According to a story in today’s Washington Post, the finance ministers of the G7 will endorse President Biden’s call for a global minimum tax on corporations when they meet this Friday in London. While Biden initially set the bar at a 21 percent minimum level, he’s since lowered it to 15 percent. That may be too low to stop U.S. corporations from gaming the system by funneling their profits abroad, particularly if their domestic tax rate is raised to the 28 percent that Biden has suggested, or even the 25 percent put forth by Joe Manchin. But just setting a global minimum would nonetheless be a huge achievement.

According to a 2018 study by UC Berkeley economist Gabriel Zucman and two University of Copenhagen colleagues, fully 40 percent of the profits that multinationals earn outside their home country are "artificially shifted to [such] tax havens" as Ireland, Luxembourg, the Cayman Islands, and Bermuda. The theory behind Biden and Treasury Secretary Janet Yellen’s proposal is that the rest of the world’s nations lose needed revenue through such tax-dodging, and by agreeing to a global minimum rate, their collective clout will bring the tax havens into line, too. To the best of my knowledge, no one has yet suggested what kinds of persuasion would suffice, but I’m all for economic sanctions, travel bans, and anything else short of war.

Agreement on global tax levels is important conceptually as well. Historically, governments have always been several steps behind corporations as those corporations have expanded their scope. In the U.S., the railroads were the first corporations to expand beyond a single state’s borders in the years following the Civil War, amassing levels of wealth and power that dwarfed those of state governments, which the railroads frequently purchased and controlled. It was not until the 1890s that movements arose that tried to corral corporate power on a level commensurate with the corporations—that is, on the national level. It was not until the 1930s, when the New Deal was created, that national government finally rose to that challenge, however partially and imperfectly.

It’s now nearly half a century since multinational and then global corporations arose, eroding the capacity of national governments to set or defend the social democratic accords on wages, taxes, and regulations that they’d enacted between the 1930s and the 1970s. In a tepid and half-hearted way, the European Union has created numerous cross-border regulations over the past few decades, but nothing remotely so ambitious as a minimum tax, much less a global one.

Capital is simply more mobile than labor or politics or legal regimes, the closing line of The Communist Manifesto notwithstanding. If American history is any guide, it takes many decades for government, with its standards and regulations, to catch up with capital’s expanding scope. Biden’s proposal signals that it may finally be time for the world’s governments to play catch-up—and not a moment too soon.

I’ll be on a break for the next couple of weeks, returning to my On TAPPING in mid-June.