It is always nice to look at a newspaper and encounter a piece of news that brings a smile to your face. Not many things one reads in the newspaper are capable of doing that, so when it happens it produces a very good feeling.

I mention this because recently an agreement was reached to block corporations from moving assets to avoid taxes. It is a deal that has been discussed for years and now has particular relevance because the revenues realized from this agreement will help President Biden pay for various programs that are important to him, such as his proposals for child care and climate change.

Jim Tankersley and Alan Rappeport, columnists for The Wall Street Journal, comment on this new agreement: “The agreement would impose maximum 15 percent corporate tax rate in nearly every country in the world and punish the few holdouts who refuse to go along. The Organization for Economic Cooperation and Development estimates the accord will raise $150 billion per year globally from tax fleeing companies.”

Another agreement just recently announced by the Biden administration is also very significant. It will cut U.S. tariffs on European steel and aluminum. This agreement will directly affect costs of basic goods brought into the United States, such as cars and washing machines. In addition and perhaps most importantly, it will put an end to tariffs imposed by the European Union in response to American tariffs imposed on a various European goods. Moreover, the agreement eliminates new E.U. tariffs on American goods, which were scheduled to go into effect on Dec. 1.

It is not often that countries act to modify trade barriers. When they do, it has positive economic and political effects; costs are lowered, production efficiencies are strengthened and political relationships inevitably made stronger. Should this agreement eventually become law in the almost 140 countries that are signatories to it, there is a good chance that these new tax rules will create new revenues as a result of the elimination of many tax havens. Many hours were spent by individual nations seeking to find the best tax rates for themselves.

A very good example of this is the continual effort by U.S. Treasury Secretary Janice Yellin to convince the finance minister of Ireland that he should support this new tax agreement and raise Ireland’s 12.5 percent corporate tax rate. The finance minister finally agreed.

While this agreement is highly significant, it still must be acted upon by 2023, a reflection of the importance placed upon it by those who have signed on to the agreement. Yellin’s unbounded enthusiasm for this new tax agreement reflects how important it is to have. The major industrial countries working together to advance tax policies will inspire economic cooperation among the major industrialized nations. Global agreements that support this goal will allow the major producing countries of the world to cooperate rather than compete with each other. The result should be more economic cooperation, better political relationships, and policies that are mutually economically supportive.

Author and educator Dave Kaplan writes from his home in Santa Barbara, Calif.

(7) comments

noitall

Biden to cut tariff on European aluminum???? Aluminum is a high energy product and the raw material - bauxite- is generally found around the equater - not in Europe. So this comment sounds fishy at best. Anyone care to check the facts. Who in Europe has the cheap electric energy to produce aluminum? Answer is Alcoa. Headquartered in Pittsburgh Pa.

David Collins

So we have some type of agreement do we ? Well agreements often scatter in the wind , like leaves in the fall season . Case in point is the climate summit . Lots of agreements but zero action . Could be because few really think that climate change will amount to anything or if so will take a few thousand years to come to pass . Probably a few million years .

Another article with no real substance , just useless dithering fluff . The minister probably just wanted to get rid of her aggravating mouth , besides , they have till 2023 to think about it . More than ample time for the corporations to modify and adapt .

So sit back and smile . No way can bungles biden and crew mess this one up . Is there ?

mpjeep

Yellin is an idiot. I wish Kaplan and his commentary would stay in CA where they belong. Liberal garbage at its finest.

noitall

Kaplan is a Reagan - Santa Barbara holdover, and held over too long. Reaganomics got us in debt up to our ears. His commentary s are generally based on the trickle down theory that Laffer still espouses. Raise corporate taxes - NOW , and remove immunity from law suits from the Silicone Valley mob, This immunity is - at best - repugnant and violates our equal treatment Amendment. That is my commentary.

drewski

Well I don't pretend to be an economist, logic suggests if corporate taxes are equal the incentive to move from US is removed.

Trickle down economics is a sad joke, endlessly repeated by the gop.

Give the wealthy and corporations huge tax breaks and the majority of that money goes into stock buybacks.

Put money in the hands of the middle and lower classes and it goes into the economy via folks buying durable goods and consumables.

Have a look at quarterly profits from big corporations. Look at what Exxon Mobil et Al post this qtr. Then blame biden and offer more tax breaks to ExxonMobil.

Sheesh!

noitall

Bezoes pays zero income tax.

David Collins

Who do you think voted for those tax breaks and crazy rules . Hint , it was not the guy that picks up your trash twice a week .

You don’t think for a slippery second that these politicians in DC are going to vote for anything that negatively impacts their standard of living , do you . Sure , pretty much have to pay on their compressional salary but that is chump change for most of them . They are some of the same millionaires and perhaps billionaires we have been taught to hate and they fall all over themselves criticizing people that made it on their own . Been going on for many decades but have any loopholes been eliminated or changed ? Little to none that I know of . Something to do with PACs around election time , perhaps . Bungles biden is smack in the middle of all this along with Sanders and a long list of others . A few who are suddenly retiring or laying low , real low , till the dust settles a bit .

Taxation is hard to do fairly , due to the politics of it all . The progressive nature of the beast encourages ( creative taxation ) and we have plenty of that . This creativity has given birth to absolute armies of lawyers , accounting firms employing thousands and a host of tax advisors . All to save a dollar or three on April 15th . With the truly rich it is often not about any taxes paid but knowing that with help they can avoid paying any at all . Not about the money but a perverse sense of pride in being able to say (nope , not me . That tax thing is for the little guy .)

The whole tax code , income that is , needs a complete rewrite and could take up 4 or 5 pages , if you can keep the politicians out of it . Sadly , know of no mechanism in today’s world that would allow that to happen . Sooooooo , we are where we are . Aren’t we ?

Do not hold your breath on this one . Government telegraphs their moves years or so in advance , giving plenty of time to adapt . On purpose perhaps ?

By the way , a complete rewrite will NOT make everyone happy . Everyone should contribute and everyone means everyone .

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