, Columnist
The Push to Lift Corporate Taxes Will End Up Cutting Them
The risk of Biden’s proposal for a global minimum rate is that 15% becomes a de facto ceiling.
Probably not what he intended.
Photographer: Yuri Gripas/Abaca via Bloomberg
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Governments wanting to stop big businesses from shifting profits to low-tax jurisdictions have a carrot and a stick at their disposal.
The stick involves regulating practices such as corporate inversion, aggressive transfer pricing and license royalties so that tax avoidance is effectively outlawed. The carrot involves lowering your own tax rates so that the advantages of moving profits offshore disappear.