Global Tax
A quick post before the 4th of July celebration gets started in earnest.
So, it seems like Janet Yellen managed to get an agreement on a common global tax of 15% on multinational corporations. If Biden can get that through Congress, this might actually be huge because then companies will no longer be able to shop for the lowest tax treatment. Paul Krugman has a good analysis of what has historically has happened and what this new global agreement could mean here in his opinion piece “Yellen’s New Alliance Against Leprechauns”. He includes a good story about Apple and how the company earns its revenues.
As I understand it, this tax agreement will not provide any incentives to bring jobs to nations but then the lower taxes never induced companies to hire people. Instead of hiring people, companies just pocket the tax goodies. What this new agreement, if Congress passes it (and maybe other countries need to go through a similar approval process), will do is increase the government’s revenue which then could go toward R&D, education, infrastructure investment, or whatever the needs are.
The hope is to have corporations pay their fair share rather than citizens constantly footing the bill.
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