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Treasury Secretary Janet Yellen has proposed that governments around the world require payment of at least a uniform “global minimum corporate tax.” A motivation for Yellen’s push for a global minimum corporate tax is fear that the Biden administration’s proposed increase in the US corporate tax will cause some American corporations to flee the US for countries with lower corporate taxes.

President Biden wants to increase corporate taxes to help pay for his so-called infrastructure plan. The plan actually spends more on “progressive” priorities, including a down payment on the Green New Deal, than on infrastructure.

Much of the spending will benefit state-favored businesses. For example, the plan provides money to promote manufacturing and electric vehicles. So, the idea is to raise taxes on all corporations and then use some of the received tax payments to subsidize government-favored businesses and industries.

The only way to know the highest valued use of resources is by seeing what goods and services consumers voluntary choose to spend their money on. A system where the allocation of resources is based on the preferences of politicians and bureaucrats — who use force to get their way — will be less efficient than a system where consumers control the allocation of resources.

Thus, the greater role government plays in the economy the less prosperous the people will be — with the possible exception of the governing class and those who make their living currying favor with the rulers.

Yellen’s global corporate tax proposal will no doubt be supported by governments of many European Union (EU) countries, as well as the globalist bureaucrats at the Organization for Economic Cooperation and Development (OECD). For years, these governments and their power-hungry OECD allies have sought to create a global tax cartel.

The goal of those supporting global minimum taxes enforced by a global tax agency is to prevent countries from lowering their taxes. Lowering corporate and other taxes is one way countries are able to attract new businesses and grow their economies. For example, after Ireland lowered its corporate taxes, it moved from being one of the poorest countries in the EU to having one of the EU’s strongest economies. Also, American workers and investors benefited from the 2017 tax reform’s reduction of corporate taxes from 35 percent to 21 percent.

Yellen and her pro-global tax counterparts deride tax competition between countries as a “race to the bottom.” In fact, tax competition is a race to the top for the countries whose economies benefit from new investments, and for the workers and consumers who benefit from new job opportunities and new products. In contrast, a global minimum corporate tax will raise prices and lower wages, while incentivizing politicians to further increase the minimum.

A global minimum corporate tax will also set a precedent for imposition of other global minimum taxes on individuals. This scheme may even advance the old Keynesian dream of a global currency. The Biden administration is already taking steps toward a global currency by asking the International Monetary Fund to issue more special drawing rights (SDRs).

Global tax and fiat currency systems will only benefit the world’s political and financial elites. In contrast, regular people across the world benefit from limited government, free markets, sound money, and reduced or eliminated taxes.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Economics • Tags: Taxes 
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  1. I am generally sympathetic to the economic theory that Ron Paul proposes, but wouldn’t it make sense to make a wealth cap of, say, 500 million USD per person?

    Enough to let ambitious people get down to business, but not so much that too much material wealth accrues to too few individuals. That kind of thing doesn’t seem to work so well…

  2. @Thomas Faber

    …wouldn’t it make sense to make a wealth cap of, say, 500 million USD per person?

    There is logic to your position (or method to your madness), so far as the exceedingly wealthy are less impacted personally by higher marginal tax rates.

    BUT the idea is, IMO, ill-founded both because, by removing the incentive, it would serve to unjustifiably throttle the full potential of successful businesses, and it fails to target the crux of the actual problem here.

    Enough to let ambitious people get down to business, but not so much that too much material wealth accrues to too few individuals.

    The problem isn’t too much wealth in too few hands, the problem is in what those individuals are being permitted to do with that wealth.

    Individuals have no business using their wealth to leverage government policy and buy politicians. There also used to be anti-monopoly laws designed to ensure that a free and competitive market remained so.

    It’s paradoxical, even amusing, that the Chinese government which Cold War babies in the Western world have been indoctrinated to regard as evil incarnate because it’s Communist, have somehow managed to mostly rein in or sidestep the corruption endemic in their Western coroprate and government counterparts, to the extent that the living standards of the Common Chinese folk are advancing leaps and bounds.

    Taxes or wealth limits as a disincentive to accumulation of wealth misses the mark.

    It’s the rules governing what corporate entitities and wealthy individuals are allowed to get away with that needs scrutiny.

    That’s going to be a tough ask, seeing as how the rule-makers are now all bought and owned by the very coroporations and wealthy individuals that need to be called to account and reined in.

  3. @Ultrafart the Brave

    I ran out of [Thanks]’s and [Agree]’s so. Thanks and Agree!

  4. Jokem says:
    @Thomas Faber

    I think Dr Paul would agree that Yellen’s plan is another step in the direction of a Command Economy, which is what brought down the USSR. Red China has been able to compete with us because their version of a Command Economy is tempered with a modicum of Free Market principles and Good Sense. They do what is best for Red China.

    • Replies: @Thomas Faber
  5. Thomasina says:

    The Chinese elite do what’s in the best interest of the Chinese elite, and the U.S. elite do what’s in the best interest of the U.S. elite (the offshoring of manufacturing to China). Their central banks act in concert.

    Red China has been able to compete with us because they had a huge, readily available work force who worked for a fraction of the cost of U.S. workers, there were no environmental controls, and they were freely given (or stole) hard-fought U.S. technology and know-how. I mean, how could they fail? It’s been laid at their doorstep, all wrapped up with a pretty bow.

    Do you think for one second that China would have developed as it has without having access to the largest consumer base (the U.S.), courtesy of the traitorous U.S. multinational corporations? Not a chance.

    Have the Chinese worked hard? Yep, but if gold were just laid at my feet, I’d work hard at picking it up too.

  6. Thomasina says:

    There’s Yellen working hard at setting up another GLOBAL system. Global this, global that. Wiping out sovereignty. Collusion between world central banks, inability for countries to devalue, sanctions and embargos if you don’t go along, rigged elections, World Trade Organization, BIS, IMF, WHO, Davos…..

    One-world government, one currency. One giant leap backwards for mankind.

    • Agree: TTSSYF
  7. ruralguy says:

    Has wealth made America a better nation? In the 1940s to 1950s, that wealth built impressive schools, roads, housing, and a wealthy lifestyle. But, as long as a wealth differential exists, it keeps attracting poor and uneducated immigrants from around the world. We all live like Kings, with impressive entertainment systems, well engineered cars, and homes that make the old 1950 homes look like shacks, but this material wealth cannot mask the cultural and intellectual poverty of our 3rd world replacement population. Our social order is breaking down. The flood of unwelcome invaders is turning America into a black hole of Calcutta. We are imprisoned by them. The contempt these ungrateful invaders have for us is alarming, given past leftist terror pogroms in the failed states they left behind. Without the wealth, we would have continued the tranquil 1940-50 path, with a homogenous population that is too similar in wealth for anyone to be envious of having less.

  8. @Jokem

    I am not suggesting a “command” economy, whatever that means. I don’t really know much about economic theory 🙂

    I just think that it would make sense to put a cap somewhere (high). All things in nature have limits. I don’t see why economies should be exempt from this principle.

    Implementing it, however, is a whole other story – and economy is probably something that people will keep discussing as long as there are humans 🙂 . I was simply speaking from a perspective of principle.

    • Replies: @Jokem
  9. @Ultrafart the Brave

    Surely, a lot of people (most?) will feel the incentive all the way up to the 500 million?

    I should think so.

    I agree with you that it is a good thing to have laws that limit what money can be spent on.

    Money is like energy, isn’t it? Social energy? Then a society certainly has an interest in where that energy is routed, to lessen the risk that it energizes evil operations.

  10. @Thomasina

    how could they fail? It’s been laid at their doorstep, all wrapped up with a pretty bow.

    I believe the economic activity generated by the West’s foolish giveaways to China is second only to the post-WW2 boom in the US.

  11. Jokem says:
    @Thomas Faber

    A Command Economy is where all decisions about where recourses go is made by a central authority.
    A Free Market Economy is where decisions about where resources go is make by entities responding to the decisions of the consumer.

    A Wealth Cap will drive the most ambitious to other places. Imagine Bill Gate and his friends relocating Microsoft to, say, Japan. This kind of thing has already happened to electronics firms.

    Your plan is driven by Class Envy. People without the talent and/or ambition resent those who have worked to succeed.

    • Replies: @Thomas Faber
  12. Jokem says:
    @Thomasina

    You only need to go to Red China to see how the standard of living has skyrocketed to see the elite there better the conditions of the rank and file more so than we do in the USA.

    Your comments about environmental controls, etc. underscores my comments earlier. They do not cater to the demands of the globalists, they do not strangle their productivity with massive red tape and restrictions. It benefits the elite in Red China, sure, but not at the expense of what is best for their country.

  13. @Jokem

    Ah, if anyone is not satisfied with 500 million, let him leave the country, which would be better off without that greedy prick.

    • Replies: @Jokem
  14. Jokem says:
    @Thomas Faber

    …And with them goes their expertise as well as possibly their company. Think about my comment regarding Microsoft moving to Japan. The jobs go to Japan, and the the company earnings go to Japan, and the tax revenue goes there also.

  15. Incitatus says:

    “Global tax and fiat currency systems will only benefit the world’s political and financial elites.

    By “elite” do you mean self-proclaimed Expert-Deal-Artist, Insurrectionist/Loser, GOP-Head Donald J. Trump? Who leveraged inherited wealth into multiple bankruptcies, a fraudulent university, a scam foundation, a failed airline? An America-Firster who puts his name on products cheaply produced abroad and employs foreign workers (legal and illegal)? A tax deadbeat (ten of fifteen years paying no federal tax; paying $750 in 2016 and 2017)?

    Who, contrary to campaign promises, frequently played golf in office, mostly at his own courses (charges for lodging Secret Service paid to the Trump Organization). Cost over four years? $146,000,000. That averages $99,931.55 for each of 1461 days Trump was in office.

    Is that the “elite” you warn against, Senator Paul?

    Scots seem upset at recent generous incentives (including a $1,000,000 in COVID relief, a pandemic Trump deliberately minimized) paid Trump golf courses in Scotland. Contrary to promises made to obtain favorable treatment in construction, they haven’t turned a profit in the last five years. Revenue promised Scotland is lacking.

    Is Trump a ‘principled’ libertarian, Senator Paul? Or is he a deadbeat incompetent? Wait, wait. When it comes down to it, what’s the difference? Give us a hint.

    If all are successful in strip-tease tax-avoidance, a race-to-the-bottom, who pays for infrastructure, the military, health care (important in a pandemic), etc? Give us a hint Senator.

    “In contrast, regular people across the world benefit from limited government, free markets, sound money, and reduced or eliminated taxes.”

    Are you sure? Did “regular people” benefit from the “limited government” 1929 Crash? Did soup lines and Okies signal libertarian virtue?

    Fast forward to the present. Do ordinary taxpayers benefit from corporations like GE and Amazon that pay no tax? Trump doubled the number (30 to 60). Who pays for the infrastructure they use? Give us a hint.

    By all accounts it certainly isn’t Texas. It receives $13,513,000,000 more from the Federal Government that it pays in taxes. Texas is a welfare state! Go figure! Each Texan is sucking $471/year from the Federal tit. You could have done better – your son’s Kentuckians rake in $45,174,000,000 in welfare – $10,110 per capita! All the while espousing the same ‘free market’ nonsense.

    Won’t ask you to explain why your TX attorney general (alleging widespread voter fraud) only contested votes cast in other states won by Biden. If voter fraud was widespread, couldn’t it also be a factor in states that went for Deadbeat Donald? After all, the only previously known case was in NC by a Republican.

    Do you should feel safer with Permitless Carry (anyone and everyone can buy and pack heat, no questions asked, competence not required)?

    The problem with blindly mouthing sham ‘philosophy’ (usually bogis monetary doctrine) is it sometimes bites back.

    • Replies: @Jokem
  16. Jokem says:
    @Incitatus

    There is so much wrong here.

    I am not a Trump Supporter, and I think Ron Paul has criticized him on several occasions.
    I think Trump is a loudmouth blowhard. My problem is Joe Biden is leading us further down the path to a Soviet America.

    This editorial by the The Spokesman-Review gives a good approximation of my opinion
    https://www.spokesman.com/stories/2020/oct/25/editorial-trump-for-president-inslee-for-governor/

    Your complaints about Trumps finances only show he is a ruthless businessman. Show me a successful businessman who was charitable? Nice guys finish last.

    Who would not take advantage of tax breaks if offered?

    Suggesting Texas and Kentucky refuse federal money is like asking them if they consider themselves to be idiots. Who refuses free money?

    Expecting a Republican, Attorney General or otherwise, to contest votes in a state won by a Republican is absurd. When was the last time a Democrat used resources to overturn an election in a state won by a Democrat. The last time I heard of a Republican coming even close to doing this is James Buckley of New York, who was asked what he would do if he won, and he said ‘Demand a Recount’.

    As far as Permitless Carry, ask Vickie Weaver, ask Kenyon Ballew, ask David Koresh.
    I don’t think Felons or Crazy people out to have firearms, but I am all in favor of the ordinary citizen carrying as many as wanted. At least until the Police are required to protect you and have dire consequences if they fail.

    As far as Bogus Monetary Doctrine, look at where the USSR ended up, that is where we are headed.

    • Replies: @Incitatus
  17. Incitatus says:
    @Jokem

    “Ron Paul has criticized him [Trump] on several occasions’

    Did he criticize the Texas attorney general Ken Paxton’s bogus suit to overturn votes in other states (only those Trump failed to win)?

    Or is he forever dispensing libertarian kool-aid like:

    “regular people across the world benefit from limited government, free markets, sound money, and reduced or eliminated taxes.”

    Would those that experienced the Great Crash in 1929 agree? Losing everything from unregulated market melt-down, waiting in a soup-line, evicted from a farm?

    What about the recent ‘limited government’ Texas energy failure? People dying from exposure, overcharged tens of thousands? ‘Limited’ enough for you?

    Asinine platitudes are neither philosophy nor policy. They have the moral efficacy of a sad little fart.

    “Your complaints about Trumps finances only show he is a ruthless businessman. Show me a successful businessman who was charitable? Nice guys finish last.”

    Trump is an inherited wealth nitwit with multiple deferments, multiple bankruptcies, multiple wives, multiple sexual-assault lawsuits. His only profitable job ($400+ million) was pretending to be successful as a reality TV star. Doubtless he believes it. He sells his ‘brand’ complete with a bogus heraldic blazon stolen from Marjorie Merriweather Post’s husband.

    Such, obvious before 2016, is more obvious now. He is a debacle. His business loses money. Thus his zero-to-$750/year tax bill. ‘Great businessman’ don’t lose money year after year after year after year. Of course, it could be tax avoidance, an illicit sham. Very, very possible.

    “Expecting a Republican, Attorney General or otherwise, to contest votes in a state won by a Republican is absurd.”

    Attorney Generals are sworn to uphold the law in their states. Not in other states. It’s called jurisdiction.

    “Suggesting Texas and Kentucky refuse federal money is like asking them if they consider themselves to be idiots. Who refuses free money?”

    Texas and Kentucky pride themselves on self-reliance, freedom, independence, gun ownership (no licenses required) and most other GOP talking points. Including demonizing “liberal” states as “socialist”. All while sucking the Federal tit big time. Total frauds and hypocrites.

    Federal money isn’t “free”. Eight states pay more that they get back from the Feds. Six are Blue (NY, CT, NJ, MA, MN, CO). They pay $52,916,000,000 in excess. Two are Red (UT, NE) they pay $826,000,000 more than they get back (1.56% of what Blue States donate).

    Yet you worry Blue State “Joe Biden is leading us further down the path to a Soviet America”. Is part of your nightmare state-controlled redistribution of wealth? Donor blue states could well argue that already occurs, big-time.

    “I don’t think Felons or Crazy people out to have firearms, but I am all in favor of the ordinary citizen carrying as many as wanted”

    Do you favor people driving automobiles without training, licenses and insurance? The more the better?

    I live in a NRA bête noire state with strict laws. Death from firearms 3.4 per 100,000. Texas death rate is 374% higher (12.7/100,000). Kentucky’s death rate is 438% higher (14.9/100,000). Make you feel good?

    “As far as Bogus Monetary Doctrine, look at where the USSR ended up, that is where we are headed”

    Thanks for the Chicken Little ‘sky-is-falling’ warning.

    Indeed government borrowing is worrisome. Not for Trump, of course, with his $1.5 trillion corporate and 1-percenter tax break, $7 trillion record added to the debt in four years. Nor for the GW Bush’s two wartime tax breaks. What did Dr. Paul say about them?

    If concerned with the former USSR, you might want to pay more attention to where Putin is going with Navalny.

    Just a thought.

    • Replies: @Jokem
  18. Jokem says:
    @Incitatus

    ‘Did he criticize the Texas attorney general Ken Paxton’s bogus suit to overturn votes in other states (only those Trump failed to win)?’

    No, and it is right and proper he did not criticize the suit. Anyone can sue anyone for anything.
    You don’t have to be an Attorney General and you are not restricted to your own State.

    Re: Libertarian ‘Cool Aid’. The Constitution empowers the Federal Government to regulate interstate commerce. Do not confuse limited government with no government. And the Great Depression had more factors than just the stock market crash.

    ‘His business loses money.’
    So he is living in an appliance box under a bridge somewhere?

    ‘Attorney Generals are sworn to uphold the law in their states. Not in other states. It’s called jurisdiction.’

    So an Attorney General cannot sue someone in another state? I will need some serious convincing.

    ‘Federal money isn’t “free”.’
    It is to the people who get it. I am all in favor of putting the federal government on a diet.
    If federal money is offered to a state, they would be fools to refuse it.

    ‘Do you favor people driving automobiles without training, licenses and insurance? The more the better?’
    So, is there a secret Amendment to the US Constitution I am not aware of? The right to own and drive automobiles shall not be infringed?
    Don’t ask me about firearms, ask Vickie Weaver, David Koresh, Kenyon Ballew or Kenneth Trentadue.
    I don’t believe your statistics regarding firearm laws. Washington DC has the most restrictive firearms laws in the country and it is a cesspool of crime. The anti-gun crowd like to cook the books on statistics.

    ‘Thanks for the Chicken Little ‘sky-is-falling’ warning.’
    So we have heard from Joseph Stalin, I thought he died?

    As far as the National Debt, as I recall Congress has the final say on budget matters. I remember Ronald Reagan attempting to save money by closing obsolete military bases, and Remember G H W Bush trying to cut items out of the budget and Congress putting them back in. There was a lesson there for Future Presidents.

    I get the idea you are trying to paint me as a Trump loyalist. I am not.

  19. @Ultrafart the Brave

    I absolutely agree – the issue is what people are Llowed to do – rather than the money itself. Lobbying is just legalized bribery.

    • Replies: @Jokem
  20. Jokem says:
    @Showmethereal

    Interpret the Constitution the proper way. The Interstate Commerce Clause is being used to regulate all commerce, not just interstate commerce. State businesses which do not do business out of state ought to be immune to the ICC, and only answer to the regulations in the state they do business in.
    When they begin to sell products or services, or move capital out of state, that transaction then falls under ICC jurisdiction.

    Big Business is using this to support regulations they can more easily comply with them then small business, and thus strangle these small businesses with red tape and costs of compliance.

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