a world power country, but even at that, it's not possible for them to influence other countries to follow their tax policy, every country fixes their tax rate for their best interest, thus if the U.S. feels an increase from 21% to 28% is for the best, then they should go ahead with it alone; Yellen and Biden are only seeking a "united global corporate tax rate" cause they know it's a bad policy, and that if it's taken by only the United States, it'll hurt them and play into the hands of (favor) other countries.

Having said that, they can only manage to get a few of their allies to go along with this policy, but if they are envisaging it on a 'global' scale, then it's not possible, that's even the more reason I think they'll forfeit this tax increase, or else, their competitors in the global economics that would definitely not follow this policy (like China) could allure businesses away from the U.S. and in years to come overtake them as the country with the best economy.

No one really cares about the walking fossil Janet Yellen and her stupid ideas. A few weeks earlier, she wanted the government to "curtail" cryptocurrency. Once again, no one took her seriously. The idea of dictating other countries on their tax rates is quite stupid. There are countries such as the UAE and Bahamas where the corporate tax rate is 0%. These countries don't want to increase the tax rate, as the companies will have no reason to set up their offices there if they do that.

I guess Yellen is in a state of panic. She realizes that the proposal to increase corporate tax from 21% to 28% is going to do a lot of damage. She wants to limit that by forcing everyone else to raise their taxes. But sadly for her, things don't work like that in global economy.

Trump is a very weird person and made some bad decisions, but here we see how much good he made reducing taxes...

I think any "unified global tax rate"  would be terrible, and specially good for China. They will not follow those rules and will get benefits from it.

Those global pacts usually also hurt the sovereignty of the countries, which won't be able to attract companies when they need to create more jobs, neither get more money from taxes when they need...

My 2 cents, I think the less rules, the better. Governments world wide already make so many rules, we don't need a "central government" with more rules to all of them.

....


In preparation for the Biden's administration planned hike of the US corporate tax from 21% to 28%. Janet Yellen will propose G20 nations coordinate to legislate a global corporate tax rate to prevent amazon and others from moving operations from the USA to other nations with lower corporate taxes.

This conflict is a macrocosm of current events. Where Elon Musk and tesla fled high taxation california for low taxation texas. States like new york and california have hemorrhaged a steady outflux of residents and business to states with lower taxes like florida over the last few years.

There is a question of whether countries like puerto rico would support a planned global corporate tax. Many nations could stand to lose significantly if they were forced to raise corporate taxes. Low corporate taxes are how some countries attract business and residents to invest in their regions. Would they be willing to part with some of their key economic and financial advantages simply for the sake of punishing US corporations like amazon with higher taxes?