Under intense prodding from Washington a just-concluded confab of 136 nations agreed to new rules for taxing international companies.
This segment of What’s Ahead explains why this is a bad deal for the U.S. and should be scuttled by Congress.
The Administration hopes to sell a bill of goods to reluctant senators: Other countries are raising corporate taxes, and so should we. That’s not likely to work; if the Biden increase goes into effect, only Portugal and Colombia will have higher corporate tax rates than the U.S.
Its other argument is more nefarious. Long story short, the Administration now wants to change the way companies calculate their tax liabilities on international profits. Combined with the new global tax regime just negotiated, U.S. companies could be hit hard with higher taxes. The White House’s message to them: Go along with our proposed increase that’s now before Congress, and you’ll avoid this wallop.
Congress’ response should be no to the Biden hike and and no to this new global agreement.