According to Fox News:
Gene Sperling, director of the White House's national economic council, said today at an official meeting that "we need a global minimum tax":
“We need a global minimum tax so that people have the assurance that nobody is escaping doing their fair share as part of a race to the bottom or having our tax code actually subsidized and facilitate people moving their funds to tax havens," Sperling said.
I wrote a mechanism to deliver such a tax about five years ago but the time did not seem right.
I'll drag it out and dust it down again soon.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
There will always be differences in tax rates and people will always choose the most favourable location. Even if there was a minimum people would still use the location that operated at the minimum level.
In many ways it is more important to consider how activities are treated for tax purposes. Without consistency of approach there is no point even talking about the specific rates. For example the current Vice-President of the USA is from a state that exempts the foreign income of an LLC from tax. I am sure we all remember the IBC’s with rates of tax of 35% but deductions that resulted in very little actual tax. I also seem to recall other places with higher tax rates that then offer grants instead. On the whole a simple minimum tax rate would be far too blunt a tool to achieve the desired result.
I look forward to reading about your mechanism.
Unitary tax can help overcome that, plus minimum rates
I assume you have in mind unitary tax for individuals as well as corporations. There are so many entities out there that can be disregarded for tax purposes.
I seriously doubt there will be the political will to have international cooperation on individual tax rates. You would need to start to interfere with the reliefs a country offers, the level of personal allowances and many other things to make it work. Even the EU hasn’t been bold enough to talk about going there yet.
Heard of AMT?
Tell me why not?
For goodness sake, it’s simple! You just aggregate income and gains from all sources and tax the sum at a specified rate, then deduct tax paid.
No it isn’t….
Sorry
If only it were
I have heard of AMT and I note that the Obama campaign has announced in the past few days that they want to make big changes to it impacts upon fewer people. Needless to say one of the big issues with US AMT is that it doesn’t catch every kind of income or gain. The issue with rolling anything like this out internationally is pretty obvious. The threshold level at which it would be acceptable in the developed world (eg USA where Obama wants it to apply to those earning over $X million) would be so high that it would remain attractive to those in the developing world. In other words yet another policy that will ensure wealth flows from the developing world to developed.
Belgraviadave has probably overlooked the fact that his very simplistic approach could apply capital gains tax to the sale of any principle private residence, which I am absolutely certain the average man in the street would oppose.
Who on earth could they be thinking of?
“We need a global minimum tax so that people have the assurance that nobody is escaping …… our tax code ……. and…… moving their funds to tax havens”