Chronic. Is the next world finally taking shape? In any case, the proposal made on April 5 by Janet Yellen, the US Secretary of the Treasury, opens up prospects capable of changing the face of globalization. “Together, we can use a global minimum tax to ensure that the economy thrives on a more level playing field in the taxation of multinational corporations,” she told the Chicago Council on Global Affairs. In technical and general aspects, it is a Copernican revolution.
The United States says it is ready to implement a mechanism requiring a multinational to pay a minimum of 21% tax on its profits, whatever its nationality, wherever it makes them. This floor rate, calculated country by country, would allow the main economies of the planet to recover substantial sums by establishing themselves as tax collectors of last resort.
The idea is to grant, within the framework of a multilateral agreement within the Organization for Economic Co-operation and Development (OECD), the right to tax a multinational on a given territory up to the difference between this minimum of 21% and the ridiculously low rates charged by tax havens. The latter would then lose most of their attractiveness.
Each country would keep its sovereign right to set the tax rate it wishes, but, if it is lower than the world minimum tax, others will take care of collecting the tax loss in its place. “This is a fundamental break, because it results in reversing the logic of international competition”, explains Gabriel Zucman, professor of economics at the University of California at Berkeley and co-author, with Emmanuel Saez, of a book, The Triumph of Injustice (Threshold, 2019), in which he called for such an aggiornamento.
To understand what is at work, we must go back to the origins of an ideology that imposed itself from the 1980s with Ronald Reagan in the United States. Tax competition has seen itself adorned with all the virtues by claiming to limit the inextinguishable propensity of States to overtax owners of capital.
Some theorists like political scientist Geoffrey Brennan and economist James Buchanan went so far as to make the shareholders victims subject to the “tyranny of the majority”. According to them, the only way to control this democratic drift – the people, by always demanding more taxes, being unable to govern themselves rationally – consisted in establishing a race to the lowest tax bid supposed to guarantee the economic efficiency demanded by the multinationals.
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