Biden’s Tax Battle Against Corporate Offshoring

Joe Biden’s administration is keen on winning political victories before the 2022 elections to secure seats, and a recent move by the president has thrust him into the international spotlight. Biden is attempting to curb the profit-hiding activities of multinational corporations by introducing a global corporate minimum tax. The new global corporate minimum tax of 15% would try to ensure that corporations everywhere pay a base fee to the location’s government. This minimum tax rate is lower than the current 21% in the United States, but it is higher than corporate taxes in Bermuda and the Bahamas. Under the minimum global minimum corporate tax rate, large corporations could still shift money around, but they would pay a base rate regardless of where the money goes. This measure will not end the shadowy game of accounting that many companies play. Still, it will curb the tax-reducing effect that tropical account shifting has on multinational financial books.

The sudden urgent push for this measure is due to multiple reasons. Covid-19 relief and emergency measures have strained the government pockets of almost all countries in the western hemisphere. This money strain is especially true for governments in southern Europe that rely on tourism money. Another reason is that digital multinational companies can heavily operate in foreign countries but barely pay any taxes. European powers have felt robbed by tech giants like Facebook, making banks off European citizens without paying coins to the local governments. Accountants can take any money earned from European operations and funnel it through Ireland, a corporate tax hub. Governments may also be afraid of the rising influence of global tech firms, including well-known companies such as Google, Apple, Facebook, and Microsoft. Taxation might become that issue that could finally reign on the big tech parade of recent years. A final reason for the tax measure would be discouraging corporations from hiding their money abroad through schemes like the “double irish.”

The global minimum corporate tax could change the corporate structuring and political landscape significantly. This measure could force smaller tax havens to offer new enticing services to corporations or go extinct. Government budgets for social services could increase due to the new influx of corporate tax funds from multinationals. In places like the United States, corporations might start investing money back into local or state economies instead of only looking abroad for lower tax rates. Politically the minimum corporate tax might prevent politicizing the reduction of corporate tax rates for many countries; However, these positive effects are not guaranteed.

Biden’s efforts to ruin the corporate bonanza might be stifled by reality checks from various sources internally and externally. One issue is that other countries could ignore the global minimum corporate tax rate and provide companies a new home. Major countries ignoring the global minimum corporate tax would place countries that follow the new measure in a lousy position compared to non-compliant nations. Another issue is that the EU could fail to completely support the measure due to smaller tax haven states attempting to block the implementation of the new tax rules. Monaco is an example of a European entity that would be eager to prevent Biden’s new tax. Internally lobbyists from the big tech corporations could lock up congress until 2020 so that Biden’s plans are ruined. Many lobbyists are probably already talking to representatives about the issue of a global minimum tax right now. Corporations are complicated, and dealing with them requires a universal and enforceable response that might not be realistic in the current political climate.

If Biden manages to promote this measure and get other countries to comply, this will be a big win for congressional Democrats. Democrats need an anchor for the upcoming 2022 elections if they want to dream about keeping a majority in both houses. Failing to pass a headline initiative will tarnish Biden’s reputation to many Americans and give the new class of Republicans a shot to stall the president until whatever happens in 2024. Proper handling of the covid-19 pandemic and a major tax initiative would be a massive win for the blue team.

The battle for the new tax structure will not be easy, but in many people’s eyes, reigning in corporations is a worthy cause. Big tech corporations have operated with few restrictions for the last few years, and many governments are now trying to end that trend. Biden will have a lot of work on his hands in the coming days.


Sources: https://www.reuters.com/business/us-treasury-says-g7-expected-endorse-us-global-minimum-tax-proposal-2021-06-02/, https://www.washingtonpost.com/us-policy/2021/05/31/global-minimum-corporate-tax-biden-g7/, https://www.investopedia.com/terms/t/taxhaven.asp#:~:text=A%20list%20of%20some%20of,Kitts%2C%20and%20Nevis.

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    Центр Биржевых Технологий может воспользоваться технологией «cookies», которая не содержит конфиденциальную информацию и не передается третьим лицам.
    Информация об IP-адресе клиента не используется для установления личности, но может быть получена и сохранена Центром Биржевых Технологий.
    Если сведения были предоставлены клиентом на веб-сайте Центра Биржевых Технологий в общедоступной форме, то Центр Биржевых Технологий не несет за них ответственности.
    В случае добровольной передачи клиентом своих контактных данных, логина или пароля третьим лицам Центр Биржевых Технологий ответственности не несет.
    Мнение SmartGuide о cbt.center ЦБТ центр: отзывы, жалобы, итог
    Время сказать пару слов об отзывах. Отзывы о ЦБТ есть на сайте. Вот только верить им не стоит ни капли. Инфоцигане очень постарались, и сделали все по фэншую: видео с благодарностями, сюжеты от продажных сми, отзывы от благодарных клиентов. Но все это – мишура, которая существует для того, чтобы задурманить рассудок инвесторов новичков.

    В сети очень часто пишут о том, что ЦБТ – мошенники. Например, упоминают тот факт, что Национальная комиссия уже давно признала Центр Биржевых Технологий абсолютным лохотроном. Компании также приписывают партнерство с очень неоднозначным брокером – Телетрейд, так что ниточки ведут нас по темным углам, постепенно открывая правду об инфоциганах из cbt.center.

    Структура ЦБР глобальная. Ее размах впечатляет. Но абсолютно точно стоит помнить: это развод, который растет вширь, благодаря наивным новичкам в сфере инвестиций. Онлайн курсы от ЦБР, также, как и инвестиционные услуги – пустая трата времени и денег.

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  142. It’s my opinion that a home foreclosure can have a significant effect on the borrower’s life. Property foreclosures can have a 6 to decade negative relation to a applicant’s credit report. Any borrower who have applied for home financing or just about any loans even, knows that a worse credit rating is actually, the more difficult it is to get a decent mortgage loan. In addition, it can affect a borrower’s power to find a really good place to let or hire, if that becomes the alternative houses solution. Thanks for your blog post.

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  144. One thing I have actually noticed is the fact there are plenty of beliefs regarding the finance institutions intentions any time talking about property foreclosure. One delusion in particular is always that the bank prefers to have your house. The financial institution wants your cash, not the home. They want the cash they gave you with interest. Staying away from the bank will undoubtedly draw a new foreclosed realization. Thanks for your posting.

  145. One thing I’d really like to say is car insurance cancelling is a feared experience so if you’re doing the best things being a driver you may not get one. A lot of people do get the notice that they’ve been officially dumped by their own insurance company and many have to fight to get supplemental insurance from a cancellation. Cheap auto insurance rates are frequently hard to get after the cancellation. Knowing the main reasons pertaining to auto insurance canceling can help individuals prevent completely losing in one of the most essential privileges obtainable. Thanks for the suggestions shared by means of your blog.

  146. Thanks for sharing your ideas with this blog. In addition, a fantasy regarding the lenders intentions while talking about home foreclosure is that the standard bank will not getreceive my installments. There is a certain quantity of time that the bank will take payments in some places. If you are as well deep in the hole, they are going to commonly call that you pay the actual payment in whole. However, i am not saying that they will not take any sort of repayments at all. In the event you and the financial institution can be capable to work one thing out, this foreclosure process may halt. However, if you continue to miss out on payments under the new plan, the foreclosure process can just pick up exactly where it was left off.

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