Like two comrades in a (government-issued) pod, Joe Biden and Pope Francis have announced a meeting for Oct. 29 before attending a two-day summit of G20 leaders in Rome. The subject? A global tax. You read that correctly: a Global Minimum Tax — 15% to be exact.
This will happen on the second foreign trip of Biden’s handlers’ presidency. After the meeting, Biden will then attend the U.N. climate conference known as COP26 in Glasgow, Scotland, from Nov. 1-2 and announce “key actions” on the conference’s top themes, including goals for fighting climate change and forest and land use.
Nothing puts the mind at ease like a discussion on land use with global leaders right after a meeting with the Pope on a proposed “global tax.”
“They will discuss working together on efforts grounded in respect for fundamental human dignity, including ending the COVID-19 pandemic, tackling the climate crisis, and caring for the poor,” said spokesperson Jen Psaki, being sure to invoke the vaguest platitudes imaginable for the sake of leaving ample room for whatever communist goals can be achieved.
A Little Background
The proposed global tax didn’t come from thin air, of course. Last week, 135 countries agreed to a global tax deal that Joe Biden and Janet Yellen have been pushing from the time they entered office. The arrangement, as mentioned, would establish a global minimum corporate-tax rate of 15% and, more alarmingly, reduce the sovereignty of countries to make their own tax policy. That includes the sovereignty of the United States, which our own Congress should as a matter of principle shut down before it even gets started. If only principle were sufficient to motivate Congress.
The supposed logic behind the global minimum corporate tax deals with the “race to the bottom” in corporate taxes. The argument goes like this: One country cuts its corporate tax rate to lure businesses to its shores, then another country undercuts the first country, then another, and so on until the lowest tax rate is barely above 0%. Businesses chase these lower rates all around the world, and the countries that choose not to play along wind up with no revenue.
It’s an intriguing argument with one primary pitfall: reality. It simply hasn’t happened. What has been derided as a race to the bottom in reality has been more of a slow glide to the middle. Over the past 40 years, corporate tax rates have slowly declined across the board, and the worldwide average in the past ten years has settled right around 25%. The distribution has also become less variable over that span: The most common statutory rates globally are between 20 and 25%.
The United States used to be far above the global average. The federal statutory corporate-tax rate was 35% until the 2017 Tax Cuts and Jobs Act reduced it to 21%, where it currently stands. The domestic political agenda behind Biden and Yellen’s global antics is obvious. Democrats want to raise the federal corporate rate back above the global average again, to 26.5%. Since states also levy corporate taxes, the average corporate-tax rate for the U.S. would be 30.9%, which would be third-highest in the OECD, trailing only Colombia and Portugal. The Biden administration has made great play of the importance it attaches to competition when it is agitating for an aggressive antitrust policy, but that enthusiasm mysteriously wanes when it comes to taxation.
What neither Biden’s Handlers nor their supporters will tell you is that the global minimum tax would mean large, powerful countries could force smaller, weaker countries to adopt tax policies that facilitate the large countries’ extraction of revenue from corporations. 99 times out of 100 the Left would call this imperialism. But since higher taxes are part of the deal, well, it’s for the “common good.”
Then there is the most damning aspect of this global power grab: sovereignty. Setting tax policy is an inherent power of governments, and it should be left to them, not determined by some international agreement or body.
That especially goes for the United States, as it would be antithetical to our very founding. Our Constitution expressly puts the power of taxation in the hands of Congress. Not Joe Biden; not Biden’s handlers; not some foreign government who agrees with leftist tax philosophy; not the Treasury secretary, not the whims of the international community expressed in a multilateral agreement.
Our Constitution also puts the power to approve treaties in the hands of the Senate and subjects such approval to a two-thirds vote threshold. Since Barack Obama ignored this fact with his pushing of the Iran Deal, Joe Biden apparently feels emboldened to follow suit in circumventing that requirement. This agreement is a tax treaty and must be treated as such within the American constitutional system. Without the advice and consent of the Senate and a two-thirds vote of approval, it cannot be considered binding on American tax policy.
Obama ignored the Constitution because he faced a large and bipartisan majority of Senators who were opposed to his brand of ‘diplomacy’ with Iran. He couldn’t get it done the right way so he just ignored the rules altogether.
Will Joe Biden do the same? The smart money says yes. The question will be whether all the new conservatives in the judiciary will have something to say about it. Strong opposition by Republicans could help, too.
Educate your friends and family on this egregious and tyrannical global power grab. If you’re afraid of a “New World Order,” the ability to implement global tax rates should be fought vigorously.
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