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Steve Keen: "Americans often think that imposing their rules on the rest of the world is the best thing that can happen to the rest of the world. Most of the time, the rest of the world disagrees. So I think she can try as much as she likes, but there's no way to enforce something like this."
On 5 April, U.S. Treasury Secretary Janet Yellen advocated a global minimum corporate tax rate to stop multinational corporations from seeking tax havens. President Joe Biden, meanwhile, plans to impose a 21 percent minimum tax on U.S. companies’ foreign income and raise the corporate tax rate to 28 percent to fund his bold infrastructure and climate plan.
Although the plan sounds like a good idea, it's unlikely that she'll succeed in getting a uniform law across the planet, according to Steve Keen, honorary professor of economics at University College of London.
The treasury secretary revealed that U.S. officials are working with G20 nations to agree to the global minimum corporate tax plan. The semiannual meetings of the International Monetary Fund (IMF) and World Bank where the U.S plays a leading role are scheduled for this week, which explains the timing of the announcement.
"There's good reason to impose uniform taxes around the world to stop companies doing tax evasion, which throws the burden of taxation on the working class and the middle class. So that's in its own right. That is to be applauded," says Steve Keen, an honorary economics professor at University College of London and author of "Debunking Economics."
US Treasury Secy #JanetYellen has argued for a global minimum corporate tax rate.
Wall Street Journal reported that Prez #JoeBiden's proposal to raise the corporate tax rate to 28% from 21% would push the #US from the middle of the pack among major economies to near the top. pic.twitter.com/VXoXeMJtmd
If implemented, the plan could help address the system in which the wealthy "basically evade tax and leave it to the lower classes to pay for the state," he suggests.
Obviously, the global minimum tax idea will be opposed by multinational corporations, according to the professor: "They'll be outraged, to begin with," he says. "But they've always been champions of creative accounting."
The NPR acknowledges that it's not clear whether the low-tax countries will embrace a global minimum tax given that Ireland, for example, "has derived a major competitive advantage with a lower tax regimen."
For its part, Axios suggests that Yellen's push for imposing a global minimum tax means that the administration sees "the risks to the American economy if it acts alone in raising corporate rates."
"Competitiveness is about more than how US-headquartered companies fare against other companies in global merger-and-acquisition bids," she argues. "It's about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises."
Still, Keen remains skeptical over the U.S. administration's ability to convince global governments to adjust their working tax systems to the U.S. needs.
The best Yellen can hope for is getting countries to reduce the number of tax havens or to penalize corporations that use them, the professor believes.
#FromTheSouth News Bit | The US Center for Diseases Control has authorized unrestricted domestic travel for vaccinated citizens without being tested for coronavirus or quarantined afterward. pic.twitter.com/uV0k8YmhBv