Op-Ed: A Global Corporate Minimum Tax Misses the Mark In Every Way

This piece was originally published in RealClear Markets on May 15, 2023.

The world is currently at a crossroads of economic uncertainty. Many businesses are finally getting out from underneath the impacts of COVID lockdowns and restrictions. Tensions between the world’s economic and military superpowers are higher than they have been in some time. The United States stands on the brink of a catastrophic debt default. Businesses – especially those that operate internationally – have a lot about which to be concerned. Companies should be focused on expanding their businesses rather than an added layer of taxation.

Unfortunately, American and global leaders are not pursuing avenues to alleviate this uncertainty or that would create a more business-friendly climate. Rather, they are advancing quite the opposite. A global corporate minimum tax adds to this uncertainty. It would also incentivize allied nations to harm their domestic economies and business communities. Level-headed lawmakers ought to recognize the harm caused by continuing to usher this policy forward.

The global minimum tax – more commonly known as “Pillar Two” – is fairly straightforward. The Organization for Economic Cooperation and Development (OECD) provides a template for nations to ensure no one has an effective corporate tax rate below 15 percent. This is meant to prevent businesses from basing operations in low-tax jurisdictions. Countries that sign on allow foreign nations to tax their businesses to ensure they are paying at least a 15 percent tax rate across multiple jurisdictions.

The full article can be found online here.