The Democrats’ new proposals for taxing global corporations should enable them to address two distinct and pressing problems: how to expand the rule of law from the national level to the planetary; and how to win back a share of the working class that’s
been moving into the Republican column. For nearly half a century, America’s leading corporations have offshored both work (to lands where labor is cheap) and profits (to lands where tax rates are low). By so doing, they and their European counterparts have been able to end-run the worker rights and labor standards, and the taxes that fund them, that the nations of North America and Western Europe had been able, in their social democratic moments, to establish. In short, big business went global before government did. This was not an unprecedented development. In the second half of the 19th century, railroads, steel companies, and meatpacking firms went national at a time when the federal government had no laws to regulate them, when government was largely confined to state and local entities that couldn’t cope with nationwide businesses. It took decades—arguably, not until the 1930s—for the federal government to enact national rules of the road. We may now be at the moment when the governments of many nations agree on a common set of standards for the behemoths that dominate the global economy. At the European level, the EU has already enacted a light set of labor standards. Now, Treasury Secretary Janet Yellen is proposing that nations that belong to the OECD establish a global minimum tax for those corporations, so that they can’t direct their profits to such low-tax havens as Ireland, Luxembourg, or the Bahamas. Not accidentally, the Biden administration’s tax plans call for raising the corporate tax rate here to 28 percent, which is roughly the average tax rate of OECD
members.
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