What in the World Is a Global Minimum Tax?

For years, large corporations have exploited international tax laws to pay less taxes. But last year, 137 countries backed a potential solution: a 15 percent corporate tax applied regardless of a company’s location. The reform could raise global tax revenues by more than $150 billion a year, but as advocates garner political support, there are significant roadblocks.

 

Play Button Pause Button
0:00 0:00
x
Host
  • Gabrielle Sierra
    Podcast Host and Producer
Episode Guests
  • Richard Rubin
    U.S. Tax Policy Reporter, Wall Street Journal
  • Shu-Yi Oei
    Professor, Boston College Law School

Show Notes

Multinational corporations worldwide are facing increasing frustration from critics who say they use a cocktail of loopholes such as profit shifting, deductions, and credits to avoid paying their fair share of taxes. As consensus grows, an unprecedented idea emerged: a global minimum tax floor of 15 percent that would apply to the world’s largest multinational corporations. The change could bring a massive increase in revenue for governments around the world. But this effort would require remarkable international cooperation, and the U.S. midterm elections and unfolding changes in Europe could prevent governments from unifying behind the idea.

 

From CFR 

 

Anshu Siripurapu, “Corporate Taxes in a Globalized World

 

Andrew Chatzky, “France’s Tech Tax: What to Know

 

Brad W. Setser, “The Irish Shock to U.S. Manufacturing?

 

From Guests

 

Richard Rubin, “Global Tax Deal Would Undercut U.S. Tax Breaks, Businesses Warn,Wall Street Journal

 

Richard Rubin, “Biden’s Budget Would Reshape His International Tax Plan to Match Global Deal,” Wall Street Journal

 

Shuyi Oei, “World Tax Policy in the World Tax Polity? An Event History Analysis of OECD/G20 BEPS Inclusive Framework Membership,” Yale Journal of International Law

 

Read More

 

Emma Agyemang and Sam Fleming, “Poland blocks EU move to sign up to minimum corporate tax,” Financial Times 

 

Liz Alderman, “Ireland’s Days as a Tax Haven May Be Ending, but Not Without a Fight,” New York Times

 

Alan Rappeport, “A Global Tax Deal Is at Hand. Here’s How It Would Work.,” New York Times

 

William Horobin and Bryce Baschuk, “Why ‘Digital Taxes’ Are the New Trade War Flashpoint,” Bloomberg 

 

Laura Davison, “Trump’s Tax Law Failed to Kill Off Corporate America’s Prized Dodge,” Bloomberg

 

Jeff Stein and Seung Min Kim, “Biden, other G-20 world leaders formally endorse groundbreaking global corporate minimum tax,” Washington Post

 

Rhett Buttle, “The Global Minimum Tax Agreement: Why It Matters For America’s Small Businesses,” Forbes

 

Shira Ovide, “How Big Tech Won the Pandemic,” New York Times

 

Key Elements of the U.S. Tax System,” Tax Policy Center

 

Watch and Listen

 

What is the global minimum corporate tax?,” CNBC International

Global Governance

In 2022, several colossal events dominated the headlines, most prominently the war in Ukraine and the worldwide inflation that it helped spark. But beyond Ukraine, events with global implications continued to unfold. In this episode, Why It Matters checks in with three CFR fellows and CFR President Richard Haass to understand the least-covered stories of 2022 and to take a peek at what could await the world in 2023.

Technology and Innovation

For years, the world thought of the internet as a borderless zone that brought people from around the world together. But as governments pursue very different regulatory paths, the monolithic internet is breaking apart. Now, where there had been one, there are at least three internets: one led by the United States, one by China, and one by the European Union.

International Organizations

The 2022 FIFA World Cup has kicked off in Qatar, and billions of fans worldwide are tuning in to the world’s most popular live event. And yet as in years past, the Qatar Cup is transpiring under the shadow of controversy.

Top Stories on CFR

China

China has so far been able to feed its 1.4 billion people, but climate change and a dependence on imports could pose challenges.

Ukraine

The main battle tanks that the United States and Germany have agreed to provide Ukraine will help its forces punch through Russian fortifications and retake lost territory.

Sub-Saharan Africa

PEPFAR’s twentieth anniversary should prompt reflection on some inconvenient truths for U.S.-Africa relations.