The new Fight for 15: A Global Minimum Tax?
Over 130 countries on October 8 agreed to a framework imposing a 15% minimum corporate tax rate. This is just the beginning.
Originally posted on my Power and Markets Substack, please feel free to share and subscribe to my newsletter to get these articles in your inbox!
“An unlimited power to tax involves, necessarily, a power to destroy”
- US Supreme Court Chief Justice John Marshall, McCulloch v. Maryland (1819)
The latest crusade by our D.C. overlords has been to establish a new international understanding over corporate taxation. The decentralized nature of 200-plus sovereign countries inevitably brings disorderly, uncoordinated tax policy. A byproduct of this has been effectively tax code competition, frustrating politicians in jurisdictions demanding higher tribute as the osmotic forces of markets shift capital elsewhere. Calls for a more uniform structure are in order.
Sadly, the bullies leading this charge are of the higher tax ilk. U.S. Treasury Secretary Janet Yellen is at the forefront of this cause. Euphemisms such as “tax harmonization” and “economic diplomacy” are the rhetorical lubrications of choice to get peers to sign on. Cartelizing tax policy is the goal to blocking all routes for capital to seek refuge. The sweet spot over 130 countries on October 8th agreed to is a 15% rate.
This is but the opening gambit. Once the premise of having fixed and systemic tax rates is established, lower tax jurisdictions must accommodate the needs of the rest. You cannot possibly expect tax authorities to slash their customary fees; be more reasonable by lifting yours and meeting them at a more tolerable level. I’m sure there are no financial strings attached to other agreements that can be pulled at a moment’s notice for unreasonable jurisdictions.
It’s truly a shame this push for transnational taxation policy is occurring with such ease. The appetites politicians possess for power and control is insatiable. The spending sprees by governments globally have only accelerated, amplifying the calls for universal corporate tax policies to serve as floors and not ceilings.
Fiscal profligacy must be reined in. The erosion of liberty is becoming more and more apparent the more eager politicians become. Runaway spending is means to which they usher in the confiscatory regime, and to that end, the destruction of freedom. The power to tax is the power to destroy.
