Far Left Globalist President Joe Biden and his Treasury Secretary Janet Yellen have agreed to what amounts to a treaty to raise taxes on American corporations to eliminate the competitive advantage our current tax system bestows upon domestic job creators.
Reuters reports a group of 136 countries on Friday set a minimum global tax rate of 15% for big companies and sought to make it harder for them to avoid taxation in a deal that Biden said, “leveled the playing field.”
The United States has had a 10.5% minimum tax since the end of 2017, so it is a matter of raising the rate to conform with the agreement said Biden administration officials.
Just so we’re clear – “leveled the playing field” in this context means raising taxes, which takes away an American advantage, so it is not Americans, but foreign competitors who benefit from the more “level playing field.”
Fox Business reports the deal is designed to target corporations that employ a litany of tactics to reduce their tax liability, often by shifting profits, and revenues, to low-tax countries, such as Bermuda, the Cayman Islands or Ireland, regardless of where the sale was made. The practice by American and foreign multinationals costs the U.S. tens of billions of dollars each year, according to the Treasury Department.
Once again, just so we’re clear – “costs the U.S. tens of billions of dollars each year” means returns tens of billions of dollars to investors, instead of giving it to the government to squander.
Treasury officials and tax experts have said that the global minimum tax would not require a treaty to implement and could be achieved in the reconciliation bill because it is a voluntary agreement among countries to individually impose a minimum tax on overseas earnings of corporations.
Treasury officials have said they regard the global minimum tax as less controversial than a higher overall corporate tax rate or a higher capital gains tax, because it puts the United States on a more competitive footing with other countries, but how raising taxes helps American companies compete remains unexplained.
Reuters reports Senate Republicans have argued that this deal would require a new international tax treaty that would require ratification with a two-thirds Senate majority.
Republican senators told Yellen in a letter they were concerned the Biden administration was considering circumventing the need to obtain the Senate's authority to implement treaties.
Under the Constitution, the Senate must ratify any treaty with a two-thirds majority, or 67 votes. Biden's fellow Democrats control only 50 seats in the 100-member chamber. As Reuters observed in its coverage, Republicans in recent years have been overwhelmingly hostile to treaties and have backed cuts in corporate taxes.
Yellen told a Senate Banking Committee hearing in late September that the administration was instead considering alternative means to modify existing bilateral tax treaties that would avoid a two-thirds majority vote, and it looks like Biden and Yellen intend to proceed without taking the de facto treaty to the Senate.
Countries are expected to make the agreement law by 2022 so that the tax can go into effect by 2023.
In the U.S., updating the tax law will require legislative approval by Congress – a feat that still faces an uphill trek to passage, noted Fox Business. The House and Senate will need to pass a bill raising the minimum tax on companies' overseas profits to 15% from the current rate of 10.5%. Democrats are planning to include the increase as part of their mega party-line tax-and-spending package that will be passed in the behemoth reconciliation bill, which will allow Democrats to bypass a Republican filibuster, but that strategy also puts the entire political load of raising taxes on vulnerable Democrats who are up for reelection in 2022 and 2024.
The toll-free Capitol Switchboard (1-866-220-0044), we urge conservatives to call their Senators and Representative – tell them you oppose raising taxes to make the U.S. less competitive and that this globalist tax agreement is a treaty that must be submitted to the Senate for ratification.
Corporate tax rates
Treasury Secretary Janet Yellen
Joe Biden agenda
Minimum Global Tax rate 15%
Low tax countries
International Tax Treaty