Yellen’s Seeks a Global Minimum Tax to Support Biden’s Massive Spending Plans

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by Mish Shedlock, The Street:

Treasury Secretary Janet Yellen has her eyes on your pocketbook and the pocketbook of corporations too.
Tax Some, Spend More

To support president Biden’s $2.3 trillion infrastructure proposal, Yellen Pushes for Global Minimum Tax Rate on Multinational Corporations.

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Treasury Secretary Janet Yellen argued for a global minimum corporate tax rate Monday, seeking international cooperation that is crucial to funding the administration’s $2.3 trillion infrastructure proposal.

President Biden’s proposal to raise the corporate tax rate to 28% from 21% would push the U.S. from the middle of the pack among major economies to near the top. The Biden plan would also impose a 21% minimum tax on U.S. companies’ foreign income, remove an export incentive and raise taxes on some foreign companies’ U.S. operations.

Under the Biden plan without a global minimum tax, a U.S. address becomes a potential disadvantage, meaning that foreign-owned businesses operating overseas could be significantly more profitable than competitors owned by U.S. companies.

Democrats’ changes would also decrease the benefits of having profits abroad as opposed to profits in the U.S., but they would make a U.S. corporate headquarters more of a liability.

Who Really Pays Corporate Taxes?

I side with economists who allege corporations don’t really pay taxes.

In response to corporate tax hikes, companies raise prices or reduce wages and benefits.

Ultimately, corporate tax hikes are a hidden tax on consumers. 

America First or America Alone?

Janet Yellen says ‘America first must never mean America alone.’

In regards to taxation, there is a large group of countries that benefit from low taxes. Hopefully, they will politely (or better yet impolitely) tell Yellen where to stuff it.

Meanwhile, I 100% endorse the notion of not going things alone.

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