If nothing else comes out of the G20 summit, at least the formal endorsement of a new worldwide minimum corporate tax of 15 percent by the G20 leaders is a good first step in curbing multinational corporations from seeking tax shelters abroad and avoiding taxes at home:
"The new global minimum tax of 15 percent aims to reverse the decades-long decline in tax rates on corporations across the world, a trend experts say has deprived governments of revenue to fund social spending programs. The deal is a key achievement for Treasury Secretary Janet Yellen, who made an international floor on corporate taxes among the top priorities of her tenure and pushed forcefully for swift action on a deal.
The plan was already endorsed by the finance ministers of each country, but its official approval by the heads of state puts added pressure on the difficult task of turning what remains an aspirational agreement into distinct legislation."
For years, the multinational corporations have been seeking favorable (to them) tax rates to relocate to the lowest bidder, pitting countries against each other, and limiting government revenues to address other economic and social problems.
In democracies, legislatures have a say in tax rates, so this is somewhat aspirational, especially for the U.S., where corporations wield power over legislators with corporate contributions. Hopefully this broad agreement will have some impact, but we'll wait and see.
