The Biden administration has a bold proposal.
Or, if “bold” is too favourable for your taste, the Fraser Institute’s Daniel Mitchell opts for “troubling.”
The administration’s Global Minimum Taxation plan that would set a minimum tax rate to be adhered to across the G20 is troubling, he writes, in that it would establish a global tax cartel. As he outlines:
“Translated into plain English, this is an ‘OPEC for politicians.’ They all agree to keep tax rates high so businesses and entrepreneurs will no longer be able to shift jobs and investment to jurisdictions with better tax policy. And once a minimum tax is determined, there will be a big incentive to keep raising the rate. That will be good for governments and bad for taxpayers.”
Doing so would advance American interests, but would harm global competitiveness and growth in other countries who have prospered by drawing investment through lower corporate taxes.
“If the Biden administration uses the power of the U.S. government, it’s possible that jurisdictions that have prospered with pro-growth tax policy — places such as Ireland, Hong Kong, Bermuda and Switzerland — will feel compelled to surrender their fiscal sovereignty.”
