Steve Forbes Celebrates Scuttling Of Global Tax Scheme

This episode of What’s Ahead cheerfully examines how taxpayers got a break last week when two bad international tax initiatives that have been pushed hard by the Biden Treasury Department got temporarily derailed.

Since taking office, Treasury boss Janet Yellen has been bulldozing two international minimum taxes. Revenue-greedy governments loved the idea of putting the kibosh on certain countries trying to lure companies through low taxes.

One was a general 15% minimum corporate tax. No country would be allowed to undercut this. Of course, the expectation is that 15% would rise and rise with the concurrence of ever-grasping politicians.

The other tax focused on high-tech companies. Traditionally, a business pays tax only to countries where they are physically based or have located intellectual property. Grasping governments complain that companies lodge such property in low-tax jurisdictions. Yellen’s scheme would close this escape hatch.

Fortunately, such ploys must be approved by individual countries, and in the U.S., Senator Joe Manchin (D–WV) just put the kibosh—at least for now—on approving the necessary legislation.

Hungary, whose corporate tax rate is 9%, is also saying no to approving the required rules. The EU can’t say yes without the unanimous approval of its 27 members.